INDEPENDENT SCHOOL DISTRICT NO. 777 BENSON PUBLIC SCHOOLSLocal Government

2024-004 – Suspension and Debarment Federal agency: U.S. Department of Agriculture Federal program title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, and 10.582 Pass-Through Agency: Minnesota Department of Education Pass-Through Number(s): 1-0777-000 Award Period: July 1, 2023 - June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Per 2 CRF section 180.995, the District should have controls in place to review vendors showing they are not excluded or debarred for participating in procurement transactions that use federal funds. Condition: During suspension and debarment testing, it was noted that the District did not verify that the vendors/contractors were not suspended or debarred until after awarding the contract. Questioned Costs: Not applicable. Context: 2 of 2 vendors tested had no review before the awarding the contract to ensure they were not suspended or debarred. Cause: Oversight. Effect: Lack of proper documentation of controls over compliance with suspension and debarment requirements could result in paying suspended or debarred vendors. This could ultimately result in questioned costs. After review of vendors, it was noted that no vendors used were on the suspension or debarment list. Repeat Finding: Not a repeat finding. Recommendation: We recommend the District review suspension and debarment before entering into contracts with vendors. Views of Responsible Official: There is no disagreement with the finding.

Criteria: A good system of internal control requires an adequate segregation of duties so that no one individual has incompatible responsibilities. No one person should have more than one duty relating to the authorization (approval), custody of assets (check signers), record keeping, and reconciliation function. This should be documented in a written policy. Condition: The District does not have adequate segregation of accounting duties or related written policy. Context: This finding impacts the internal control for all significant accounting functions. Effect: Inadequate segregation of duties could adversely affect the District's ability to detect misstatements in amounts that would be material in relation to the financial statements in a timely period by employees in the normal course of performing their assigned functions. Cause: Due to program changes from the national school lunch program to the summer food service program and the complexities that offered, the internal control policies did not keep up. Questioned Costs: None Recommendation: The accounting functions should be reviewed to determine if additional segregation of duties is feasible and to improve the efficiency and effectiveness of financial management and financial statement accuracy for the District. The District, if possible, should have a plan in place for temporary absences of current staff. The District should also adopt the policy in writing.

C ? FEDERAL AWARD FINDINGS & QUESTIONED COSTS Audit Finding 2020-008 ? Child Nutrition Cluster (CFDA 10.533, 10.555): Grant Period ? Year Ended June 30, 2020, Department of Agriculture & Department of Education, passed through Minnesota Department of Education Criteria: A good system of internal control requires an adequate segregation of duties so that no one individual has incompatible responsibilities. No one person should have more than one duty relating to the authorization (approval), custody of assets (check signers), record keeping, and reconciliation function. This should be documented in a written policy. Condition: The District does not have adequate segregation of accounting duties or related written policy. Context: This finding impacts the internal control for all significant accounting functions. Effect: Inadequate segregation of duties could adversely affect the District's ability to detect misstatements in amounts that would be material in relation to the financial statements in a timely period by employees in the normal course of performing their assigned functions. Cause: Due to personnel changes and circumstances of health & civic duties at times one person is doing all the accounting functions of cash receipts, disbursements & journal entries. Questioned Costs: None Recommendation: The accounting functions should be reviewed to determine if additional segregation of duties is feasible and to improve the efficiency and effectiveness of financial management and financial statement accuracy for the District. The District, if possible, should have a plan in place for temporary absences of current staff. The District should also adopt the policy in writing.