Roseville Area SchoolsLocal Government

FINDING: 2025-001 – Reporting Federal Agency: U.S. Department of Agriculture & U.S. Department of Education Federal Program: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555 and 10.558 Pass Through Agency: Minnesota Department of Education Pass Through Number: 1-0882-000 Award Period: Fiscal year ended June 30, 2025 Type of Finding: Material Weakness in Internal Control Over Compliance and Other Matters Criteria or specific requirement: Claims for Reimbursement -SFAs and sponsors must submit monthly claims for reimbursement for meals and snacks served to eligible students within 60 days following the last day of the month covered by the claim (7 CFR sections 210.8, 220.11, 215.10, and 225.15(c)). The State agency has an additional 30 days to submit a consolidated report to FNS via the FNS10 for NSLP/SBP and the FNS-418 for SFSP (7 CFR 210.5(d), 220.13(b)(2), 215.11(c)(2), and 225.8). Condition: During reporting testing it was noted that 1 report did not tie to the claims summary due to one site's breakfast program changing to non-severe during the summer and it not yet being captured on the report, and 1 report did not tie to the claims summary due to a clerical error where numbers were transposed in the claims summary by 36 meals which led to the school receiving $4 less than they would have otherwise. Cause: Internal controls were insufficient to ensure this reporting process occurred. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of claims reports. Repeat finding: No Recommendation: We recommend the District implements internal controls sufficient to ensure the reporting process is occurring. Views of responsible official: There is no disagreement with the audit finding. The District will implement sufficient procedures.

Federal agency: U.S. Department of Education Federal program name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220087, 2023 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: H027A190087 Award Period: Fiscal year 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria or specific requirement:2 CFR § 180.300 requires that before the District enters into a covered transaction with an entity at a lower tier, the District must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. 2 CFR 200.303 requires that the entity have sufficient controls over compliance related to federal awards. Condition: In our testing for the Special Education Cluster, we noted instances where there was no documentation of this verification being performed. Questioned Costs: None Context: During testing of the program, it was noted that four of five contracts that were tested were entered into without the District verifying and retaining documentation of said verification that the vendors were not suspended or debarred by the federal government. Cause: The District’s practice of ensuring sam.gov was checked for all contracts entered into and documentation retained was not performed as expected during the pandemic, and thereafter during fiscal year 2023 within the special education program. Effect: The District was not in compliance with federal suspension and debarment requirements. Repeat Finding: Yes, 2022-003. Recommendation: We recommend the District ensure that this suspension and debarment verification occurs before entering covered transactions and that supporting documentation of this internal control is retained. Views of responsible officials: There is no disagreement with the audit finding.

Federal agency: U.S. Department of Education Federal program name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220087, 2023 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: H027A190087 Award Period: Fiscal year 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at CFR sections 200.318 through 200.326. This includes utilizing one of the five allowable procurement methods, including small purchase guidelines for items over the micro-purchase threshold and sealed bids, competitive proposals, or noncompetitive proposals when items exceed the simplified acquisition threshold. In addition, the Uniform Guidance requires that the entity maintain records sufficient to detail the history of the procurement. 2 CFR 200.303 requires that the entity have sufficient controls over compliance related to federal awards. Condition: During our testing of the District’s procurements within the Special Education program, it was noted that not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Questioned Costs: ALN 84.027 - $38,869 Context: Out of five procurement which were tested, we noted two of them for which the District did not retain documentation detailing the history of the procurement, including the rationale for choosing the particular vendor. Cause: The District during the pandemic and thereafter, was not able to properly ensure all contracts has procurement documentation retained and performed as required by the Uniform Guidance. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes, 2022-004. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of responsible officials: There is no disagreement with the audit finding.

Finding 2022-003 Federal agency: U.S. Department of Education Federal program name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220087, H173A190086, 2022 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: H027A190087, H173A180086 Award Period: Fiscal year 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria or specific requirement: 2 CFR ? 180.300 requires that before the District enters into a covered transaction with an entity at a lower tier, the District must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: In our testing for the Special Education Cluster, we noted instances where there was no documentation of this verification being performed. Questioned Costs: None Context: During testing of the program, it was noted that five of seven contacts that were tested were entered into without the District verifying and retaining documentation of said verification that the vendors were not suspended or debarred by the federal government. Cause: The District?s practice of ensuring sam.gov was checked for all contracts entered into and documentation retained was not performed as expected during the pandemic, and shortly thereafter during fiscal year 2022. Effect: The District was not in compliance with federal suspension and debarment requirements. Repeat Finding: Yes, this is a repeat finding. It was presented as Finding 2021-010 in the previous report for fiscal year 2021. Recommendation: We recommend the District ensure that this suspension and debarment verification occurs before entering covered transactions and that supporting documentation of this internal control is retained. Views of responsible officials: There is no disagreement with the audit finding.

