Portland Community College

2025-001 U.S. Department of Agriculture Child Nutrition Cluster Federal Financial Assistance Listing #10.555 National School Lunch Program Federal Financial Assistance Listing #10.553 School Breakfast Program Eligibility Material Weakness in Internal Control Over Compliance Retention of Direct Certification Documentation Criteria: Proper controls over eligibility include the retention of Direct Certification documentation for all students eligible for the program within the student file. Condition: The Region Schools do not have an internal control system designed to retain the appropriate documentation related to direct certification from the State of Iowa (State). Cause: Each school location was not aware that documentation of direct certification needed to be maintained after the school year. Effect: Region Schools will not have documentation on hand to review by State or outside auditors to determine students were eligible for the program. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 75 participants out of 784 participants were selected for eligibility testing. Repeat Finding from Prior Years: No Recommendation: We recommend management retain all Direct Certification information within the file for the students eligible to participate in the program. Views of Responsible Officials: Management agrees with the finding.

2025-002 U.S. Department of Agriculture Child Nutrition Cluster Federal Financial Assistance Listing #10.555 National School Lunch Program Federal Financial Assistance Listing #10.553 School Breakfast Program Eligibility Material Weakness in Internal Control Over Compliance Retention of Review of Student Eligibility Criteria: Proper controls over eligibility include the retention of the review of Direct Certification or other income thresholds within the student file to verify review control has occurred prior to students being added to program. Condition: The Region Schools do not have an internal control system designed to retain the appropriate review documentation within the student file. Cause: The Region Schools were not aware documentation needed to be maintained. The review of eligibility was completed but no documentation was maintained. Effect: Students might be added to program that are not eligible for the program. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 75 participants out of 784 participants were selected for eligibility testing. Repeat Finding from Prior Years: No Recommendation: We recommend a checklist or other documentation be maintained to demonstrate review has been completed prior to students being added to the program as eligible for free or reduced meals. Views of Responsible Officials: Management agrees with the finding.

2025-003 U.S. Department of Agriculture Child Nutrition Cluster Federal Financial Assistance Listing #10.555 National School Lunch Program Federal Financial Assistance Listing #10.553 School Breakfast Program Reporting and Special Test and Provisions Material Weakness in Internal Control Over Compliance Retention of Review of the Monthly Meal Reporting Criteria: Proper controls over reporting include the retention of the review of monthly reporting to the State of Iowa for meals under the National School Lunch Program and School Breakfast Program. Condition: The Region Schools do not have an internal control system designed to retain the appropriate review documentation for each meal count reported to the State of Iowa. Cause: Each school location in the Region Schools does not have a set review process in place that someone is reviewing the reports separately from the person preparing the reports. Effect: Submissions to the State of Iowa can have errors that would not be noticed. Questioned Costs: None reported. Context/Sampling: A nonstatistical sample of 20 reports out of 60 reports were selected for reporting testing. Repeat Finding from Prior Years: No Recommendation: We recommend a documented review process be added at each location completed prior to submission of the reports to the State of Iowa. Views of Responsible Officials: Management agrees with the finding.

Department of Agriculture, Passed through Minnesota Department of Education Federal Financial Assistance Listing 10.553/10.555/10.559/10.582 Child Nutrition Cluster Activities Allowed or Unallowed; Allowable Costs and Cost Principles Material Weakness in Internal Control Over Compliance and Immaterial Instance of Noncompliance Criteria – A good system of internal accounting control contemplates an adequate system for ensuring documentation of expenditures, including payroll transactions, is reviewed and maintained. Condition – During the course of our engagement, we noted 6 instances where employees were paid for incorrect hours and one instance of an employee paid the incorrect hourly rate. Cause – The District does not have an internal control system designed to review and maintain documentation for expenditures, including payroll transactions. Effect – This deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Questioned Costs - None reported Context/Sampling – A non-statistical sample of 60 transaction out of a population greater than 250 total transaction were selected for testing, which accounted for $69,222 of $562,006 expended in program of federal program expenditures. Repeat Finding from Prior Year(s) - Yes Recommendation – A thorough review and reconciliation of supporting documentation for expenditures, including payroll transactions, should be performed before amounts are disbursed. Supporting documentation should be maintained once review is documented and performed. Views of Responsible Officials – There is no disagreement with the audit finding.

