INDEPENDENT SCHOOL DISTRICT NO. 270

Criteria: Under 2 CFR 200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: -Be supported by a system of internal controls; -Be incorporated into the official records of the non‑Federal entity; -Reasonably reflect total activity for which the employee is compensated; -Support distribution among specific activities or cost objectives. Commonly accepted forms of support include Personal Activity Reports (PARs), timesheets, or an equivalent system documenting actual time worked. Condition: During our testing of payroll charges for employees whose salaries were allocated to the programs, we noted that the entity improperly allocated funds for an employee based on time for a different employee based on the documentation provided supporting the distribution of time to the federal program. Context: Documentation was not properly maintained for support of all employees' salaries and wages tested. Cause: The District has had vacancies in certain positions that are key parts of the District's control processes which led to the District not maintaining proper documentation. Effect or Potential Effect: Without adequate expenditure documentation, there is an increased risk that payroll costs charged to the federal award are inaccurate or unallowable. The lack of supporting records may result in questioned costs related to unsupported salary expenditures. Questioned Costs: None Recommendation: We recommend that the entity: - Implement and enforce policies requiring Personal Activity Reports or an equivalent method that meets 2 CFR 200.430. - Train employees and supervisors responsible for documenting and approving time charged to federal programs. -Maintain documentation that accurately reflects actual time worked on federal awards

1. Explanation of Disagreement with Audit Finding: There is no disagreement with the finding. 2. Actions Planned in Response to Finding: Corrective actions are underway, including clarified expectations, additional training, and improved monitoring to prevent recurrence. Also, site-level recording and reporting templates have been implemented for the 2025-2026 school year and are in place at each recipient program. 3. Official Responsible for Ensuring CAP: The District’s Principal on Special Assignment who oversees the Title I program and the Business Services Director are the school officials responsible for carrying out the corrective action plan. 4. Planned Completion Date for CAP: The planned completion date for the CAP is June 30, 2026. 5. Plan to Monitor Completion of CAP: The Board of Education and administration will be monitoring this corrective action plan.

Audit Finding 2024-005 – Lack of Required Time and Effort Documentation Identification of the Federal Programs: Title I, Part A; Assistance Listing Number 84.010; Year 2024 Education Stabilization Funds; Assistance Listing Number 84.425D, 84.425U, 84.425W; Year 2024 Criteria: Under 2 CFR 200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal controls; • Be incorporated into the official records of the non‑Federal entity; • Reasonably reflect total activity for which the employee is compensated; • Support distribution among specific activities or cost objectives. Commonly accepted forms of support include Personal Activity Reports (PARs), timesheets, or an equivalent system documenting actual time worked. Condition: During our testing of payroll charges for employees whose salaries were allocated to the programs, we noted that the entity did not maintain Personal Activity Reports or other acceptable time‑and‑effort documentation supporting the distribution of time to the federal program. Context: Documentation was not maintained for support of all employees' salaries and wages tested. Cause: The District has had vacancies in certain positions that are key parts of the District's control processes which led to the District not maintaining proper documentation. Effect or Potential Effect: Without adequate time and effort documentation, there is an increased risk that payroll costs charged to the federal award are inaccurate or unallowable. The lack of supporting records may result in questioned costs related to unsupported salary expenditures. Questioned Costs: None Recommendation: We recommend that the entity: • Implement and enforce policies requiring Personal Activity Reports or an equivalent method that meets 2 CFR 200.430. • Train employees and supervisors responsible for documenting and approving time charged to federal programs. • Maintain documentation that accurately reflects actual time worked on federal awards.

Explanation of Disagreement with Audit Finding: There is no disagreement with the finding. Actions Planned in Response to Finding: Corrective actions are underway, including clarified expectations, additional training, andimproved monitoring to prevent recurrence. Also, site-level recording and reporting templateshave been implemented for the 2025-2026 school year and are in place at each recipientprogram. Official Responsible for Ensuring CAP: The District’s Principal on Special Assignment who oversees the Title I program and the BusinessServices Director are the school officials responsible for carrying out the corrective action plan. Planned Completion Date for CAP: The planned completion date for the CAP is June 30, 2025. Plan to Monitor Completion of CAP: The Board of Education and administration will be monitoring this corrective action plan.

