School District of Stratford

2023-003 Child Nutrition Cluster - Segregation of Duties Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Entity Identifying Number: 2023-375628-DPI-SB-546, 2023-375628-DPI-NSL-547 Award period: July 1, 2022 – June 30, 2023 Type of Finding: • Material Weakness in Internal Control Over Compliance • Other Matters Compliance Requirements: Eligibility, Procurement, Reporting Criteria or Specific Requirement: Uniform Guidance requires entities that expend federal funds are required to implement a system of internal controls to ensure that the entity remains in compliance with the requirements of the grant. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: For activities related to Eligibility, Procurement, and Reporting, the District had not established procedures related to the documenting of the review and approval of the compliance requirements. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over reporting compliance requirements. Questioned Costs: None. Context: During our testing we noted no review of the calculation of eligibility for the five applications submitted for testing, no review of the six monthly reports selected for testing, no approval on eight of the eleven micro-purchase transactions, and no documentation to support the price comparison for two of the three small purchase transactions selected for testing. Cause: The District has not established policies to identify an individual to review the District’s compliance with the federal awards and how their review and approval is documented Effect: Without an adequately designed system of internal controls over compliance, the District has an increased risk of non-compliance with the grant requirements. These risks include providing or denying benefits incorrectly, misreporting activities, or violating federal procurement requirements. Repeat Finding: Repeat of Finding 2022-004 and 2022-005 Recommendation: We recommend that the District review the compliance requirements of the grant program and evaluate the currently assigned responsibilities by position to ensure that an adequate system of internal controls, including proper segregation of duties, exists. Views of Responsible Officials: There is no disagreement with the audit finding.

2023-004 ESSER - Segregation of Duties – Grant Reporting Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425D, 84.425U Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Entity Identifying Number: 2021-375628-DPI-ESSERF-160, 2022-375628-DPI-ESSERFII-163, 2023-375628-DPI-LETRS-165 Award period: March 13, 2020 – September 30, 2023 Type of Finding: • Material Weakness in Internal Control Over Compliance Compliance Requirements: Reporting Criteria or Specific Requirement: Grant Reports filed by the District to the various granting agencies must be accurate and reconcile to the District’s records. Internal controls should be designed and implemented to prevent and detect errors in the data reported on the grant claims. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: There was no review of the reports and claims for reimbursement by someone other than the preparer prior to submission. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over reporting compliance requirements. Questioned Costs: None. Context: Of the two sampled reports, none of the reports had sign off or final reviews indicating review and approval had occurred prior to submission to the federal government. Cause: The District currently has the business manager compile the data and prepare the reports based on data from the District’s software. However, the District has not designated an individual to review and approve the report prior to submission to ensure there was not an error during the compilation and preparation procedure. Effect: The District may incorrectly report certain activities. Repeat Finding: No Recommendation: We recommend that the District implement a review process over the reporting requirements related to the ESSER grants. Views of Responsible Officials: There is no disagreement with the audit finding.

Child Nutrition Cluster - Segregation of Duties ? Grant Reporting Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Entity Identifying Number: 2022-375628-DPI-SB-546, 2022-375628-DPI-NSL-547 Award period: July 1, 2021 ? June 30, 2022 Type of Finding: Material Weakness in Internal Control Over Compliance Compliance Requirements: Reporting Criteria or Specific Requirement: Grant claims filed by the District to the various granting agencies must be accurate and reconcile to the District?s records. Internal controls should be designed and implemented to prevent and detect errors in the data reported on the grant claims. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: There was no review of the reports and claims for reimbursement by someone other than the preparer prior to submission. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over reporting compliance requirements. Questioned Costs: None. Context: Of the six sampled claims, none of the reports had sign off or final reviews indicating review and approval had occurred prior to submission to the federal government. Cause: The District currently has the business manager compile the data and prepare the monthly reports based on data from the school nutrition software. However, the District has not designated an individual to review and approve the report prior to submission to ensure there was not an error during the compilation and preparation procedure. Effect: There could be the possibility that the client would over- or under-report certain items for reimbursement. Repeat Finding: No Recommendation: We recommend that the District implement a review process over the reporting requirements related to the Child Nutrition Cluster. Views of Responsible Officials: There is no disagreement with the audit finding.

Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Entity Identifying Number: 2022-375628-DPI-SB-546, 2022-375628-DPI-NSL-547 Award period: July 1, 2021 ? June 30, 2022 Type of Finding: Material Weakness in Internal Control Over Compliance and Other Matters Compliance Requirements: Procurement Criteria or Specific Requirement: Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: The business manager is responsible for preparing and reviewing procurement transactions related to the Child Nutrition Cluster. For some transactions, there was no review or proper procedure such as obtaining multiple quotes from a number of vendors and there was no control in place to review a vendor on the Sam.gov or other listing to see if they were suspended or debarred from receiving federal funds. Questioned Costs: None. Context: One out of eight micro-purchase transactions and two of six small purchase or proposal transactions tested had documented review and approval for the purchase. The District also did not have documented internal controls to ensure that the vendors were not suspended or debarred from receiving federal funds prior to. In addition, the District did not obtain price comparisons as required by District policy for two procurement transactions out of the five such transactions. Cause: Due to the limited staff size at the District, the majority of the procurement process the responsibility of the business manager with minimal oversight by other positions in the District. Due to this organization structure, there is not proper segregation of duties in place to allow for full review, approval, and verification that all procurement requirements were followed. Effect: The District could procure with vendors who are suspended or debarred or not allow themselves proper review of competition that may cause them to overspend on an item or service. Repeat Finding: No Recommendation: We recommended that the District implement a review process over the procurement requirements and establish controls over suspension and debarment related to the grant programs during the fiscal year. The District should also review its procurement policy to ensure that the thresholds within the policy match current federal requirements. Views of Responsible Officials: There is no disagreement with the audit finding.