Unified School District No. 417Local Government

Condition: Financial reporting and compliance tasks are often times being performed by one employee. Criteria: Segregation of duties should be in place to strengthen internal control over financial reporting and compliance. Cause: The District has administrative employees performing many tasks with little or no review. Effect: Because many of the financial related and compliance tasks are being performed by one employee, financial reporting errors and noncompliance can occur without the issue being timely detected. Recommendation: We recommend separating duties to the extent possible including the use of purchase requisitions for all purchasing and requiring approval of all journal entries. In addition, all employees assigned with these duties should obtain relevant training.

Condition: Financial reporting and compliance tasks are often times being performed by one employee. Criteria: Segregation of duties should be in place to strengthen internal control over financial reporting and compliance. Cause: The District has administrative employees performing many tasks with little or no review. Effect: Because many of the financial related and compliance tasks are being performed by one employee, financial reporting errors and noncompliance can occur without the issue being timely detected. Recommendation: We recommend separating duties to the extent possible including the use of purchase requisitions for all purchasing and requiring approval of all journal entries. In addition, all employees assigned with these duties should obtain relevant training.

Condition: Financial reporting and compliance tasks are often times being performed by one employee. Criteria: Segregation of duties should be in place to strengthen internal control over financial reporting and compliance. Cause: The District has administrative employees performing many tasks with little or no review. Effect: Because many of the financial related and compliance tasks are being performed by one employee, financial reporting errors and noncompliance can occur without the issue being timely detected. Recommendation: We recommend separating duties to the extent possible including the use of purchase requisitions for all purchasing and requiring approval of all journal entries. In addition, all employees assigned with these duties should obtain relevant training.

Criteria: In accordance with Government Auditing Standards, the District is required to comply with laws and regulations related to the District's operations. The District did not comply with K.S.A. 72-1151 which requires competitive bids for purchases exceeding $20,000. Condition: Purchases were made during the year ended June 30, 2022 that exceeded the $20,000 threshold; however the bid requirements in K.S.A. 72-1151 were not followed. Cause: The Superintendent was solely responsible for approving these purchases and did not follow the prescribed bid procedures. We feel that management override is the cause of the noncompliance, coupled with a lack of oversight by the governing body. Effect: Purchases were made that were not in compliance with the bid requirements in the statutes. Recommendation: The District should follow all applicable statutes, and the governing body should be approving all purchases in advance and ensuring that all required processes are being followed.

Criteria: In accordance with 2 CFR 200 Subpart E 200.403(b), costs allowed under Federal awards must conform to any limitation or exclusions set forth in the Federal award as to types or amount of cost items. The grant application from KDHE specifically states that all transportation equipment must be leased or rented and no capital purchases are allowed. Condition: Included on the District's expense reports submitted to the Kansas Department of Health and Environment for grant reimbursement was a yearly lease payment for two vehicles to be used for grant purposes. However, the District actually purchased both of these vehicles in full prior to reimbursement from the State of Kansas. A portion of the vehicle purchase was charged to the grant and reimbursed for the 2021-2022 year, with the remaining cost to be submitted and reimbursed in future years, and represented as annual lease payments. Cause: The Superintendent was solely responsible for purchasing these vehicles and instructed the Business Manager to report them as leases on the expense reports submitted to KDHE. The Board did not approve the purchase of these vehicles. Effect: Grant reimbursements were received by the District for unallowable costs. Known Questioned Cost: $18,409. This was the amount reported to the State as the first year lease payment and for which the District received reimbursement for the June 30, 2022 fiscal year. Future reimbursements planned by the District are $16,649 each for the June 30, 2023 and June 30, 2024 fiscal years. Recommendation: The District should fully follow grant requirements to ensure only allowable costs are charged to the grant.