2021 - 005 Time and Effort Documentation for Payroll Federal Agency: U.S. Department of Education Federal Program Title: Title I, Part A Assistance Listing Numbers: 84.010 Federal Award Identification Number and Year: S010A210023, 2022 Pass-Through Agency: Minnesota Department of Education Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: The Uniform Guidance requires charges to Federal awards for salaries and wages to be based on records that accurately reflect the work performed. In addition, these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, be incorporated into the official records of the entity, and reasonable reflect the total activity for which the employee is compensated. Condition: During our testing of a sample of payroll transactions charged to the grant we noted an instance of payroll costs being charged to the program for an employee who did not appear to have worked in the program. Questioned Costs: None Context: Of a sample of 40 payroll disbursement charged to the grant we noted one disbursement for which the supporting time and effort documentation showed that the employee did not work in the Title I program. Cause: The employee’s payroll costs were erroneously coded to the Federal program. Effect: The District was not in compliance with the Uniform Guidance requirements around allowable costs. Repeat Finding: This is not a repeat finding from the prior year. Recommendation: We recommend that the District reviews its procedures and controls over time and effort documentation for wages charged to Federal programs to ensure all documentation accurately reflects the work performed and that the time and effort documentation agrees with how the employee’s wages are allocated to the grant in the finance system. View of Responsible Official: There is no disagreement with the audit finding.

2022-005 Control Documentation Recommendation: We recommend that the District review its procedures and controls over time and effort documentation for wages charged to Federal programs to ensure all documentation accurately reflets the work performed and that the time and effort documentation agrees with how the employee’s wages are allocated to the grant in the finance system Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The District will make necessary modifications to its time and effort documentation and control process to ensure all wages charged to Federal programs accurately reflect the work performed. Name(s) of the contact person(s) responsible for corrective action: Tariro Chapinduka, Director of Business Services Planned completion date for corrective action plan: December 31, 2023

Finding Number: 2020-003 ? Cost Principles: Time and Effort Documentation Federal Agency: U.S. Department of Education Federal Program: Striving Readers Comprehensive Literacy Grant CFDA Numbers: 84.371 Pass Through Agency: Minnesota Department of Education Pass Through Number: 01-0270-000-000 Award Periods: Fiscal year ended June 30, 2020 Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Finding Criteria: The Uniform Guidance requires that entities retain records for all salaries and wages charged to federal grants. It further notes that those records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: It was noted during testing of allowable costs and cost principles that documentation of an internal control was not able to be provided for all employees whose salaries were charged in part to the federal program. Questioned Costs: None noted. Context: We noted thirteen of the forty employees utilize outlook calendars to track time, but there is no review over this tracking. Cause: Because employees were tracking and submitting their own time to MDE, the District did not realize an internal control was also required. Effect: The District was not in compliance with uniform guidance requirements to retain sufficient supporting documentation to support the history of all amounts charged to the federal program, including documentation of internal controls. Repeat Finding: This is not a repeat finding from the prior year. Recommendation: CLA recommends the District puts in place the proper procedures for documenting all time and effort as well as documenting an internal control over time and effort. View of Responsible Official: There is no disagreement with the audit finding.

2020-003 Cost Principles: Time and Effort Documentation Recommendation: CLA recommends the District puts in place the proper procedures for documenting all time and effort and ensuring any documentation is retained on District networks to be retained in the event of employee turnover. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The District will review its procedures for documenting time and effort to ensure that proper documentation is kept and retained and that all time and effort documentation is properly reviewed. Name(s) of the contact person(s) responsible for corrective action: Tariro Chapinduka, Director of Business Services Planned completion date for corrective action plan: December 31, 2020