U.S. Department of the Treasury Passed through the Nevada Housing Division, City of Reno COVID‐19: Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing #21.027 Procurement, Suspension and Debarment Significant Deficiency in Internal Control Over Compliance Grant Award Number: SLFRP0309, SLFRP2634. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires contracts contain the applicable provisions described in Appendix II to Part 200 for contracts under federal awards. Non-Federal entities are prohibited from contracting with parties that are suspended or debarred under covered transactions. Condition: Certain applicable provisions described in Appendix II to Part 200 were not included in contracts as required. Procedures were not followed to verify if an entity was suspended or debarred before entering into a covered transaction. Cause: The Foundation did not have adequate internal controls to ensure contracts under federal awards contained all of the applicable provisions or to ensure procedures were followed to verify an entity was not suspended or debarred prior to entering into a covered transaction. Effect: Contractors may not be aware of required terms and conditions. A covered transaction may be entered into with an entity that is suspended or debarred. Questioned Costs: None noted. Context/sampling: A nonstatistical sample of 15 procurement transactions out of a population of 98 was selected for testing, including two contracts totaling $3,500,000 subject to Appendix II to Part 200. Two vendor contracts selected did not contain the applicable provisions required by Appendix II to Part 200 and were missing procedures to verify the vendor was not suspended or debarred. Report Finding from Prior Year: Yes , 2023-003 Recommendation: We recommend the Foundation enhance internal controls to ensure all contracts under federal awards contain the applicable contract provisions and to ensure procedures are followed to verify an entity was not suspended or debarred prior to entering into a covered transaction. Views of Responsible Officials: The Foundation agrees with this finding; see corrective action plan.

U.S. Department of the Treasury Passed Through the Nevada Housing Division, City of Reno COVID‐19: Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing #21.027 Reporting Significant Deficiency in Internal Control Over Compliance Grant Award Number: SLFRP0309, SLFRP2634. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) section 200.303 provides that non-federal entities must establish and maintain effective internal control that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: There was no evidence of review and approval (segregation of duties) between the preparer and reviewer of the quarterly financial reports and inaccurate information was reported to the federal awarding agency. Cause: The Foundation did not have internal controls to ensure proper review and approval (segregation of duties) between the preparer and reviewer of the quarterly financial reports. Effect: Inaccurate information could be reported to the federal awarding agency. Questioned Costs: None noted. Context/sampling: Two quarterly financial reports out of a population of four was selected for testing. Report Finding from Prior Year: Yes, 2023-004 Recommendation: We recommend the Foundation enhance the internal controls to ensure quarterly financial reports are reviewed and approved and accurate information is included in the reports. Views of Responsible Officials: The Foundation agrees with this finding; see corrective action plan.

2024-005 Department of Agriculture, Passed through Minnesota Department of Education Federal Financial Assistance Listing 10.553/10.555/10.559/10.582 Child Nutrition Cluster Activities Allowed or Unallowed; Allowable Costs and Cost Principles Material Weakness in Internal Control Over Compliance Criteria – A good system of internal accounting control contemplates an adequate system for ensuring documentation of expenditures, including payroll transactions, is reviewed and maintained. Condition – During the course of our engagement, we noted instances where employees were paid for incorrect hours. Cause – The District does not have an internal control system designed to review and maintain documentation for expenditures, including payroll transactions. Effect – The deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Questioned Costs – None reported. Context/Sampling – A non-statistical sample of 40 transaction out of a population greater than 250 total transaction were selected for testing, which accounted for $111,047 of $621,417 expended in program of federal program expenditures. Repeat Finding from Prior Year(s) – No Recommendation – A thorough review and reconciliation of supporting documentation for expenditures, including payroll transactions, should be performed before amounts are disbursed. Supporting documentation should be maintained once review is documented and performed. View of Responsible Officials – There are no disagreements with this finding.

U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 U.S. Department of Education Research and Development Cluster: Federal Assistance Listing # 84.215J, Innovative Approaches to Literacy; Promise Neighborhoods; and Full-Service Community Schools Preparation of Consolidated Schedule of Expenditures of Federal Awards Material Weakness in Internal Control over Compliance Criteria: Proper controls over financial reporting include the ability to prepare the consolidated schedule of expenditures of federal awards (consolidated schedule) and accompanying notes to the consolidated schedule. Condition: The Organization has a process for preparing and reviewing the consolidated schedule; however, the controls did not prevent material adjustments to the consolidated schedule. Cause: The Organization has a process for preparing the consolidated schedule; however, the controls did not operate as designed. Effect: The condition may affect the Organization’s ability to record, process, summarize, and report federal expenditure information consistent with the assertions of management in the consolidated financial statements on a timely basis. Recommendation: A thorough review of the Schedule of Expenditures of Federal Awards should take place prior to the beginning of the audit to ensure that generally accepted accounting principles have been followed, proper cut-off of transactions has occurred, and there are no adjustments to be made to the Schedule of Expenditures of Federal Awards. Views of Responsible Officials: Management agrees with this finding.

