WISNER PILGER PUBLIC SCHOOLS

Criteria As described in our engagement letter, management is responsible for establishing and maintaining internal controls, including monitoring, and for the fair presentation of the schedule of expenditures of federal awards, in conformity with the cash basis of accounting. Condition The District does not have a system of internal control that would provide management with reasonable assurance that the District?s schedule of expenditures of federal awards and related disclosures are complete and presented in accordance with the cash basis of accounting. As such, management requested us to compile the trial balance from the general ledger and prepare a draft of the schedule of expenditure of federal awards, including the related note disclosures. Cause Management does not prepare the schedule of expenditures of federal awards or track the federal expenditures to ensure all expenditures are included within the proper federal expenditure accounts. There were also several mispostings with the federal grant expenditures. Potential Effect The potential exists that a material misstatement of the schedule of expenditures of federal awards could occur and not be prevented or detected by the District?s internal control. Recommendation We recommend that the District review and approve the proposed auditor adjusting entries and the adequacy of schedule of the expenditures of federal awards disclosures prepared by the auditors, among other procedures as considered necessary by management. The District should also use the correct coding provided by NDE for tracking the federal expenditures.

Criteria Management is responsible for establishing and maintaining internal controls, including monitoring to ensure compliance with the federal expenditure requirements. Condition Upon our arrival for the audit, the District had not obtained all of the documentation to ensure compliance with the federal grant. The school had purchased a new HVAC and within the approved application stated: ?Our school will follow our board policy for procurement which includes working with an architectural firm to design the projects and secure engineering approval. The architectural firm will also work with the school district to create bid documents that adhere to all federal requirements and ensure notification of Davis-Bacon.? In response to the Prevailing Wage Compliance section of the grant the district also stated the following: ?The district will work with an architectural firm to provide the proper notification to bidders regarding all Federal requirements, including Davis-Bacon. However, the District, and specifically, Superintendent Chad Boyer will be responsible for implementation and management of requirements. This communication will happen at weekly meetings to include the contractor and any sub-contractors.? When we asked for the supporting documentation it was noted the District did not hire an architectural firm to assist with the federal award compliance requirements. The District also could not locate a contract with the vendor that installed HVAC. Upon our asking for documentation of ensuring compliance with the Davis Bacon requirements, the District did not have any documentation they could provide. Cause The District did not obtain proper documentation to ensure compliance with the federal award requirements. Potential Effect The potential exists that the federal compliance requirements were not followed. Recommendation We recommend that the District implement procedures to ensure that all award requirements are followed and monitored. Also, the District should hire an architectural firm to assist with federal award compliance when using federal funding for construction projects. When the District hires a contractor for a construction project there should be a contract signed to state the responsibilities of both the contractor and the District to ensure all the federal award requirements are met.