Finding 2022-004 Federal agency: U.S. Department of Education Federal program name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220087, H173A190086, 2022 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: H027A190087, H173A180086 Award Period: Fiscal year 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance (Modified Opinion) Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at CFR sections 200.318 through 200.326. This includes utilizing one of the five allowable procurement methods, including small purchase guidelines for items over the micro-purchase threshold and sealed bids, competitive proposals, or noncompetitive proposals when items exceed the simplified acquisition threshold. In addition, the Uniform Guidance requires that the entity maintain records sufficient to detail the history of the procurement. Condition: During our testing of the District?s procurements within the Special Education program, it was noted that not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Questioned Costs: ALN 84.027 - $173,812.24. Context: Out of seven procurement which were tested, we noted five of them for which the District did not retain documentation detailing the history of the procurement, including the rationale for choosing the particular vendor. Cause: The District during the pandemic and shortly thereafter, was not able to properly ensure all contracts has procurement documentation retained and performed as required by the Uniform Guidance. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all procurement transactions. Repeat Finding: Yes, this is a repeat finding. It was presented as Finding 2021-012 in the previous report for fiscal year 2021. Recommendation: We recommend the District reviews its procedures and controls over procurement to ensure that all procurements are documented such that a third party can clearly see and understand the detailed history of the procurement. Views of responsible officials: There is no disagreement with the audit finding.

Finding 2022-005 Federal agency: U.S. Department of Education Federal program name: Special Education Cluster Assistance Listing Number: 84.027 and 84.173 Federal Award Identification Number and Year: H027A220087, H173A190086, 2022 Pass-Through Agency: Minnesota Department of Education Pass-Through Number: H027A190087, H173A180086 Award Period: Fiscal year 2022 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non- Federal entity, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: During our testing of a sample of payroll transactions charged to the grant we noted not all transactions were supported by properly approved documentation. Questioned Costs: ALN 84.027? Known $2,884 Context: Of a sample of 40 payroll disbursement charged to the grant we noted one disbursement which was not properly supported by time and effort documentation and one disbursement where documentation of the approval of the rate paid was not provided. Cause: The District was not documenting time and effort for this individual as their wages were initially coded to FIN 161 during the year. The District thought the special education department would be tracking time and effort but the special education department only determined who should be tracked based on the finance code that the employee was coded to for payroll. The employee paid an incorrect amount was paid a wage of $25, which has historically been what interpreters are paid, however there was no documentation available to show that amount was approved. Effect: The District was not in compliance with time and effort documentation requirements of the Uniform Guidance. Repeat Finding: No Recommendation: We recommend the District reviews its procedures for charging wages and benefits to federal grants to ensure all are properly supported by time and effort documentation. Views of responsible officials: There is no disagreement with the finding.

Finding 2021-010 Federal agency: U.S. Department of Agriculture Federal program titles: Child and Adult Care Food Program CFDA Number: 10.558 Pass-Through Agency: Minnesota Department of Education Award Period: Fiscal year 2021 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: 2 CFR ? 180.300 requires that before the District enters into a covered transaction with an entity at a lower tier, the District must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: In our testing for the Child and Adult Care Food Program, we noted an instance where documentation showed verification after entering into a covered transaction, but no documentation was available showing verification occurring before entering into the covered transaction. Questioned Costs: None Context: During testing of the program, it was noted that three of five contacts over $25,000 that were tested were entered into without the District verifying and retaining documentation of said verification, that the vendors were not suspended or debarred by the federal government. This was a statistically valid sample. Cause: The District?s food service employees that would normally perform this step for the District were feeling pressured by their available time to complete the task prior to entering into agreements with these vendors. Therefore, it was not performed by them. Effect: Documentation showing evidence of this internal control was not available due to it not occurring for these three instances during the year. Repeat Finding: Yes, this is a repeat finding. It was presented as Finding 2020-001 in the previous report for fiscal year 2020. Recommendation: We recommend the District ensure that this suspension and debarment verification occurs before entering covered transactions and that supporting documentation of this internal control is retained. Views of responsible officials: Management is expecting now that they are not trying to administer external food service programs during remote service to students due to the pandemic, that this procedure will be followed going forward.

