Weld County School District RE-8Local Government

Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal recipients and subrecipients must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance the award is in compliance with the Federal Statutes, regulations, and the terms and conditions of the Federal award. Condition: The District's control over maintaining the monthly Eligibility Direct Certification reports for the School Breakfast, National School Lunch, and Summer Food Service Programs was not followed and insufficient documentation was retained. One instance in which annual eligibility determination was incorrect. Questioned Costs: No Context: A sample of 40 applications were selected for testing: • 16 direct certification eligibility determinations were unable to be compared to the State’s direct certify reports. • 1 annual eligibility determination was eligible under the 'Free' meal classification and was incorrectly classified as 'Paid'. Cause: The District did not retain any of the State’s monthly direct certification reports. The District relied on their food service system for determination of eligibility instead of calculating it themselves resulting in an applicant not receiving the benefits they were entitled to. Effect: Lack of documentation retention could result in students receiving benefits they are not entitled to or students not receiving benefits that they are entitled. Repeat Finding: No Recommendation: We recommend the District retain all direct certification reports from the State and for the District to review applications submitted electronically through food service system to determine correct eligibility determination is made. Views of Responsible Officials: There is no disagreement with the audit finding.

Criteria or Specific Requirement: Appendix VII to Part 200 - Indirect costs are normally charged to Federal awards by the use of an indirect cost rate. A separate indirect cost rate is usually necessary for each department or agency of the unit claiming indirect costs under Federal Awards. Condition: Indirect costs were calculated using a rate of 28.58% which exceeded allowable rate of 28.39%. Questioned Costs: $967.88 Context: Comparison of the actual indirect rate calculated by fiscal 2023 expenses compared to the allowed indirect rate. Cause: The District relied on CDE website for calculation of indirect cost rate instead of calculating it themselves resulting in an incorrect rate being applied. Effect: Indirect costs reimbursed were more than allowable rate. Repeat Finding: No Recommendation: We recommend the District review its indirect cost journal entry after verifying all direct journal entries are posted and total indirect costs for the three year grant are within the allowable amount. Views of Responsible Officials: There is no disagreement with the audit finding.

2021-001 ? ELIGIBILITY ALN 10.555, 10.559, 10.579 ? Child Nutrition Cluster Department of Agriculture Passed through Colorado Department of Education Award Number: 4555, 4559 Award Year: 2021 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The District's control over review of applications received for the school lunch program does not adequately document such reviews being performed. Questioned Costs: N/A Context: A sample of 40 applications were selected for testing. Out of the 40 items selected, 31 applications had no evidence of review to ensure such applications were correct. Cause: For online applications the Food Service Secretary was not physically documenting her review. Online applications produce color-coded indicators (red-error; yellow-missing registration, green-match). For all system-approved applications, the Food Service Director verifies student information and then sends a qualification letter to parents. This process was not being documented for the online applications. Effect or Potential Effect: Inadequate documentation of review makes it possible such control is not being performed or not being performed correctly, which could result in students receiving benefits they are not entitled to. Identification as a Repeat Finding: N/A Recommendation: The District should adequately document review of all eligibility applications. This can be in the form of an initial by the person reviewing, a checklist documenting what was reviewed and final conclusions, or other documentation as deemed necessary. Views of Responsible Officials: The District agrees with the finding. Management will take necessary action to update the internal control process surrounding the Child Nutrition cluster along with appropriate training of employees. For additional information, see the District?s separate report for planned corrective action.

2021-002 ? SPECIAL TESTS AND PROVISIONS- VERIFICATION OF FREE AND REDUCED-PRICE APPLICATIONS ALN 10.555, 10.559, 10.579 ? Child Nutrition Cluster Department of Agriculture Passed through Colorado Department of Education Award Number: 4555, 4559 Award Year: 2021 Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 7 CFR 245.6a(c)(4) Alternative Sample Sizes states- If eligible under paragraph (d) of this section for an alternative sample size, the local educational agency may use one of the following alternative sample sizes: (i) Alternative One. The sample size shall equal the lesser of: (A) 3,000 of all applications selected at random from applications approved by the local educational agency as of October 1 of the school year; or (B) Three (3) percent of all applications selected at random from applications approved by the local educational agency as of October 1 of the school year. (ii) Alternative Two. The sample size shall equal the lesser of the sum of: (A) 1,000 of all applications approved by the local educational agency as of October 1 of the school year, selected from error prone applications or (B) One (1) percent of all applications approved by the local educational agency as of October 1 of the school year, selected from error prone applications PLUS (C) The lesser of: (1) 500 applications approved by the local educational agency as of October 1 of the school year that provide a case number in lieu of income information showing participation in an eligible program as defined in paragraph (a)(1) of this section; or (2) One-half (1/2) of one (1) percent of applications approved by the local educational agency as of October 1 of the school year that provide a case number in lieu of income information showing participation in an eligible program as defined in paragraph (a)(1) of this section. Condition: During testing, it was noted the District could not substantiate numbers submitted on its SFA Verification Collection Report for School Year: 2020-2021. The sample selection was not performed in accordance with 7 CFR 245.6a(c)(4). Incorrect students were selected as part of the verification process. Questioned Costs: N/A Context: Source reports for the number of students and applications were not available, which made it difficult to substantiate if the correct data was used for purposes of choosing a sample size. At least four (4) of the students selected should have been from error prone applications. However, none of the students selected were from error prone applications. Furthermore, the sample of five (5) students selected was not selected from the correct universe of students as of a certain date. Instead, all students were selected from student files in a filing cabinet. Cause: The Food Service Secretary was months into the position with no prior training and did not realize the selection should have come from the verification sample pool. In addition, the District used a third-party vendor that is no longer contracted with. The District had no way to contact the vendor to determine what reports were used in preparation of the SFA Verification Collection Report. Effect or Potential Effect: Incorrect students were chosen for verification, and none were selected from error-prone applications as required. The lack of backup support to substantiate how the sample size was determined makes it possible incorrect information was used and the District may have chosen less files than it should have selected for verification. Identification as a Repeat Finding: N/A Recommendation: The District should have personnel involved with the verification of student data attend training to ensure the process is carried out correctly in the future. Supporting documentation should be maintained to support what is reported on the SFA Verification Collection Report. Views of Responsible Officials: The District agrees with the finding. Management will take necessary action to update the internal controls for the verification of student data along with appropriate training of employees. For additional information, see the District?s separate report for planned corrective action.