Reorganized School District R-II of Cape Girardeau CountyLocal Government

Federal Program: U.S. Department of Agriculture passed through Missouri Department of Elementary and Secondary Education: Child Nutrition Cluster - School Breakfast Program (10.553) and National School Lunch Program (10.555). Criteria: According to the School Nutrition Programs Administrative Handbook for school year 2022-2023, the food service program must limit its cash resources to an amount that does not exceed three months' average expenditures for its nonprofit school food service program. Condition: The District had a current year carryover of $1,320,015 and a three-month average operating cost of $1,106,541 resulting in an excess balance of $213,474. Cause: The District's food service program has been operating at a profit in recent years and has accumulated the excess carryover. The District is aware of the excess carryover and did operate at a loss for the year. However, it was not enough to lower the carryover below the three-month average. Effect: The District has accumulated surpluses in the food service program which is intended to be a non-profit program. The District runs the risk of either not providing services that have been paid for, or overcharging for services actually provided. Questioned Costs: None. Context: Actual Child Nutrition expenditures were $2,293,885. Repeat Finding: Yes. Recommendation: We recommend the District monitor the profit made and ensure all expenditures used to operate the program are properly charged to the program. Views of Responsible Officials: The District will ensure that all eligible costs are charged to the program and modernize the equipment to reduce the accumulated carry-over.

Federal Program: U.S. Department of Agriculture passed through Missouri Department of Elementary and Secondary Education: Child Nutrition Cluster - School Breakfast Program (10.553) and National School Lunch Program (10.555); U.S. Department of Education passed through missouri Department of Elementary and Secondary Education: Special Education Cluster - Special Education - Grants to States (84.027) and Special Education - Preschool Grants (84.173). Criteria: When a sub-recipient of federal awards uses federal money to acquire goods and services expected to cost more than $25,000, the sub-recipient must determine if the vendor is suspended, debarred, or otherwise excluded from doing business with the federal government. Condition: The District purchased goods from eight vendors totaling greater than $25,000 that required the District to determine the vendor's status with the federal governnment. Seven vendors were required to be verified for the child nutrition cluster, however only four were verified and this was not done until May 2023, or the eleventh month of the fiscal year. One vendor was required to be verified from the special education cluster but this verification was not done. The vendors were, in fact, not excluded parties. The District needs to strengthen their internal controls in place to make sure all vendors are verified before the disbursements are made. Cause: Management oversight. Effect: Even though the District did comply with the requirements not to purchase goods with excluded parties, failing to check the excluded parties list increases the risk that the District will make payments to ineligible vendors and potentially claim inappropriate reimbursement. Questioned Costs: None. Context: Payments to eligible vendors of the child nutrition cluster totaled $1,506,376. Payments to the eligible vendor of the special education cluster totaled $30,051. Repeat Finding: Yes. Recommendation: We recommend the District verify a vendor's status by checking the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000 and paid with federal funds. Views of Responsible Officials: The District will verify all vendors' status using the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000.

Federal Program: U.S. Department of Agriculture passed through Missouri Department of Elementary and Secondary Education: Child Nutrition Cluster - School Breakfast Program (10.553) and National School Lunch Program (10.555). Criteria: According to the School Nutrition Programs Administrative Handbook for school year 2021-2022, the food service program must limit its cash resources to an amount that does not exceed three months? average expenditures for its nonprofit school food service program. Condition: The District had a current year carryover of $1,439,907 and a three-month average operating cost of $1,032,450 resulting in an excess balance of $407,457. Cause: The District?s food service program has been operating at a profit in recent years and has accumulated the excess carryover. The District has found that in recent years, not all actual allowable costs of the program have been charged to the program. Effect: The District has accumulated surpluses in the food service program which is intended to be a non-profit program. The District runs the risk of either not providing services that have been paid for, or overcharging for services actually provided. Questioned Costs: None. Context: Actual Child Nutrition expenditures were $3,883,833. Repeat Finding: No. Recommendation: We recommend the District monitor the profit made and ensure all expenditures used to operate the program are properly charged to the program. Views of Responsible Officials: The District will ensure that all eligible costs are charged to the program and modernize the equipment to reduce the accumulated carry-over.

