SCHOOL DISTRICT OF JEFFERSONLocal Government

Reference Number: 2025-004 Program Name: Child Nutrition Cluster Description: Procurement Criteria Per 2 CFR 200.213 and 2 CFR Part 180, subpart C, when federal funds are used for contracts exceeding $25,000, the non-Federal entity must verify that vendors are not suspended or debarred by obtaining a certification, adding appropriate contract language, or checking SAM.gov. DPI School Nutrition Program procurement requirements incorporate these Uniform Guidance rules for all applicable food service procurements. Condition The District participates in a cooperative, which conducts bidding and procurement activities for food service vendors on behalf of its member districts. For one required vendor under the cooperative’s awarded contracts, the procurement agent did not obtain or document the required Suspension and Debarment verification. As a result, the District did not have evidence that the vendor had been checked against the federal suspension and debarment list prior to purchases made during the audit period. The District relies on its procurement agent for School Nutrition Program purchases and does not independently select or negotiate with vendors awarded through the cooperative. The missing documentation was related to the procurement agent’s procedures rather than the District’s internal processes. Cause The District did not perform or retain the required Suspension and Debarment verification for this vendor as part of its procurement documentation. Effect The District lacked required evidence supporting that federal Child Nutrition Program funds were not expended with a vendor that had been suspended or debarred. Questioned Costs None. There is no indication that the vendor was suspended or debarred. Recommendation We recommend the District communicate this issue to their procurement agent and request that the cooperative enhance its procurement procedures to ensure Suspension and Debarment verification is obtained and retained for all awarded vendors. The District should also obtain supplemental verification if documentation is not available from the procurement agent prior to making purchases with federal funds. Views of Responsible Officials and Corrective Action See Corrective Action Plan.

Program Name: Child Nutrition Cluster Description: Eligibility Condition and Criteria: During our testing we noted the following deficiencies in eligibility testing: 1 of the 40 students selected did not have a properly completed free and reduced lunch application. It was approved based on participating in Badgercare, which is not an eligible criterion. Cause: The free and reduced lunch application was not appropriately reviewed and approved. Effect: The District is not in compliance with eligibility requirements. Questioned Costs: N/A. Identification of a Repeat Finding: This is not a repeat finding. Auditors’ Recommendation: We recommend the District review procedures related to eligibility verification and ensure that applications are obtained, completed and reviewed each year. Views of Responsible Officials: See attachment for the District’s corrective action plan.

Program Name: Child Nutrition Cluster Description: Procurement Condition and Criteria: 2 CFR part 215 requires entities establish and follow a procurement policy when purchasing goods and services charged to the federal programs. While the District does have an acceptable procurement policy, the policy was not followed for the purchase of $190,403 of cafeteria equipment, as bids were not requested even though it fell within the small purchase category. Cause: The procedure to obtain at least two price quotes was bypassed and a vendor known to an employee was used. Effect: The District was not in compliance with procurement for this purchase. Identification of a Repeat Finding: This is not a repeat finding. Auditors’ Recommendation: We recommend the District always follow the procurement policy that is in place when making purchases that fall within any of the purchase thresholds. Views of Responsible Officials: See attachment for the District’s corrective action plan.

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 Many of the accounting functions are performed by one individual, including: ? Recording vendor invoices ? Preparing checks and signing with use of electronic signature ? Mailing of checks The same individual has the ability to record journal entries and reconcile accounts. Cause Due to limitations in staff size, one employee has control over the authorization, custody, and recordkeeping duties of the cash disbursement cycle. Effect The lack of segregation of duties could result in the possibility of undetected errors or irregularities. Recommendation This is a repeat finding. The prior year finding was 2020-002. 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 and Corrective Action See Corrective Action Plan.

2020-002 - 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 Many of the accounting functions are performed by one individual, including: ? Recording vendor invoices ? Preparing checks and signing with use of electronic signature ? Mailing of checks The same individual has the ability to record journal entries and reconcile accounts. Cause Due to limitations in staff size, one employee has control over the authorization, custody, and recordkeeping duties of the cash disbursement cycle. Effect The lack of segregation of duties could result in the possibility of undetected errors or irregularities. Recommendation This is a repeat finding. The prior year finding was 2019-002. 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.

2020-003 - Audit Adjusting Entries Criteria Statements on Auditing Standards AU ?314.41 states it is the responsibility of management to implement proper internal controls to provide reasonable assurance about the achievement of the entity?s objectives with regard to the reliability of financial reporting. Condition One or more audit adjustments were required to prevent the District?s financial statements from being misstated. Cause Inadequate controls 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. Effect Without the audit adjustment(s), the financial statements of the District would have been misstated. Recommendation We recommend 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.

2020-005 - Written Procedures Condition and Criteria 2 CFR 200, Subparts D and E require the District to have written procedures. The Uniform Guidance requires the following written procedures that the District does not have in place: - How the District requests reimbursements (2 CFR 200.305) - How the District determines whether a cost is allowable (2 CFR 200.403) Cause There was an administrative oversight of ensuring the District had these written procedures in place. Effect The District does not have written procedures that ensure the District is in compliance with Uniform Guidance. Recommendation We recommend the District implement written procedures as required by Uniform Guidance.

2019-002 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 Many of the accounting functions are performed by one individual, including: ? Recording vendor invoices ? Preparing checks and signing with use of electronic signature ? Mailing of checks The same individual has the ability to record journal entries and reconcile accounts. Cause Due to limitations in staff size, one employee has control over the authorization, custody, and recordkeeping duties of the cash disbursement cycle. Effect The lack of segregation of duties could result in the possibility of undetected errors or irregularities. Recommendation This is a repeat finding. The prior year finding was 2018-002. 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 and Corrective Action See Corrective Action Plan.

2018-003 - Procurement Department: United States Department of Education Program Name: Special Education Cluster Federal #: 84.027 and 84.173 Condition 2 CFR part 215 requires the District to establish and follow a procurement policy when purchasing goods and services charged to the federal programs. The District?s procurement policy states that for purchases above $10,000 but below $250,000, price or rate quotations must be obtained in advance from a reasonable number of qualified sources unless a valid basis exists for relying on procurement by noncompetitive proposals exists. Criteria The District charged services with two companies with costs greater than $10,000 but less than $250,000 to the federal programs. The District did not obtain price or rate quotations or document why the District relied on a noncompetitive proposal process. Cause The District did not bid them out as they were recurring contracts from established providers. Effect The District did not follow their procurement policy or Uniform Guidance requirements as the District did not obtain price or rate quotations or document why the District relied on a noncompetitive proposal process. Recommendation We recommend the District ensure that price or rate quotations are obtained, or documentation exists as to why the District relied on a noncompetitive proposal process for all applicable contracts or purchases greater than $10,000 but less than $250,000. Views of Responsible Officials and Corrective Action See Corrective Action Plan.

2018-004 - Written Procedures Condition and Criteria 2 CFR 200, Subparts D and E require the District to have written procedures. The Uniform Guidance requires the following written procedures that the District does not have in place: - How the District requests reimbursements (2 CFR 200.305) - How the District determines whether a cost is allowable (2 CFR 200.403) Cause There was an administrative oversight of ensuring the District had these written procedures in place. Effect The District does not have written procedures that ensure the District is in compliance with Uniform Guidance. Recommendation We recommend the District implement written procedures as required by Uniform Guidance. Views of Responsible Officials and Corrective Action See Corrective Action Plan.

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