Wyola School District No. 29

Finding 2022 – 003: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the School District is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the School District did not have sufficient controls in place to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the School District’s general ledger. Questioned Costs: None. Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The School District could not produce an accurate and timely SEFA, which required additional effort and resources by the School District and auditor during the audit process. Recommendation: We recommend that the School District becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022-004: Activities Allowed and Unallowed, Allowable Costs (Compliance; Internal Controls Over Compliance) Material Weakness Criteria: Uniform Guidance 2 CFR, Part §200.303(a) requires that non-federal entities must establish and maintain effective internal control over the Federal award 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The School District received and expended section 7007 Construction Impact Aid. According to program specific compliance requirements, the School District must use these funds for construction as defined in Section 7013(3) of the Elementary and Secondary Education Act. Under Section 7013(3), the term "construction" includes (a) preparing drawings and specifications for school facilities; (b) erecting, building, acquiring, altering, remodeling, repairing, or extending school facilities; (c) inspecting and supervising the construction of school facilities; and (d) debt servicing for such activities (sections 7007 and 7013(3) of ESEA (20 USC 7707 and 7713)). Condition: During the review of the School’s internal controls related to Impact Aid expenditures, a sample of 67 transactions was tested for both control effectiveness and compliance. The School did not provide evidence of appropriate approval for any of the transactions selected for control testing. In addition, none of the transactions selected for compliance testing included proper supporting invoice documentation. As a result, alternative audit procedures were performed, including direct confirmations to Dick Anderson Construction and Cushing Terrell. Through these confirmations, expenditures totaling $2,415,667.01 and $313,682.20, respectively, were confirmed. Questioned Costs: Known = $645,081.79 Cause: The School District does not have established internal control policies and procedures to ensure appropriate supporting documentation and approvals are obtained prior to the disbursements being processed. Effect: The School District is not in compliance with Activities Allowed and Unallowed and Allowable Costs compliance requirements for the Impact Aid major program. This could lead to sanctions by the funding agencies. Recommendation: We recommend the School District become familiar with requirements of 2 CFR, Part §200.303(a) and establish appropriate internal control policies and procedures and that all staff be trained on those policies and procedures so they are familiar with the requirements. We further recommend the School District does not process payment for disbursements that do not contain sufficient, appropriate supporting documentation and necessary approvals. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 005: Reporting – Late Data Collection Form Submission Criteria: Uniform Guidance requires an entity expending more than $750,000 of federal funds within a fiscal year to have the data collection form and reporting package submitted within nine months after the end of the audit period. Condition: The School District’s audited financial statements were not submitted to the Federal Audit Clearinghouse by the due date of March 31, 2023. Questioned Costs: None. Cause: A lack of timely general ledger reconciliations contributed to the failure to timely file reports. Effect: The School District is not in compliance with the reporting requirements set forth in the Compliance Supplement which could lead to sanctions by the funding sources. Recommendation: We recommend that the School District implement procedures to ensure submission of the data collection form and reporting package to the federal audit clearinghouse within the nine-month due date. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Criteria or Specific Requirement: Effective internal controls over payroll should be properly designed to provide assurance of meeting compliance requirements and should operate effectively. The District's payroll policies and procedures state that all employees should have an approved wage rate or salary contract. Condition: We noted a control deficiency over the payroll process, specifically with approved contracts. Of the twenty-five employee paycheck samples tested, one employee; representing five transactions, did not have a valid contract with an approved salary and that employee was paid $30,869 in gross wages during the period under audit. Context: We had a discussion with accounting staff and performed a walkthrough over the payroll process. Internal control over payroll testing was performed as a dual test for compliance and internal control effectiveness $411,441 of payroll is paid out of Impact Aid funds for the period under audit out of a total of $1,436,225 in payroll for the same audit period for the entire School. The samples are not a statistically valid sample. Questioned Costs: $30,869 Effect: Without effective internal controls over payroll, the potential for misstatement due to error or fraud occurring and not being detected greatly increases. Cause: Management did not assign priority to implementing effective internal controls over the payroll process. Timesheets have been processed without proper authorization. Repeat: No Auditor's Recommendation: We recommend that the District strengthen its internal control structure by following the policies and procedures to ensure compliance over payroll approval and documentation. The District should provide training to management and staff to further their knowledge on internal controls and compliance requirements. Views of Responsible Officials: The District agrees with the finding.

