St. Croix River Education DistrictLocal Government

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE ? U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER ? CFDA NOS. 84.027 AND 84.173 2020-002 Internal Control Over Compliance With Federal Allowable Costs Requirements Criteria ? 2 CFR ? 200.302 (b)(3) requires the District to maintain records that adequately identify the source and application of funds for federally-funded activities in accordance with 2 CFR 200 Subpart E ? Cost Principals. Condition ? During our audit, we noted that the District did not have sufficient controls to ensure adequate and timely documentation of time and effort reporting to ensure compliance with the U.S. Office of Management and Budget?s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) allowable cost standards. One out of ten employees tested had time and effort documentation to support the costs charged to the special education cluster, however it was not filed timely. Questioned Costs ? None. Our testing did not indicate any instances of noncompliance. Context ? The deficiency in control pertains to major programs tested in the current year. This was not a statically valid sample. Repeat Finding ? This is a current year finding only. Cause ? This was an oversight by district personnel. Effect ? This could be viewed as a violation of the award agreement. Recommendation ? We recommend that the District review its internal control procedures relating to time and effort documentation of allowable costs. View of Responsible Official and Planned Corrective Actions ? The District agrees with the finding. The District will review and update it policies and procedures relating to allowable costs for its federal programs to ensure compliance with the Uniform Guidance in the future. The District has separately issued a Corrective Action Plan related to this finding.

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE INSTANCES OF NONCOMPLIANCE ? U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER ? CFDA NOS. 84.027 AND 84.173 2019-002 Internal Control Over Compliance with Federal Procurement Requirements Criteria ? 2 CFR ? 200.320(b) requires the District to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including procurement requirements applicable to the special education cluster program. Condition ? During our audit, we noted that the District did not have sufficient controls in place within its special education cluster federal program to ensure compliance with federal procurement requirements. For two of a population of two vendors tested, the District had not awarded a contract based on quotations as required by the Uniform Guidance. Questioned Costs ? None noted. Context ? Two of a population of two vendors tested were not in compliance. This was not a statistically valid sample. Repeat Finding ? This is a current year finding. Cause ? This was an oversight by district personnel. Effect ? Noncompliance with the procurement requirements could result in the District expending federal funds with vendors prior to obtaining bids or quotes if required, which could be viewed as a violation of the award agreement. Recommendation ? We recommend that the District review its internal control procedures relating to procurement for all federal programs. The District should verify compliance with federal procurement procedures, including awarding contracts based on sealed bids or quotations for the purchase of goods or services exceeding applicable federal dollar thresholds. View of Responsible Official and Planned Corrective Actions ? The District agrees with the finding. The District intends to review its procedures relating to procurement for its federal programs, and will ensure that bids and/or quotations are obtained when required. The District has separately issued a Corrective Action Plan related to this finding.

SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE ? U.S. DEPARTMENT OF EDUCATION, PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, SPECIAL EDUCATION CLUSTER ? CFDA NOS. 84.027 AND 84.173 2019-003 Internal Control Over Compliance with Federal Suspension and Debarment Requirements Criteria ? 2 CFR ? 180.220 requires the District to establish and maintain effective internal control over compliance with requirements applicable to federal program expenditures, including suspension and debarment requirements applicable to the special education cluster program. Condition ? During our audit, we noted that the District did not have sufficient controls in place within its special education cluster federal program to assure that it was not contracting for goods or services with parties that are suspended or debarred, or whose principals are suspended or debarred from participating in contracts involving the expenditures of federal program funds. Questioned Costs ? None. Our testing did not indicate any instances of noncompliance with these requirements. Context ? The District did not obtain the appropriate documentation for one of one vendors tested to ensure the vendor was not suspended or debarred from participation in federal program contracts. This was not a statistically valid sample. Repeat Finding ? This is a current year finding. Cause ? This was an oversight by district personnel. Effect ? Noncompliance with the suspension and debarment requirements could result in the District expending federal funds with vendors that are not eligible to be parties to such transactions, which could be viewed as a violation of the award agreement. Recommendation ? We recommend that the District review its internal control procedures relating to suspension and debarment for all federal programs. Internal controls over compliance for this area should include verification that any vendor with which the District contracts for goods or services exceeding $25,000 is not listed as suspended or debarred on the federal Excluded Parties List System website. View of Responsible Official and Planned Corrective Actions ? The District agrees with the finding. The District intends to review its procedures relating to suspension and debarment for its federal programs, and will ensure that all parties with which it contracts for goods or services are eligible to participate in contracts involving the expenditures of federal program funding. The District has separately issued a Corrective Action Plan related to this finding.

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