MADISON COMMUNITY UNIT SCHOOL DISTRICT NO. 12

Criteria: Reporting. All quarterly expenditure reports must be filed with the Illinois State Board of Education no later than 20 days after the end of the quarter. Condition: We noted that 2 of the 5 required quarterly expenditure reports submitted for FY25 were not filed in a timely manner. Questioned Costs: There are no questioned costs. Context: ARP Homeless (2024) 9/30/24 report was 52 days late. Elevating Educators (2025) 9/30/24 report was 55 days late. Effect: Reporting requirements were not met. This was an oversight by management personnel in the District due to turnover in the District Office. Cause: The District did not employ proper oversight to ensure that the quarterly expenditure reports were filed timely. Recommendation: We recommend that steps are taken, including oversight by a second employee, to ensure that all quarterly expenditure reports are filed by the due dates. Management's Response: The District will take the necessary steps to file all quarterly expenditure reports on time in the future.

Criteria: Equipment property records must be maintained for equipment purchased with federal funds. A federal inventory log must include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Condition: Equipment records were not maintained for all items purchased with federal funds. Questioned Costs: There are no questioned costs. Context: The District claimed several capital outlay purchases in the grant this year that are included within the fixed asset listing, but are not captured in a federal inventory log. This includes equipment for the Weight Room, Chiller Replacement, Gym Floor, Stage Floor, Ice Maker, and Scoreboard Replacement. Effect: The District did not comply with the equipment compliance requirement regarding the proper recordkeeping for equipment purchased with federal funds. Cause: The District does not maintain a capital asset listing made with federal funds that contains all pertinent purchase criteria. Recommendation: We recommend that the District attempts to put together an inventory log for equipment purchased with federal funds for the current year and continues to maintain the log going forward. Management's Response: Management agrees to take the necessary steps to ensure compliance requirements are met and will discuss implementing an inventory record-keeping process.

Criteria: Reporting. The accounts used to record expenditures on the quarterly expenditure reports should match the general ledger accounts where the expenditures are recorded. Condition: It was noted that there was an inconsistency when comparing the general ledger to what was reported on the expenditure reports. Questioned Costs: There are no questioned costs. Context: The accounts used to record expenditures on the quarterly expenditure reports did not match the general ledeger accounts. In total, approximately $141,593 of costs were posted to an account in the general ledger that did not match the final ISBE classification of expenditure reported for the year. No expenses were duplicated across another grant, and all expenses were allowable in the grant. Effect: The expenditures were not recorded/reported consistently between the District's financial records and the reports to ISBE. This makes the monitoring of budget to actual expense by grant line item difficult. Cause: Expenses claimed in the grant were incorrectly coded on the general ledger. Recommendation: We recommend that steps are taken, including oversight by a second employee, to reconcile the general ledger to the expenditure reports in detail before submission. We also recommend implementing a detailed reconciliation spreadsheet that lists claimed expenses by account. Management's Response: The District will add a verification process to reconcile the general ledger to the budget and expenditure reports before submitting.

Criteria: Reporting. The accounts used to record expenditures on the quarterly expenditure reports should match the general ledger accounts where the expenditures are recorded. Condition: It was noted that there was an inconsistency when comparing the general ledger to what was reported on the expenditure reports. Questioned Costs: There are no questioned costs. Context: The accounts used to record expenditures on the quarterly expenditure reports did not match the general ledeger accounts where the expenditures are recorded. In total, approximately $222,759 of costs across Title I: School Improvement and Accountability (2025), Title I (2025), and Title I (2024) were posted to a location in the general ledger that did not match the final ISBE expenditure report for the year. No expenses were duplicated across another grant, and all expenses were allowable in the grant. Effect: The expenditures were not recorded/reported consistently between the District's financial records and the reports to ISBE. This makes the monitoring of budget to actual expense by grant line item difficult. Cause: Expenses claimed in the grant were incorrectly coded on the general ledger. Recommendation: We recommend that steps are taken, including oversight by a second employee, to reconcile the general ledger to the expenditure reports in detail before submission. We also recommend implementing a detailed reconciliation spreadsheet that lists claimed expenses by account. Management's Response: The District will add a verification process to reconcile the general ledger to the budget and expenditure reports before submitting.

