BELLEVILLE SCHOOL DISTRICT

2025-001: Segregation of Duties Condition: Management is responsible for the design, implementation and maintenance of an appropriate system of internal control. Proper segregation of duties is an important aspect of any control system. The following duties lack adequate segregation of duties: • The same individual that reconciles the bank accounts also approves and codes invoices, creates deposits and processes and initiates debt payments. • This individual is also the primary staff who compiles and reviews grant claims. Effect: Errors or intentional fraud could occur and not be detected timely by other employees in the normal course of their responsibilities as a result of the lack of segregation of duties. Cause: Limited number of personnel. Criteria: Segregation of duties is an aspect of internal control intended to prevent or decrease opportunities of intentional and unintentional errors and fraud. Duties and responsibilities are properly segregated if no single individual either has control over all phases of a transaction or has the ability to both make and conceal an error, whether such error is intentional or unintentional. Recommendation: We recommend that the Board of Education and the Superintendent continue to monitor the transactions and the financial records of the District. We also encourage the District to continue to identify cost effective opportunities to improve the design of the internal control structure. Response: We agree with this finding but do not believe it is cost effective to increase the office staff in an attempt to bring about a more effective segregation of duties. The Board of Education approves monthly accounts payable checks and the Superintendent reviews payroll timesheets prior to processing payroll. The Superintendent also approves journal entries before they are posted to the accounting ledger. The Board of Education and Superintendent will continue to monitor transactions of the District.

2025-001: Segregation of Duties Condition: Management is responsible for the design, implementation and maintenance of an appropriate system of internal control. Proper segregation of duties is an important aspect of any control system. The following duties lack adequate segregation of duties: • The same individual that reconciles the bank accounts also approves and codes invoices, creates deposits and processes and initiates debt payments. • This individual is also the primary staff who compiles and reviews grant claims. Effect: Errors or intentional fraud could occur and not be detected timely by other employees in the nomrnl course of their responsibilities as a result of the lack of segregation of duties. Cause: Limited number of personnel. Criteria: Segregation of duties is an aspect of internal control intended to prevent or decrease opportunities of intentional and unintentional errors and fraud. Duties and responsibilities are properly segregated if no single individual either has control over all phases of a transaction or has the ability to both make and conceal an error, whether sucherror is intentional or unintentional. Recommendation: We recommend that the Board of Education and the Superintendent continue to monitor the transactions and the financial records of the District. We also encourage the District to continue to identify cost effective opportunities to improve the design of the internal control structure. Response: We agree with this finding but do not believe it is cost effective to increase the office duties. The Board of Education approves monthly accounts payable checks and the Superintendent reviews payroll timesheets prior to processing payroll. The Superintendent also approves journal entries before they are posted to the accounting ledger. The Board of Education and Superintendent will continue to monitor transactions of the District. Contact Person: Jessie Backes Anticipated Completion: Ongoing

2024-001

Finding #2023-002: ESSER II #84.425D COVID-19 – Education Stabilization Fund and ESSER III #84.425U COVID-19 – Education Stabilization Fund Federal Grantor: U.S. Department of Education Pass-through Award Numbers: 2022-252646-DPI-ESSERFII-163 and 2022- 252646-DPI-ESSERFIII-165 Pass-through Entity: Wisconsin Department of Public Instruction Condition: There were five Education Stabilization Fund construction projects performed by contractors/subcontractors. None of the contracts included prevailing wage language clauses and certified payrolls were not obtained by the District during the fiscal year expended. Not all contractors/subcontractors were able to provide certified payrolls when requested as part of the compliance testing. Criteria: Wage rate requirements apply to the Education Stabilization Fund when laborers and mechanics employed by contractors or subcontractors work on construction contracts more than $2,000. Laborers must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL). Nonfederal entities shall include in their contracts subject to wage rate requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly payrolls and a statement of compliance (certified payrolls). Cause: There was turnover in the business office and the contracts were secured and approved prior to the current business manager. The District was not aware of the applicable requirements related to these projects. Effect: A reimbursement request was made for expenditures that did not comply with wage rate requirements. Questioned Costs: $78,300 Recommendation: Establish procedures and controls to comply with wage rate requirements related to the Education Stabilization Fund. Obtain verification from contractors that prevailing wage rates were paid on the projects submitted for costs reimbursed by the grant. Response: The District became aware of the prevailing wage rate requirements after finishing the projects. Before bidding future construction projects more than $2,000, that may be funded with federal grant dollars, the request for bid and contract will include a prevailing wage rate clause. Certified payrolls will be received from contractors or subcontractors.

Finding #2023-002: ESSER II #84.425D COVID-19 – Education Stabilization Fund and ESSER III #84.425U COVID-19 – Education Stabilization Fund Federal Grantor: U.S. Department of Education Pass-through Award Numbers: 2022-252646-DPI-ESSERFII-163 and 2022-252646-DPI-ESSERFIII-165 Pass-through Entity: Wisconsin Department of Public Instruction Condition: There were five Education Stabilization Fund construction projects performed by contractors/subcontractors. None of the contracts included prevailing wage language clauses and certified payrolls were not obtained by the District during the fiscal year expended. Not all contractors/subcontractors were able to provide certified payrolls when requested as part of the compliance testing. Criteria: Wage rate requirements apply to the Education Stabilization Fund when laborers and mechanics employed by contractors or subcontractors work on construction contracts more than $2,000. Laborers must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL). Nonfederal entities shall include in their contracts subject to wage rate requirements a provision that the contractor or subcontractor comply with those requirements and the DOL regulations. This includes a requirement for the contractor or subcontractor to submit to the District weekly payrolls and a statement of compliance (certified payrolls). Cause: There was turnover in the business office and the contracts were secured and approved prior to the current business manager. The District was not aware of the applicable requirements related to these projects. Effect: A reimbursement request was made for expenditures that did not comply with wage rate requirements. Questioned Costs: $78,300 (Amount for which certified payrolls were not subsequently provided) Recommendation: Establish procedures and controls to comply with wage rate requirements related to the Education Stabilization Fund. Obtain verification from contractors that prevailing wage rates were paid on the projects submitted for costs reimbursed by the grant. Response: The District became aware of the prevailing wage rate requirements after finishing the projects. Before bidding future construction projects more than $2,000, that may be funded with federal grant dollars, the request for bid and contract will include a prevailing wage rate clause. Certified payrolls will be received from contractors or subcontractors. Additionally, the district has obtained payroll data from all each contractor to provide support for wage rates paid if necessary. Contact Person: Erik Farrar Anticipated Completion: March 15, 2024