Criteria or Specific Requirement: Effective Internal controls over expenditures should be properly designed to provide assurance of meeting compliance requirements and should operate effectively. The District's purchasing policies and procedures state, "that all purchases require a purchase requisition approved by a supervisor." Condition: Purchase Requisitions are not being properly filled out before the transaction by the requestor and Purchase Requisitions are not being approved by the superintendent. Context: Purchase Requisitions should be used by a Requestor to request approval for expenditure and the Superintendent must approve the Purchase Order prior to the purchase. Out of forty samples selected, thirty-seven were missing requestor information & three samples were missing approval of the Superintendent. Additionally, the School District has $840 in credit card charges that were not supported by any approval or invoices. This is not a statistically valid sample. Questioned Costs: None Effect: The lack of effective control over expenditure requisition approval could lead to misappropriation of federal funds. Cause: Proper internal controls are circumvented to expedite the claims payment process. Repeat: Yes - Years as Repeat Finding: Three; 2018-012 Auditor's Recommendation: The District should create a Board approved vendor list which do not require a purchase order. Claims should be reviewed for proper invoices prior to approval for payment by the Superintendent and all documentation to support credit card charges should be retained by the District. Views of Responsible Officials: The District agrees with the finding.

Criteria or Specific Requirement: Internal Controls over reporting Impact Aid membership survey count should be properly designed to provide assurance of meeting compliance requirements and should operate effectively. The District is required to comply with the student count on federally connected children on the Impact Aid membership survey date. The federally connected children are listed by federally connected properties associated with he children and their parents. The District is required to identify the federally connected children to be listed in the Impact Aid application membership survey. Condition: We noted a deficiency in the internal controls over reporting membership survey resulting in noncompliance with reporting requirements. We determined that the District has a lack of internal control procedures over the Impact Aid membership survey process. We identified the following noncompliance: The District conducted the Impact Aid membership survey on September 24, 2018 and reported a total of 104 federally connected children in Indian Land Property Claimed on Table 6 for Fiscal Year 2019. We reviewed available attendance records for October 1, 2019 and determined there were 103 federally connected students attending school. The Impact Aid report over reported by one federally connected student. Context: We performed as walkthrough over Impact Aid membership survey procedures. We Inquired with administrative staff and examined student attendance documentation. We compared the membership survey student list to the school attendance records. The school was unable to provide the student attendance records for September 24th, 2018, the Impact Aid Survey Date. This is not a statistically valid sample. Questioned Costs: None Effect: The District over reported the Impact Aid membership survey with federally connected children by 1 federally connected child. The District received more funding then it was entitled to in the amount of $5,618. Cause: The District did not have a review procedure to ensure Impact Aid membership survey report matched the number of students in the Infinity Campus database. Repeat: Yes - Years as Repeat Finding: Two; 2018-014, 2017-015 Auditor's Recommendation: We recommend that the District implement an internal control that includes a review procedure as part of quality control review. The administration should implement a procedure to review the student attendance records to the Impact aid membership survey report to ensure an accurate student count with federally connected children. Views of Responsible Officials: The District agrees with the finding.

Criteria or Specific Requirement: Effective Internal Controls over expenditures should be properly designed to provide assurance of meeting compliance requirements and should operate effectively. The District's purchasing policies and procedures state, "that all purchases require a purchase requisition approved by a supervisor." Condition: Credit Card purchases were not pre-approved and supported. Context: The district has $250 in credit card charges that were not supported by any approval or invoices. Questioned Costs: None Effect: The lack of effective internal controls over expenditure requisition approval could lead to misappropriation of federal funds. Cause: Proper internal controls are circumvented to expedite the claims payment process. Repeat: Yes - Years as Repeat Finding: Two; 2018-015, 2017-016 Auditor's Recommendation: The District should create a credit card claims form whereby the coding and approvals are attached to the claim and copy of the warrant. Further, all claims should be reviewed for proper invoices prior to Board approval of the warrant. Without this step, other internal controls should be implemented to meet these documentation requirements. Views of Responsible Officials: The District agrees with the finding.

Criteria or Specific Requirement: Effective internal controls over payroll should be properly designed to provide assurance of meeting compliance requirements and should operate effectively. The District's payroll policies and procedures state that all Time Cards are required to be approved by a supervisor. Condition: We noted a control deficiency over the payroll process, specifically with approval of timesheets. Of the forty employee paycheck samples tested, three time sheets were not signed by the supervisor. Context: We had a discussion with accounting staff and performed a walkthrough over the payroll process. Internal Control over Payroll Testing was performed as a dual test for Compliance and Internal Control Effectiveness as the majority of payroll is paid out of Impact Aid funds. The samples are not a statistically valid samples. Questioned Costs: None Effect: Without effective internal controls over payroll, the potential for misstatement due to error or fraud occurring and not being detected greatly increases. Cause: Management did not assign priority to implementing effective internal controls over the payroll process. Timesheets have been processed without proper authorization. Repeat: Yes - Years as Repeat Finding: Two; 2018-013, 2017-014 Auditor's Recommendation: We recommend that the District strengthen its internal control structure by following the policies and procedures to ensure compliance over payroll approval and documentation. The District should provide training to management and staff to further their knowledge on internal controls and compliance requirements. Views of Responsible Officials: The District agrees with the finding.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION