Unified School District No. 431 Hoisington, Kansas

Education Stabilization Fund – Activities Allowed or Unallowed and Allowable Costs and Cost Principles Criteria or specific requirement Expenditures should only be incurred for the program if they have been deemed to meet program allowability requirements, which includes ensuring that no improper payments are made, that payroll charges are supported by required documentation, and that the cost was necessary and reasonable for the performance of the federal award. Condition 26 employees worked Summer School hours that were funded by Education Stabilization Fund monies, and while it was noted by staff that timesheets were prepared for these hours, they could not be located during audit procedures. Context Auditor tested four of the Summer School transactions that occurred during the year, and while all were found to have been paid at the correct hourly or daily rate, no support could be provided for the number of hours or days that were worked by the employees. Cause Due to turnover within the District, supporting documentation could not be located. Payments made to staff for Summer School wages were calculated based upon planned work hours and scheduled days, and it is unknown whether they were adjusted if the actual hours worked differed from those calculations due to the lacking documentation. Effect Sufficient supporting documentation could not be obtained for all transactions. Recommendation The District should carefully review all charges to the federal award in order to ensure that sufficient supporting documentation has been obtained, that correct payments are being made, and that no unreasonable or unnecessary charges exist. Views of responsible officials and planned corrective actions See Corrective Action Plan.

Child Nutrition Cluster – Activities Allowed or Unallowed and Allowable Costs and Cost Principles and Reporting Criteria or specific requirement Reimbursement for meals served is determined by applying the applicable meals times rates formula, and supporting documentation should be properly saved. Any variances between supporting documents should be investigated and addressed, wherever possible. Condition During testing of the sponsor claim reimbursement reports, it was found that the District submitted inaccurate meal counts on two monthly reports. Context Auditor tested 2 months of meal reimbursement requests submitted to the State. For these months, 183 free lunches and 24 free breakfasts were not submitted for reimbursement, which could not be explained by any supporting documentation. Additionally, 24 paid breakfasts were submitted for reimbursement that could not be corroborated by any supporting documentation. These differences resulted in under reimbursement of $945. Cause Time sensitive reports from the District’s food service software were not saved during the preparation of the reporting. While some variances could be explained by other supporting documentation that was saved at that time, some variances remained. Due to the lack of supporting documentation, auditor was unable to determine whether there was a reasonable explanation for these variances or whether they were caused by human error. Effect Inaccurate meal counts were submitted to the State. Recommendation We recommend that the District review its controls related to monthly reimbursement requests for the Child Nutrition Cluster in order to ensure that accurate meal counts are submitted. Views of responsible officials and planned corrective actions See Corrective Action Plan.

Child Nutrition Cluster – Eligibility Criteria or specific requirement Per 7 CFR 245.6(c), eligibility for free or reduced price meals, as determined through an approved application or by direct certification, must remain in effect for the entire school year and for up to 30 operating days into the subsequent school year. When using a prior year’s application or completion of direct certification, that eligibility status may only be used for up to 30 operating days in the current school year, or until a new eligibility determination is made, whichever comes first. Condition During testing, auditor determined that 24 students had an incorrect eligibility status utilized for a portion of the school year. Context Staff in charge of the food service eligibility determinations did not realize that there were students still utilizing their prior year application or direct certification past the 30 day rollover period. They did not become aware of this until the end of the first semester, at which time, they sent letters to the households requesting that new applications be submitted. If a new application was not received, they were then switched to paid. Of the original sample that the auditor tested, 1 student was found to have utilized their prior year application for eligibility for the entire year. Auditor also analyzed the remaining student population and inquired about any students that had differing eligibility statuses at various points throughout the year. 23 of those students’ changes resulted from the error with the rollover period. Cause The issue was caused by turnover within the District and a lack of sufficient training. Effect Households received benefits that they were not eligible for. For the 24 students, meals were estimated to have been improperly reimbursed in the amount of $2,205. This amount was calculated based upon the number of free or reduced meals that they received, while also considering the reimbursement rate of the correct eligibility status that they were eventually moved to. Recommendation We recommend that the District look for training opportunities for food service staff members to ensure that they have a good understanding of the program’s compliance requirements. Additionally, all students receiving free or reduced price meal benefits should be reviewed to ensure that they have a valid application or direct certification on file. Views of responsible officials and planned corrective actions See Corrective Action Plan.