Criteria: Reporting. To determine that an accurate 6/30/24 expenditure report was filed with the Illinois State Board of Education. The District reported expenses on the 6/30/24 report including costs that were paid after year-end. Condition: The District claimed expenses early on the 6/30/24 expenditure report that should have been reported as outstanding obligations. Questioned Costs: There are no questioned costs. Context: Per review of expenditures and client tracking sheets, $163,889 in 1000-400, $91,440 in 1000-500, and $4,770 in 2540-500 were expensed on the GL at 6/1/24, but the checks were disbursed in July 2024. These transactions were included on the ISBE 6/30/24 report, likely due to the difference in expense date and check date. Therefore, the sum of these expenditures, $260,099 should have been reported as outstanding obligations at 6/30/24 since the cash paid for it was actually disbursed in FY24. The expenses were allowable under the grant, but the District claimed the expenses too early. Effect: The District claimed expenses early and were reimbursed for expenses in the 6/30/24 report that were not paid until July 2024. Cause: The District uses two different dates in SDS: An expense date and a check date. The expense date is the date the expense is posted into SDS, and the check date is the date the cash is paid. The District mistakenly used the expense date on the general ledger instead of the check date to create expenditure reports. Recommendation: We recommend adding a verification process to reconcile the general ledger totals using the check dates to the ISBE expenditure reports before submitting. Management's response: The District will add a verification process to reconcile the general ledger totals using the check dates to the expenditure reports before submitting.

Criteria: Reporting. All quarterly expenditure reports must be filed with the Illinois State Board of Education no later than 20 days after the end of the quarter. Condition: We noted that 6 of the 11 quarterly expenditure reports submitted for FY24 were not filed in a timely manner. Questioned Costs: There are no questioned costs. Context: ARP Homeless (2024) Q4 report was 23 days late. Elevating Educator's Q1 and Q2 reports were 89 and 25 days late, respectively. ESSER II's Q1 report was 28 days late. Early Childhood: Jumpstart Kindergarten and First Grade's Q1 report was 40 days late. Early Childhood: Jumpstart Kindergarten's Q1 report was 40 days late. Of 11 reports submitted in FY, 6 were filed late. All reports were filed between 23 and 89 days late. Effect: Reporting requirements were not met. This was an oversight by management personnel in the District due to turnover in the District Office. Cause: The District did not employ proper oversight to ensure that the quarterly expenditure reports were filed timely. Recommendation: We recommend that steps are taken, including oversight by a second employee, to ensure that all quarterly expenditure reports are filed by the due dates. Management Response: The District will take the necessary steps to file all quarterly expenditure reports on time in the future.

Criteria: Equipment property records must be maintained for equipment purchased with federal funds. Condition: Equipment records were not maintained for items purchased with federal funds. Questioned Costs: There are no questioned costs. Context: There were multiple items claimed as capital outlay items and added to the fixed asset listing in the year they were purchased, but there were no federal inventory log and property records maintained for them. Effect: The District did not comply with the equipment compliance requirement regarding the keeping of property records for equipment purchased with federal funds. Cause: The District was not aware of the compliance requirement. Recommendation: We will provide the ISBE equipment log guidelines and recommend that the District begins the process of maintaining a log going forward for all equipment purchased with federal funding. We also recommend the District obtains a grant equipment spending policy. Management's Response: Management agrees to take the necessary steps to ensure compliance requirements are met and will discuss implementing an inventory record-keeping process.

Criteria: Reporting. The accounts used to record expenditures on the quarterly expenditure reports should match the general ledger accounts where the expenditures are recorded. Condition: It was noted that there was an inconsistency when comparing the general ledger to what was reported on the expenditure reports. Questioned Costs: There are no questioned costs. Context: The accounts used to record expenditures on the quarterly expenditure reports should match the general ledger accounts where the expenditures are recorded. $78,796 of ESSER II purchased services (2540-300) were recorded in a capital outlay account. $42,050 of ESSER III purchased services (2540-300) were recorded in non-grant supplies accounts. $84,475 of ESSER III supplies (2540-400) were recorded in non-grant purchased services accounts. $108,769 of ESSER III items reported as 2540-500 items should be reported as purchased services. Effect: The expenditures were not recorded/reported consistently between the financial records and the ISBE expenditure reports. Cause: A journal entry was meant to be made to move items into the correct accounts, but it was not made. A coding error was made when entering the expenditures into the general ledger. Recommendation: We recommend that steps are taken, including oversight by a second employee, to reconcile the general ledger to the expenditure reports, and the expenditure reports against the budget items before submitting. Management's Response: The District will add a verification process to reconcile the general ledger to the budget and expenditure reports before submitting.

Reporting. All quarterly expenditure reports must be filed with the Illinois State Board of Education no later than 20 days after the end of the quarter. We noted that 6 of the quarterly expenditure reports were not filed in a timely manner. There were expenses with dates on them that should have been reported in earlier quarter reports. There are no questioned costs. Out of the 13 quarterly reports submitted by the District for FY23, 6 were filed after the due date of the 20th of the month - 2 quarter reports in ESSER III, 1 report in ESSER II, 1 report in ARP Homeless, and 2 reports in Elevating Education. The first expenditure report for ESSER II was not until 3/31, but the dates associated with some expenditures occured before this quarter, and could have been submitted for reimbursement in an earlier quarter. SB will include as a repeat compliance finding. The District did not employ proper oversight to ensure that the quarterly expenditure reports were filed timely. Reporting requirements were not met. This was an oversight by management personnel in the District due to turnover in the District Office.

