INDEPENDENT SCHOOL DISTRICT NO. 31Local Government

2025-002 Federal Program Child Nutrition Cluster (10.553, 10.555, 10.559, 10.582) Compliance Requirement Eligibility Criteria Students receive a free or reduced meal by submitting an application online, or a paper application showing they are within the income threshold of the meal; or they are listed on MDE’s direct certification listing. Furthermore, a system of internal controls has all applications being reviewed and approved. Condition During testing, we noted two students who were listed incorrect in the District’s software. One student who the District could not provide support on their eligibility and one student whose application was not signed off by the district. Cause Management oversight Questioned Costs Undeterminable Context In a population over 250, 40 students who received either a free or reduced meal in FY25 was selected for testing. In this sample, we noted two students who were listed incorrectly in the District’s software when compared to the supporting data and one student who the District could not provide support for the reduced meal, and one student whose application was not signed off on. Effect The District could have improperly provided free or reduced meals to a student that wasn’t eligible. Repeat Finding No Recommendation The District should implement policies and procedures to ensure all students receive meals they qualify for, that all supporting documentation is retained, and that all applications are signed off as being reviewed and approved. Views of Responsible Officials The District will ensure all students will receive the meals they qualify for, retain all supporting documentation, and that all applications are being reviewed and approved.

Federal Program 21.027 – Coronavirus State and Local Fiscal Recovery Funds Procurement, Suspension, and Debarment Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. Condition We noted during testing that the only 2 vendors who qualified for suspension and debarment testing, were not checked for suspension or debarment. Cause Management oversight. Questioned Costs None Context The District did not ensure they were entering into covered transactions with vendors who do not have an active exclusion from federal status. Effect The District was not in compliance with Uniform Guidance and had an increased risk of entering into a covered transaction with a vendor who has an active exclusion of federal funds. Repeat Finding No Recommendation The District should document all covered vendors used to ensure suspension and debarment requirements are met. Views of Responsible Officials The District will ensure all covered vendors meet the requirements of suspension and debarment.

Federal Program 84.425 – Education Stabilization Fund Allowable Costs/Activities Allowed Criteria The District is required to maintain internal controls at a level where proper review and approval of journal entries are met. Condition We tested 40 transactions and in the 40 transactions, 20 of these transactions, which came from 5 journal entries, which we noted were not approved by an individual outside of the journal entry preparer. Cause The District experienced turnover in the accounting department. Questioned Costs None Context The District did not ensure journal entries were reviewed and approved by a separate individual. Effect The District was had an increased risk of improper journal entries being made to federal funds. Repeat Finding No Recommendation The District should ensure all journal entries are reviewed and approved. Views of Responsible Officials The District will ensure all journal entries are reviewed and approved.

Condition Testing of 40 applications found two instances where the application was not filled out properly and one instance where the students on the application were placed into an incorrect meal price category. ? One application was signed by a member not part of the household. ? One application was missing information in the household income section. ? One application had two foster students that were placed into the wrong meal price category. Criteria Uniform Single Audit guidance requires recipients of federal funds to have appropriate internal controls to ensure all free and reduced applications are properly completed and applied appropriately to the student?s accounts. Effect Lacking controls could lead to noncompliance with the requirements of this program and could require the return of grant funds to the grantor agency. Cause The District?s controls are not adequate to ensure the accuracy in the eligibility process. Repeat Finding No Recommendation We recommend the District design and implement internal controls and to ensure all free and reduced applications are completed properly and accurately applied to the student account.

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