Department of Treasury Federal Financial Assistance Listing 21.033, Award 22ERP060843 Community Development Financial Institutions Equitable Recovery Program (CDFI ERP) Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: In our testing of procurement, suspension, and debarment, it was identified that there was no observable documentation to directly indicate that a search for suspension and debarment was performed on vendors prior to entering into contracts. Cause: Meda has designed internal controls over these areas; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering the contact could result in possibly noncompliance. Questioned Costs: None reported. Context: Two vendors, accounting for $149,320 of expenses were selected for testing out of a total of two vendors. Repeat Finding from Prior Years: No Recommendation: We recommend that management maintain adequate supporting documentation and records to document history and methods of the procedures performed to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with the finding.

U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting Material Weakness in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: There was no formal documentation of review and approval of seven invoices selected for testing. There was no formal documentation of review and approval for 31 meal count sheets selected for testing. There was no formal documentation of review and approval prior to submission for ten reimbursement requests selected for testing. Cause: The Organization has designated internal controls over these areas; however, documentation was not maintained to support the performance of the controls. Effect: Failure to perform an independent review of expenses and reporting could result in a reasonable possibility that the Organization would not detect errors in the normal course of performing duties and correct them in a timely manner. Questioned Costs: None reported. Context/Sampling: 60 invoices out of 604 total were selected for testing which made up $240,437 of $572,161 federal awards. 60 meal count sheets out of 144 total were selected for testing which made up $168,110 of $572,161 federal awards. 16 requests for reimbursement submissions out of 48 total were selected for testing which made up $63,141 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend the procedures related to activities allowed or unallowed, allowable costs/cost principles, and reporting be reviewed with applicable program employees to ensure the control process is properly followed and documentation is retained to support compliance with program requirements. Views of Responsible Officials: Management agrees with this finding.

U.S. Department of Agriculture Passed through Illinois Department of Education, Minnesota Department of Education, and North Dakota Department of Education Child Nutrition Cluster: School Breakfast Program, 10.553 National School Lunch Program, 10.555 Summer Food Service Program for Children, 10.559 Procurement, Suspension, and Debarment Significant Deficiency in Internal Control over Compliance Grant Award Number: Affects all grant awards under assistance listing 10.553, 10.555, and 10.559 on the Consolidated Schedule of Expenditures of Federal Awards. Criteria: Uniform Guidance and 2 CFR sections 200.318 through 200.326 set forth the procurement standards non-federal entities other than states must follow when operating federal programs and the procurement procedures required depending on the amount of the transaction. Condition: In our testing of procurement, suspension, and debarment, it was identified that the search for suspension and debarment was performed subsequent to entering into covered transactions with three vendors. Cause: The Organization has designated internal controls over this area; however, the controls were not performed timely. Effect: Failure to document the search for suspension and debarment before entering into the covered transaction could result in noncompliance. Questioned Costs: None reported. Context/Sampling: 7 vendors out of 31 vendors total were selected for testing which made up $240,437 of $572,161 federal awards. Repeat Finding from Prior Year: No Recommendation: We recommend that management review vendors for suspension and debarment prior to entering into contracts to ensure vendors are not suspended or debarred. Views of Responsible Officials: Management agrees with this finding.

Federal Financial Assistance Listing 84.425U COVID‐19 Education Stabilization Fund Improper Supporting Documentation; Allowable Costs and Cost Principles Significant Deficiency in Internal Control Over Compliance Criteria – A good system of internal accounting control contemplates an adequate system for ensuring documentation of expenditures, including payroll transactions, is reviewed and maintained. Condition – During the course of our engagement, we noted one instance where employee salaries did not align with their rate of pay noted in their contract. Cause – The District does not have an internal control system designed to review and maintain documentation for expenditures, including payroll transactions. Effect – The deficiency could result in a misstatement to the financial statements that would not be prevented or detected. Questioned Costs ‐ None reported. Context/Sampling – A non‐statistical sample of 40 transaction out of a population greater than 250 total transaction were selected for testing, which accounted for $83,555 of $1,072,373 expended in program of federal program expenditures. Repeat Finding from Prior Year(s) ‐ No Recommendation – A thorough review and reconciliation of supporting documentation for expenditures, including payroll transactions, should be performed before amounts are disbursed. Supporting documentation should be maintained once review is documented and performed. View of Responsible Officials – There are no disagreements with this finding.