MATERIAL WEAKNESS 2024-004 Education Stabilization Fund – Reporting Criteria or specific requirement Participants in the Education Stabilization Fund program are required to submit periodic reports to the awarding agency. Condition The quarterly reports had incorrect expenditures reported for the ESSER III award. Context During testing, it was determined that expenditures reported for the ESSER III award were not correctly reported and in line with the reporting method required by the awarding agency. Cause Due to issues related to the timing of program funding draw downs, District staff struggled to report the information on the basis that the awarding agency required of them. Effect An incorrect amount was reported for the ESSER III award on the District’s quarterly reports. Recommendation Reporting methods required by the awarding agency should be well understood, and an individual other than the preparer should review all reports prior to their submission. Views of responsible officials and planned corrective actions See Corrective Action Plan.

SIGNIFICANT DEFICIENCY 2024-005 Education Stabilization Fund – Activities Allowed or Unallowed and Allowable Costs and Cost Principles Criteria or specific requirement Expenditures should only be incurred for the program if they have been deemed to meet program allowability requirements, which includes ensuring that no improper payments are made, that payroll charges are supported by required documentation, and that the cost was necessary and reasonable for the performance of the federal award. Condition Of the 51 transactions tested, 9 were found to not meet elements of allowability. Context For 7 of the transactions, charges to the federal awards for salaries and wages were not accurately based on records that reflected the work performed. This improper payment also resulted in incorrect directly associated costs (payroll taxes) being charged to the federal award. The eighth transaction involved a payroll charge that did not have the required supporting documentation prepared. For the final transaction, an order was placed for numerous items that were all charged to the federal award, but two of those items were found to not meet the allowability standards. Cause Payments made to staff for summer school wages were calculated based upon planned work hours and scheduled days, and they were not adjusted when the actual hours worked differed from those calculations. Additionally, two timesheets were not summed correctly when determining the hours worked for the afterschool program. Lastly, expenditures were not carefully reviewed to ensure that all expenses were allowable and that all necessary supporting documentation had been prepared and kept on file. Effect Total questioned costs amounted to $1,979, and, when compared to the overall population, total likely questioned costs were calculated as $9,029. Recommendation The District should carefully review all charges to the federal award in order to ensure that sufficient supporting documentation has been obtained, that correct payments are being made, and that no unreasonable or unnecessary charges exist. Views of responsible officials and planned corrective actions See Corrective Action Plan.

Child Nutrition Cluster – 10.555 – National School Lunch Program, 10.559 – Summer Food Service Program for Children, 10.553 – School Breakfast Program – Procurement, Suspension, and Debarment Criteria or specific requirement Procurement methods used must adhere to the standards at 2 CFR 200.320, and, per the District’s Child Nutrition Programs Procurement Plan, any purchases over the small purchase threshold require formal procurement methods. Condition One procurement was tested for the Food Service Program, and it was found to not have followed the District’s procurement plan. Context During testing, it was determined that a procurement for the Food Service Program in the amount of $32,609 did not use formal procurement methods. Cause Staff involved with approving the purchase believed that it would fall under the small purchase threshold because, per the quotes that were received, the individual unit price of the models that were being considered were less than that amount. However, multiple units of the selected model were ultimately purchased, which led to the procurement being over the threshold. Effect Small purchase (informal) procurement methods were used; however, formal procurement methods should have been used since the purchase exceeded the small purchase threshold. Recommendation The District should ensure that it follows its procurement policy for all applicable transactions. Views of responsible officials and planned corrective actions See Corrective Action Plan.

Criteria or specific requirement Reimbursement for meals served is determined by applying the applicable meals times rates formula. Proper documentation should be maintained to support any meals served. Condition The District did not maintain adequate record-keeping to support the number of meals served. Context During testing of the Child Nutrition Cluster, it was discovered that, of the two months tested, twelve meal counts did not contain adequate or matching support for the number of meals served. This resulted in total questioned costs of $1,809. Cause Due to record-keeping errors, several meal counts contained conflicting information as to the correct number of meals served. In addition, several meal counts did not show sufficient evidence to support the totals noted. Effect Proper documentation was not maintained, and potentially inaccurate meal counts were submitted to the State and reimbursed. Recommendation We recommend that the District review its controls related to meal counts to ensure that they are properly counted and documented. Views of responsible officials See Corrective Action Plan.