Finding 2021-011 Federal agency: U.S. Department of Agriculture Federal program titles: Child and Adult Care Food Program CFDA Number: 10.558 Pass-Through Agency: Minnesota Department of Education Award Period: Fiscal year 2021 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or specific requirement: Uniform guidance requires that the District have proper controls in place over the submission of meals served for federal reimbursement and that these controls be sufficiently documented. Condition: In our testing sample for Child and Adult Care Food Program, we were unable to view documentation of the internal review process over the submission of meals served. Questioned Costs: None Context: During testing of the program, it was noted that none of the five meal claim submissions were supported by documentation indicating they were reviewed by an appropriate individual prior to submission. Cause: The District had a review process in place but did not take the necessary steps to ensure that review was documented. Effect: The District was not in compliance with Uniform Guidance requirements for the proper documentation of all internal controls over compliance. Repeat Finding: No Recommendation: We recommend the District review its procedures and ensure all federal program personnel fully understand requirements around compliance and internal controls over compliance. A documentation process for all program compliance areas should be implemented. Views of responsible officials: Management is in agreement with the finding and they have immediately implemented a documentation process for meal claims going forward.

Finding 2021-012 Federal agency: U.S. Department of Agriculture Federal program titles: Child and Adult Care Food Program CFDA Number: 10.558 Pass-Through Agency: Minnesota Department of Education Award Period: Fiscal year 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Uniform guidance requires that the District ensure that purchases over the micro-purchase threshold for the District of $10,000 go through the appropriate procurement procedures. This includes properly considering alternative vendors to see if the District is paying a reasonable price for the item or service and documenting that decision making process. This could be done through quotes, whether formal or informal, or reviewing alternative services online and documenting some applicable prices. This helps to ensure open and fair competition for the federal spending is maintained each year. Condition: In our testing sample for Child and Adult Care Food Program, we noted an instance where the district did not perform a cost analysis or document their decision-making process for going with the vendor they utilized. This instance had to do with the Commercial Kitchen Services vendor. Questioned Costs: None Context: During testing of the program, it was noted that one of the six procurements we tested did not have the proper procurement assessment performed and documented prior to entering into the contract for goods or services. This was a statistically valid sample. Cause: The District was familiar with this vendor for the services being provided and did not choose to perform an assessment of if they were getting a good price for the service compared to other vendors, prior to utilizing them again in fiscal year 2021. Effect: The District was not in compliance with the procurement guidelines as laid out within the Uniform Guidance. They did not have any documentation of the assessment being performed for this vendor available for review. Repeat Finding: No Recommendation: We recommend the District reviews its procurement policies and procedures to ensure that the proper procurement methods are utilized for all transactions. Views of responsible officials: Management is expecting now that they are not trying to administer external food service programs during remote service to students due to the pandemic, that this procedure will be followed going forward.

Finding 2020-001 Federal agency: U.S. Department of Agriculture Federal program titles: Child Nutrition Cluster CFDA Number: 10.553, 10.555 and 10.559 Pass-Through Agency: Minnesota Department of Education Award Period: Fiscal year 2020 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR ? 180.300 requires that before the District enters into covered transaction with an entity at a lower tier, the District must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: In our testing sample for Child Nutrition, we noted an instance where documentation showed verification after entering into a covered transaction. However, no documentation was available showing verification occurring before entering into the covered transaction. Questioned Costs: None Context: One sampled procurement did not have evidence of such verification prior to entering into a covered transaction. Cause: Responsible employee failed to retain record of verification the vendor in question was run through the federal database to ensure there was no record of suspension or debarment in federal data base. This process is required to be completed prior to doing business with a new vendor and at the beginning of each fiscal year with all current vendors. Effect: Documentation showing evidence of this internal control was not available. Repeat Finding: N/A Recommendation: We recommend the District ensure that this suspension and debarment verification occurs before entering into covered transactions and that supporting documentation of this internal control is retained. Views of responsible officials: There is no disagreement with the audit finding.

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