School District of Brown DeerLocal Government

Federal Agency: U.S Department of Agriculture Federal Program Name: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Award Identification Number and Year: 252WI063N119-2024 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2025-400721-SB-546, 2025-400721-NSL-547, 2025-400721-SFSP-586 Award Period: July 1, 2024 through June 30, 2025 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matter Criteria or specific requirement: Uniform Guidance requires grant recipients implement and apply procurement policies that align with the requirements outlined in 2 CFR part 200.318-320, including the selection of vendors based on the identified informal and formal procurement methods, referred to as micro-purchases, small purchases, sealed bids, proposals and when noncompetitive procurement methods may be applied. The grant recipients are also required to design and implement an internal control structure to ensure compliance with procurement standards identified in 2 CFR Part 200.318-320 are complied with and necessary documentation retained. Condition: For three (3) of five (5) small purchase transactions selected for testing, the District did not retain complete documentation of the selection of vendors in compliance with Uniform Guidance and the District purchasing policy. All qualifying transactions were selected for testing. Questioned costs: None Context: For the three (3) of the small purchase transactions selected for testing, the District utilized services from vendors with established relationships with the District and did not retain documentation of their compliance with the required vendor selection criteria. Cause: The District internal controls were not designed and implemented to ensure that documentation of compliance with District Policy are retained. Effect: The District may not apply proper procurement requirements to transactions. Repeat finding: Not a repeat finding. Recommendation: We recommend District should design and implement control process to ensure grant transactions comply with District Policies and proper documentation is maintained. Views of responsible officials: There is no disagreement with the audit finding.

Reference Number: 2022-004 Description: Child Nutrition Cluster ? Reporting Department: United States Department of Agriculture Program Name: Child Nutrition Cluster Federal #: 10.553, 10.555, 10.559 Condition: We randomly selected three months? reimbursement claims to verify that what was reported to DPI for the number of meals claimed was accurate. The District did not have the support on file. It was obtained directly from the contracted food service provider. There were no procedures in place requiring that the District review the claims prior to filing and maintain supporting documentation. Criteria: Each month?s claim for reimbursement and all data used in the claims review process must be maintained on file. Accurate records must be maintained justifying all meals claimed and documenting that all Program funds were spent only on allowable Child Nutrition Program costs. Failure to maintain such records may be grounds for denial of reimbursement for meals served and/or administrative costs claimed during the period covered by the records in question. Records are required to be retained for a period of three years after submission of the final claim for reimbursement for the fiscal year. Effect: Because of the failure to obtain, review and maintain claim data, inaccurate claim data could be filed. Cause: The District?s staff does not have sufficient controls in place to ensure that all claims filed are reviewed and maintained. Auditors? Recommendation: We recommend that management implement procedures to ensure monthly review of claims filed and proper recordkeeping. Views of Responsible Officials: See attachment for District?s corrective action plan.

Reference Number: 2020-001 Description: Segregation of Duties Criteria: Statements on Auditing Standards AU ?325.29 states it is a deficiency in the design of controls to have absent or inadequate segregation of duties within a significant account or process. Condition: Proper segregation of duties prescribes that the authorization, recording, and custody functions be separated. Many of the accounting functions are performed by a few individuals, including: ? Recording vendor invoices in the accounting system ? Preparing and mailing checks ? Bank reconciliations ? Processing payroll Cause: Limitations in staff size. Effect: The lack of segregation of duties could result in the possibility of undetected errors or irregularities. Repeat Finding: This is a repeat finding see 2019-001. Recommendation: It is important for management to be aware of this condition and to realize that the concentration of duties and responsibilities in one or two individuals is not desirable from a control standpoint. Under these conditions, the most effective controls rest in management?s knowledge and monitoring of matters relating to the District?s financial affairs. Views of Responsible Officials: See attachment for District?s corrective action plan.

