INDEPENDENT SCHOOL DISTRICT 2170

2024-003 FINDING Federal Program COVID-19 Education Stabilization Funds (AL 84.425D, 84.425U) Special Tests – Wage Rate Requirements Criteria A system of internal controls requires the review of certified payrolls to ensure contractors are paying their employees at the required federal rates. Condition Inquired of the District regarding reviews of the submitted certified payrolls to ensure the rates are paid according to federal pay rates. We noted the District did not review the certified payrolls received. Questioned Costs None Context The District is not reviewing the submitted certified payrolls to ensure contractors are paying their employees at the correct federal wage rates on construction projects that are funded with federal dollars. Cause Oversight by management. Effect The District has an increased risk of not being in compliance with federal wage rate requirements. Repeat Finding Yes, see prior year finding 2023-004. Recommendation The District should implement policies and procedures to ensure all certified payrolls are reviewed to ensure wages are paid according to federal wage rates. Views of Responsible Officials and Planned Corrective Actions The District agrees with the recommendation and will review its procedures.

Federal Program COVID-19 Education Stabilization Funds (AL 84.425D, 84.425U) Special Tests – Wage Rate Requirements Criteria Uniform Guidance states “the contractor or subcontractor must submit to the nonfederal entity weekly, for each week in which any contract is performed, a copy of the payroll and statement of compliance (certified payrolls)”. Condition Three vendors whose construction projects were overseen by the District were missing signed contracts and did not have the required certified payrolls submitted. Questioned Costs None Context The District did not have signed contracts or certified payrolls from three contractors of the twelve selected for testing. Cause Oversight by management. Effect The District is not in compliance with the wage rate requirement. Repeat Finding No. Recommendation The District should implement policies and procedures to ensure all construction contracts financed by federal assistance follow the wage rate requirements. Views of Responsible Officials and Planned Corrective Actions The District agrees with the recommendation and will review its procedures.

2022-003 FINDING Federal Program Child Nutrition Cluster (AL 10.553, 10.555, 10.559) Reporting Criteria To receive reimbursement payment for meals served, the District must submit the number of meals served and all claims must be supported by accurate meal counts by category and type. Condition We randomly selected four months during the year and tested the monthly meal reimbursement reports submitted for reimbursement. Three of the four months had differences between the meals on the supporting documentation and the meals submitted for reimbursement. The net dollar amount of the differences for the three months was $3,505 claimed and received in excess of supporting documentation. Questioned Costs None Context The District misstated the daily meal counts in the monthly reports submitted for reimbursement. Cause The District does not have sufficient procedures in place to ensure all meals are reported correctly Effect The District misstated the monthly meal counts submitted for reimbursement Recommendation The District should review their procedures for submitting meal counts for reimbursement. Views of Responsible Officials and Planned Corrective Actions The District agrees with the recommendation and will review its procedures.

Finding 2021-004 Internal Controls Over Cash Management Federal Program: Child Nutrition (ALN 10.559) Condition: Independent School District No. 2170 (the District) failed to obtain a signature on the Minnesota Department of Education daily meal count forms required under the Seamless Summer Option of the Child Nutrition program. Criteria: The District is required to maintain a clear audit trail evidencing the specific expenditures applied to the Federal Program and controls in place to verify the accuracy of such expenditures. Cause: Because the Seamless Summer Option and the daily meal count forms were new for the current fiscal year, the District was not fully aware of the program?s requirements. Effect: The failure to obtain noted signatures caused the District to not be in compliance with the program?s requirements. Context: This is a control requirement required by the Minnesota Department of Education to assure that expenditures submitted under the program are complete and accurate. Questioned Costs: None identified. Recommendation: We recommend the District assess internal controls related to the Child Nutrition program and implement signatures on all required forms to assure submitted information is complete and accurate. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation. See corresponding Corrective Action Plan.

SECTION III: FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Finding 2019-002 Documentation Supporting Meals Claims Federal Program: CFDA 10.553/10.555/10.559 Child Nutrition Cluster Condition: The District failed to prepare and retain documentation to support certain meals that were served and reported to the State at a specific site, for which federal funding was received. Criteria: The District is required to accurately monitor, record, and report the numbers of meals that were served and how many of these were free or reduced. Cause: The District does not have an appropriate system or procedures in place to accurately monitor the number of meals served, including how many of these were free or reduced. Effect: The failure to retain documentation for meals served resulted in a lack of support for the number and types of meals served that were reported to the State for the site in question. Questioned Costs: None. The maximum potential impact was below the reportable threshold under Uniform Guidance. Recommendation: We recommend that the District evaluate current procedures for accurately monitoring, recording, and reporting the number of meals served at this site, including how many of these were free and reduced, and ensure proper documentation is retained supporting all reports submitted to the State. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation. See corresponding Corrective Action Plan.

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