Federal Program: U.S. Department of Agriculture passed through Missouri Department of Elementary and Secondary Education: Child Nutrition Cluster - School Breakfast Program (10.553) and National School Lunch Program (10.555); U.S. Department of Education passed through Missouri Department of Elementary and Secondary Education: Special Education Cluster ? Special Education ? Grants to States (84.027) and Special Education ? Preschool Grants (84.173). Criteria: When a sub-recipient of federal awards uses federal money to acquire goods and services expected to cost more than $25,000, the sub-recipient must determine if the vendor is suspended, debarred, or otherwise excluded from doing business with the federal government. Condition: The district purchased goods from four vendors totaling greater than $25,000 that required the District to determine the vendor?s status with the federal government. Six vendors were verified for the child nutrition cluster, however this was not done until June 1, or the eleventh month of the fiscal year. One vendor was required to be verified from the special education cluster but this verification was not done. The vendors were, in fact, not excluded parties. The District needs to strengthen their internal controls in place to make sure all vendors are verified before the disbursements are made. Cause: One person was responsible for checking vendor status. The task was overlooked until near the end of the year for the child nutrition cluster and it was overlooked that there was an applicable vendor for the special education cluster. Effect: Even though the District did comply with the requirements not to purchase goods with excluded parties, failing to check the excluded parties list increases the risk that the District will make payments to ineligible vendors and potentially claim inappropriate reimbursement. Questioned Costs: None. Context: Payments to eligible vendors of the child nutrition cluster totaled $1,585,889. Payments to the eligible vendor of the special education cluster totaled $122,600. Repeat Finding: Yes. Recommendation: We recommend the District verify a vendor?s status by checking the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000 and paid with federal grants. Views of Responsible Officials: The District will verify all vendors? status using the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000.

Federal Program: U.S. Department of Agriculture passed through Missouri Department of Elementary and Secondary Education: Child Nutrition Cluster - School Breakfast Program (10.553) and National School Lunch Program (10.555). Criteria: When a sub-recipient of federal awards uses federal money to acquire goods and services expected to cost more than $25,000, the sub-recipient must determine if the vendor is suspended, debarred, or otherwise excluded from doing business with the federal government. Condition: The district purchased goods from four vendors totaling greater than $25,000 that required the District to determine the vendor?s status with the federal government. Three vendors were verified, however one was not. The vendor was, in fact, not an excluded party. The District needs to strengthen their internal controls in place to make sure all vendors are verified before the disbursements are made. Cause: The District was aware of the requirement to verify a vendor?s status, however one vendor was missed. Effect: The District did comply with the federal compliance requirements. However, internal controls were such that noncompliance could occur and go undetected. Questioned Costs: None. Context: Actual Child Nutrition expenditures are $2,648,236. Repeat Finding: Yes. Recommendation: We recommend the District verify a vendor?s status by checking the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000. Views of Responsible Officials: The District will verify all vendors? status using the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000.

2020-002 Procurement and Suspension and Debarment Federal Program: U.S. Department of Agriculture passed through Missouri Department of Elementary and Secondary Education: Child Nutrition Cluster - School Breakfast Program (10.553) and National School Lunch Program (10.555). U.S. Department of Education passed through Missouri Department of Elementary and Secondary Education: CARES ? Elementary and Secondary School Emergency Relief (ESSER) Fund (84.425D) Criteria: When a sub-recipient of federal awards uses federal money to acquire goods and services expected to cost more than $25,000, the sub-recipient must determine if the vendor is suspended, debarred, or otherwise excluded from doing business with the federal government. Condition: The district purchased goods from seven vendors totaling greater than $25,000 that required the District to determine the vendor?s status with the federal government. The vendors were, in fact, not excluded parties, but the District had no internal control in place to make that determination before the disbursements were made. Cause: The District was unaware of the requirement to verify a vendor?s status. Effect: The District did comply with the federal compliance requirements. However, internal controls were such that noncompliance could occur and go undetected. Questioned Costs: None. Context: Actual Child Nutrition expenditures are $1,601,690. Actual CARES expenditures are $432,712. Repeat Finding: No. Recommendation: We recommend the District verify a vendor?s status by checking the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000. Views of Responsible Officials: The District will verify all vendors? status using the System for Award Management (SAM) maintained by the General Services Administration before making purchases expected to exceed $25,000.

2020-003 Free and Reduced Lunch Applications Federal Program: U.S. Department of Agriculture passed through Missouri Department of Elementary and Secondary Education: Child Nutrition Cluster ? School Breakfast Program (10.553) and National School Lunch Program (10.555). Criteria: By December 15 of each school year, the school must verify the current free and reduced-price eligibility of households selected from a sample of applications that it has approved for free and reduced price. The District was required to use the Standard Sample Size, which requires the lesser of 3 percent or 3,000 of the approved applications on file as of October 1, selected from error-prone applications to be sampled. Condition: Error-prone applications were not always chosen first for verification. Out of the 15 error-prone applications required to be tested, 7 applications were not error-prone. Cause The District relied on the student software they purchased to select the error-prone applications. However, not all applications chosen were error prone. Effect: The District could provide benefits to ineligible children. Questioned Costs: None. Context: Actual Child Nutrition expenditures are $1,601,690. Repeat Finding: No. Recommendation: We recommend the District ensure the applications selected by the software are error-prone applications when doing the verification summary report. Views of Responsible Officials: The District will not rely solely on the automated selection process. We will implement a manual review step in order to verify applications chosen for testing are error-prone applications.