Reference Number: 2020-002 Description: Financial Statement Preparation Criteria: Statements on Auditing Standards AU ?325.29 states it is a deficiency in the design of controls to have inadequate controls over the preparation of the financial statements being audited. Condition: The financial statements of the District should be prepared in accordance with accounting principles generally accepted in the United States of America (?GAAP?). Preparation of the District?s financial statements and footnote disclosures in accordance with GAAP requires a very high level of technical experience and expertise. Cause: The District?s staff does not have the necessary resources to properly apply GAAP in the preparation of these documents. The District has decided to rely on the technical experience and expertise of its auditors and have requested us to prepare the financial statements and footnote disclosures in accordance with GAAP. Effect: The District?s financial statements could be misstated and required footnote disclosures could be missing. Auditors? Recommendation: We recommend the District continue to assign a staff member to review the financial statements prepared by its auditors. Repeat Finding: This is a repeat finding see 2019-002. Views of Responsible Officials and Corrective Action Plan: See attachment for District?s corrective action plan.

Reference Number: 2020-003 Description: Adjusting Journal Entries Condition and Criteria: Audit adjustments were required to prevent the District?s financial statements from being misstated. Effect: If the condition went uncorrected, the District?s financial statements would be misstated. Cause: Inadequate controls in place to ensure the proper recording of all of the District?s financial transactions in accordance with accounting principles generally accepted in the United States of America. Auditors? Recommendation: We recommend that management review the nature of these entries in order to determine if these types of adjustments could be made during the year as part of the ordinary financial reporting process. This would reduce the likelihood of this comment in the future and also increase the accuracy of interim financial statements. Repeat Finding: This is a repeat finding see 2019-003. View of Responsible Officials and Corrective Action Plan: See attachment for District?s corrective action plan. C. Federal and State Award Findings and Questioned Costs

Reference Number: 2019-001 Description: Segregation of Duties Criteria: Statements on Auditing Standards AU ?325.29 states it is a deficiency in the design of controls to have absent or inadequate segregation of duties within a significant account or process. Condition: Proper segregation of duties prescribes that the authorization, recording, and custody functions be separated. Many of the accounting functions are performed by a few individuals, including: ? Recording vendor invoices in the accounting system ? Preparing and mailing checks ? Bank reconciliations ? Processing payroll Cause: Limitations in staff size. Effect: The lack of segregation of duties could result in the possibility of undetected errors or irregularities. Repeat Finding: This is a repeat finding see 2018-001. Recommendation: It is important for management to be aware of this condition and to realize that the concentration of duties and responsibilities in one or two individuals is not desirable from a control standpoint. Under these conditions, the most effective controls rest in management?s knowledge and monitoring of matters relating to the District?s financial affairs. Views of Responsible Officials: See attachment for District?s corrective action plan.

Reference Number: 2019-003 Description: Adjusting Journal Entries Condition and Criteria: Audit adjustments were required to prevent the District?s financial statements from being misstated. Effect: If the condition went uncorrected, the District?s financial statements would be misstated. Cause: Inadequate controls in place to ensure the proper recording of all of the District?s financial transactions in accordance with accounting principles generally accepted in the United States of America. Auditors? Recommendation: We recommend that management review the nature of these entries in order to determine if these types of adjustments could be made during the year as part of the ordinary financial reporting process. This would reduce the likelihood of this comment in the future and also increase the accuracy of interim financial statements. Repeat Finding: This was not a finding in the prior year. View of Responsible Officials and Corrective Action Plan: See attachment for District?s corrective action plan.

Reference Number: 2019-004 Description: Child Nutrition Cluster ? Eligibility Department: United States Department of Agriculture Program Name: Child Nutrition Cluster Federal #: 10.553, 10.555, 10.559 Criteria: The Richard B. Russell National School Lunch Act requires families requesting free or reduced lunch fill out an application and submit this to their school district. Applications are then reviewed and approved by the District to determine eligibility for the National School Lunch Program. Condition: We randomly selected a sample of 16 applications for students receiving free or reduced lunch. In our sample, there were six applications that the District was unable to provide documentation for. Cause: The District?s staff does not have sufficient controls in place to ensure all applications are reviewed and retained. Effect: The District?s is not in compliance with the requirements of the Child Nutrition Cluster. Auditors? Recommendation: We recommend stronger internal controls related to the application process be implemented. The District should ensure all applications are reviewed by a designated employee and that they are filed in an easily accessible manner. Views of Responsible Officials and Corrective Action Plan: See attachment for District?s corrective action plan.

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