Criteria: Reporting. All quarterly expenditure reports must be filed with the Illinois State Board of Education no later than 20 days after the end of the quarter. Condition: We noted that 12 of the quarterly expenditure reports were not filed in a timely manner. Questioned Costs: None. Context: 12 OF 24 quarterly expenditure reports for both programs were submitted between 5 and 85 days after the 20-day deadline. This was an oversight by management personnel in the District due to turnover in the District Office. Cause: The District did not employ proper oversight to ensure that the quarterly expenditure reports were filed timely. Recommendation: We recommend that steps are taken, including oversight by a second employee, to ensure that all quarterly expenditure reports are filed by the due dates. Management's Response: The District will take the necessary steps to file all quarterly expenditure reports on time in the future.

Criteria: Equipment, property records must be maintained for equipment purchased with federal funds. Condition: Equipment records were not maintained for items purchased with federal funds. Questioned Costs: None Context: There were 19 fixed asset purchases for a total of $630,355 with these grant funds during the year and no equipment records were maintained. Effect: The District did not comply with the equipment compliance requirement. Cause: The District did not have policies in place to ensure that all compliance requirements were known by employees responsible for the grant funds. Recommendation: We recommend that the compliance supplement is obtained and read for all new grants to ensure that employees are knowledgable about compliance requirements.

Criteria: Reporting. All quarterly expenditure reports must be filed with the Illinois State Board of Education no later than 20 days after the end of the quarter. Condition: We noted that 3 of the quarterly expenditure reports were not filed in a timely manner. Questioned Costs: None. Context: Q1, Q2, and Q4 quarterly expenditure reports for both programs were submitted between 13 and 119 days after the 20-day deadline. This was an oversight by management personnel in the District due to turnover in the District Office. Cause: The District did not employ proper oversight to ensure that the quarterly expenditure reports were filed timely. Recommendation: We recommend that steps are taken, including oversight by a second employee, to ensure that all quarterly expenditure reports are filed by the due dates. Management's Response: The District will take the necessary steps to file all quarterly expenditure reports on time in the future.

Criteria: Allowable Costs/Cost Principles Condition: The District was audited by the Illinois State Board of Education (ISBE) for the 2017 Title I - Low Income grant. ISBE found questioned costs of $62,786 that the District repaid during FY 2021. The District then claimed this expense on the 2021 Title I - School Improvement grant, which is an unallowable costs. Questioned Costs: $62,786. Context: The Title I - School Improvement grant had total expenditures of $195,545, of which $62,786 are for unallowable costs. Effect: A reimbursement request was submitted for an unallowable cost in the grant. Cause: The reimbursement was requested based on a summary expenditure report, rather than a detailed expenditure report. Recommendation: We recommend that the District review all expenditures before submitting a request for reimbursement to ISBE. Management's Response: Management personnel are aware of the discrepancy and will work to ensure that all expenditures requested for reimbursement are for allowable costs in the future.

Criteria: All quarterly expenditure reports should be filed 20 days after the end of the quarter. Condition: We noted that none of the quarterly expenditure reports were filed timely. Questioned costs: No questioned costs. Context: All quarterly expenditure reports were submitted after the 20 day deadline. Effect: As a result of employee turnover in the business office, the District did not timely file all of their federal expenditure reports for Title I - Low Income and Title I - School Improvement and Accountability. Cause: The District was behind on filing quarterly reports. Recommendation: We recommend that care is taken to ensure that all quarterly expenditure reports are filed by the due date. Management's Response: The District will take the necessary steps to file all quarterly expenditure reports on time in the future.

Criteria: All quarterly expenditure reports should be filed 20 days after the end of the quarter. Condition: We noted that none of the quarterly expenditure reports were filed timely. Questioned Costs: No questioned costs. Context: All quarterly expenditure reports were submitted after the 20 day deadline. Effect: As a result of employee turnover in the business office, the District did not timely file all of their federal expenditure reports for Title II - Teacher Quality. Cause: The District was behind on filing quarterly reports. Recommendation: We recommend that care is taken to ensure that all quarterly expenditure reports are filed by the due dates. Management's Response: The District will take the necessary steps to file all quarterly expenditure reports on time in the future.

REFER TO THE ATTACHED SCHEDULE OF FINDINGS AND QUESTIONED COSTS.

REFER TO THE ATTACHED SCHEDULE OF FINDINGS AND QUESTIONED COSTS

REFER TO THE ATTACHED SCHEDULE OF FINDINGS AND QUESTIONED COSTS

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION