EXCEPTIONAL CHILDREN HAVE OPPORTUNITIES

EXCEPTIONAL CHILDREN HAVE OPPORTUNITIES 07-016-1710-61 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2025 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER:14 2025 - 004 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Education Stabilization Fund 4. Project No.: 24-4998-CO, 25-4998-ES 5. AL No.: 84.425 6. Passed Through: Illinois State Board of Education 7. Federal Agency: U.S. Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Under the Uniform Guidance, costs charged to Federal awards must be necessary, reasonable, allocable, adequately documented, and consistently treated. Additionally, expenditures included in reimbursement requests must represent valid, allowable program costs that have been incurred and remain supported by the joint agreement's accounting records. Recipients are required to maintain effective internal controls over Federal awards in accordance with the Uniform Guidance. 9. Condition During testing of expenditures claimed under the Education Stabilization Fund program we identified $41,157 of expenditures that were included in a reimbursement request were not supported by allowable program expenditures. Subsequent to the reimbursement request and receipt of grant funds, the checks issued as payment to vendors were voided as the vendors did not provide goods or services. These expenditures were determined to be unsupported and resulted in questioned costs. 10. Questioned Costs We identified $41,157 of known questioned costs due to checks and underlying expenditures being charged to the program that were voided in a subsequent period. Projected questioned costs were not extrapolated as we were able to perform additional procedures to quantify the total value of expenditures claimed under the award that were aligned with checks that were voided due to vendors not providing goods or services. 11. Context We initially sampled 40 transactions charged to the award, of which one of these samples detected an unallowable cost claimed for the program as the $5,000 check issued to the vendor for expenditures claimed was for goods or services that were anticipated to be received. After several months ECHO personnel determined that the check should not be issued to the vendor and the check was voided. Based on this deviation in our sample we expanded our procedures to determine if additional expenditures claimed and subsequently voided and were able to identify an additional $36,157 of unallowable costs to the program. Our sample was not statistically valid. 12. Effect The joint agreement received Federal reimbursement for an expenditure that was not ultimately incurred and supported as an allowable program cost and resulted in $41,157 of questioned costs. 13. Cause Management did not maintain effective controls to ensure that costs claimed under the award were for allowable costs that were actually incurred. Specifically, there was no review process to ensure that expenditures included in reimbursement claims were for supported and allowable expenditures. 14. Recommendation We recommend that ECHO implement procedures to ensure checks are not created for payment to vendors in anticipation of goods or services being provided and that checks only be created once all appropriate supporting documentation has been received and approval for payment has been authorized by appropriate ECHO personnel. We also recommend that all requests for voiding checks be processed through appropriate reviews and documented approvals by someone outside of the check issuance process to ensure proper segregation of duties are present. These additional controls could aid in the prevention, detection and correction of potential errors in financial records or potential misappropriation of assets. 15. Management's response See corrective action plan

Corrective Action Plan Finding No.: 2025 - 004 Condition: During testing of expenditures claimed under the Education Stabilization Fund program we identified $41,157 of expenditures that were included in a reimbursement request were not supported by allowable program expenditures. Subsequent to the reimbursement request and receipt of grant funds, the checks issued as payment to vendors were voided as the vendors did not provide goods or services. These expenditures were determined to be unsupported and resulted in questioned costs. Plan: Administration will not create and hold checks for goods and services not yet rendered under a grant award, as this can lead to unsupported expenditures, should the goods or services not be provided or the checks are voided and not timely reported. The encumbrance process will be used appropriately, and payments will be made once the goods or services have been rendered. Anticipated Date of Completion: June 30, 2026 Name of Contact Person: Dr. Rena Whitten, Superintendent

GSA_MIGRATION

GSA_MIGRATION