Litchfield Community Unit School District No. 12Local Government

8. Criteria or specific requirement (including statutory, regulatory, or other citation): Reporting '9. Condition: The District did not timely file expenditure reports for all federal awards within the Education Stabilization Fund. '10. Questioned Costs: No questioned costs. '11. Context: The District's grant expenditure reports are due to the Illinois State Board of Education by the 20th of the month following end of quarter or reporting period. The District did not timely file expenditure reports for ESSER II, ESSER III, and McKinney Vento Homeless. Final expenditure reports are due within 90 days of project end date if outstanding obligations were previously reported. The District did not timely file final expenditure reports for ESSER II-Jump Start Kindergarten & First Grade and GEER II - Jump Start Kindergarten. '12. Effect: Non-timely filed expenditure reports could result in the District not receiving the full allotment of funding requested or not receiving the funding timely. 13. Cause: This was an oversight by management personnel in the District due to additional expenditure reports being required that didn't coincide with the routine quarterly reporting. 14. Recommendation: The District should timely file all expenditure reports to stay compliant with federal awards. 15. Management's response: The District will take the necessary steps to ensure that expenditure reports are timely filed going forward.

8. Criteria or specific requirement (including statutory, regulatory, or other citation): Reporting '9. Condition: The District's general ledger expense account functions and objects do not agree to the account functions and objects that were reported to the Illinois State Board of Education on the quarterly expenditure reports and budgets approved by the Illinois State Board of Education. '10. Questioned Costs: No questioned costs. '11. Context: The District filed quarterly expenditure reports for ESSER III with the Illinois State Board of Education. Each expenditure report had discrepancies between the expense account functions and objects claimed on the expenditure report to the general ledger expense account functions and objects. All expenses incurred were in the proper period. '12. Effect: The District's general ledger accounts did not support the expenditure reports filed with the Illinois State Board of Education for fiscal year 2023. 13. Cause: This was an oversight by management personnel in the District. 14. Recommendation: The District should ensure that the expenditure reports filed with the Illinois State Board of Education are reconciled with the general ledger accounts of the District prior to submission. 15. Management's response: The District will take the necessary steps to reconcile the expenditure reports with the general ledger accounts before submitting to the Illinois State Board of Education.

8. Criteria or specific requirement (including statutory, regulatory, or other citation): Allowable Cost '9. Condition: The District submitted an expenditure to the Illinois State Board of Education in excess of the budget. '10. Questioned Costs: The questioned cost is $1,191. '11. Context: The District budgeted for ActivPanels at $30,000 in account #1000-700. However, the District purchased ActivPanels for $34,191 and submitted this expenditure on the September 30, 2022 expenditure report to the Illinois State Board of Education. A variance up to 10% overbudget or $1,000, whichever is greater, is allowed. Therefore, the allowed variance is $3,000 ($30,000*10%) leaving the questioned cost as $1,191. '12. Effect: The District over expended a line item in the budget in excess of the allowable variance. 13. Cause: This was an oversight by management personnel in the District when submitting expenditures to the Illinois State Board of Education. 14. Recommendation: The District should ensure that the expenditure reports filed with the Illinois State Board of Education are in accordance with the items included in the budget. 15. Management's response: The District will take the necessary steps to ensure the expenditures fall within the budget line items. If necessary, the District will amend the budget to avoid over expending a line item in the original budget.

'8. Criteria or specific requirement (including statutory, regulatory, or other citation): Equipment/Real Property Management '9. Condition: The District budgeted for and included items in capital outlay objects in both the general ledger and Illinois State Board of Education expenditure reports that were below the District's capitalization threshold of $5,000. '10. Questioned Costs: No questioned costs. '11. Context: Of the 7 Education Stabilization Fund grants that had expenditures in fiscal year 2022 , one of the grants included items below the capitalization threshold of $5,000 in capital outlay objects. '12. Effect: The District did not follow its capitalization threshold as outlined in its Fixed Asset Policy. 13. Cause: This was an oversight by the grant coordinator as they did not take into consideration the District's capitalization policy when compiling the budget. 14. Recommendation: The District should only include items greater than its $5,000 capitalization threshold in capital outlay objects in its general ledger, budgets, and expenditure reports filed with the Illinois State Board of Education. 15. Management's response: The District will follow the District's capitalization policy in future budgeting.

Allowable Activities. The Summer Food Program requires accurate meal counts in order to determine the proper amount of reimbursement for the District. During meal reimbursement testing, it was noted that in February the Elementary schools of Madison Park, Colt, and Russell recorded the same number of breakfasts served over multiple days. There were also several repeating days for the Middle School and High School noted. This issue was also noted at Russell during a site review done by ISBE. Questioned costs are undetermined. Madison Park recorded the same number of breakfasts served for 15 out of the 16 days reported, Colt and Russell recorded the same number of breakfasts served for all 16 days reported for the month of February 2021. It seems unlikely that the same number of kids at the different schools ate breakfast everyday so it would seem like the school was possibly getting reimbursed for incorrect breakfasts served. Meal counts were done manually during the use of the Summer Food Program which is more subject to error than when they use the point of sale system as they do with the National Lunch and Breakfast program. We recommend the District take steps to determine why the inaccurate reporting was occurring and then to develop controls to prevent this from happening again.

Reporting. The accounts used to budget grant expenditures should match the accounts used to record the expenditures on the general ledger. There was one inconsistency in the object used to budget for the ESSER 1 grant for the video production of the graduation ceremony during Covid versus where that expense was actually recorded in the general ledger. No questioned costs. Tied out all of the budgeted versus actual expenditures and noted 1 instance where the account used to budget for the expenditure didn't match the account used to record the expenditure on the general ledger. The expenditure was appropriately budgeted as a purchase service but was incorrectly reported on the general ledger as a supply. It appears that the budget was not reviewed when the expense was recorded in the general ledger. We recommend that special care is taken to review the general ledger as it relates to the grant budgets that are submitted to ISBE.

Special Tests: The Verification Handbook from ISBE requires districts to determine which of their free and reduced lunch applications are error prone. From those a determined number is selected to have the income reported verified by supporting documentation. During testing of the lunch applications, it was noted that 4 applications should have been marked as error prone and they were not. Out of the 40 applications tested, 4 were missed as being marked as error prone. The proper population wasn't identified for the verification. The employee who marked the application was new to his responsibilities and missed marking the applications as error prone. We recommend that further training be given to this employee so he knows what to look for in an error prone application. Administration will see that additional training is provided.

Special Tests. The Verification Handbook from ISBE requires that the confirmation review and verification tracking form must be filled out correctly during the verification process. During testing, of the sampled verified applications we notice that the above mentioned form did not have the verification results marked, didn't have the effective date of the status changed noted, nor was it signed by a verifying official. Out of the 2 applications that were required for verification, neither form had the 3 above items properly filled out. The information on the form was incomplete. From looking at the form, one could not tell if a change in status was necessary, one also couldn't tell if the change, if necessary, was made in the required time frame. Also, no one verified the results of the verification. The employee who did the verification process was new to this duty and its requirements. We recommend that further training be given to this employee on the verification process requirements. Administration will see that additional training is provided.

Eligibility: The Child Nutrition Cluster requires that every student receiving free or reduced benefits have either an application on file indicating free or reduced status, a homeless applications, or proof of their direct certification. During application testing, it was noted that a homeless application couldn't be found for one student and a direct certification verification couldn't be located for another. Questioned Costs: None as we can't determine if the free status for the 2 students mentioned above was correct or not. Out of the 40 applications reviewed, documentation couldn't be located for 2 to support free/reduced status. It was unable to be concluded if these 2 students were receiving the correct benefits. Due to handling of documentation by multiple employees, these items were assumed to have been misplaced. We recommend that procedures be put in place to ensure that each piece of documentation is obtained and securely archived. Administration will ensure that procedures are followed regarding obtaining and securing documentation for applications.

The Verification Handbook from ISBE requires districts to verify the income on 3% of error prone lunch applications for the Child Nutrition Program each year. If the verified income calculates to a different paid status this must be changed within 10 days. The calculated verified income done by the auditors indicated a paid status while the calculated verified income done by the District indicated a reduced status. No records were left on how the District number was calculated. Questioned costs: $884, based on 107 food service days for 2 students for both lunch and breakfast ($557 for lunch and $327 for breakfast). Calculated using the difference between the paid reimbursement rate vs the reduced reimbursement rate. Out of the 3 verified applications, one had a verified calculated income error. 2 students received reduced rate meals when they should have been in the paid status as well as the District was reimbursed for more than they should have been due to this incorrect status. The error was caused by miscalculating the annual income of the family. No records were kept of how the determining official came up with the verified amount, but it could not be recreated. We recommend that records be kept of how verified income is calculated and a secondary district employee verify these calculations for correctness.

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