FAC Explorer

Audit 14080

FY End
2023-06-30
Total Expended
$1.20M
Findings
4
Programs
9
Organization: Isd #485 Royalton (MN)
Year: 2023 Accepted: 2024-01-29
Auditor: Brady Martz & Associates PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
10417 2023-002 Material Weakness - N
10418 2023-003 Significant Deficiency - AB
586859 2023-002 Material Weakness - N
586860 2023-003 Significant Deficiency - AB

Programs

ALN Program Spent Major Findings
84.425 Education Stabilization Fund $482,935 Yes 2
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $121,937 - 0
32.009 Emergency Connectivity Fund Program $104,000 - 0
84.010 Title I Grants to Local Educational Agencies $90,125 - 0
10.553 School Breakfast Program $60,561 - 0
10.555 National School Lunch Program $34,863 - 0
84.367 Improving Teacher Quality State Grants $16,478 - 0
84.048 Career and Technical Education -- Basic Grants to States $4,333 - 0
10.649 Pandemic Ebt Administrative Costs $628 - 0

Contacts

Name Title Type
CUG2ZU1JMZC2 Heidi Hagen Auditee
2188210622 Tracee Bruggeman Auditor
No contacts on file

Notes to SEFA

Title: Note 3 Basis of Presentation Accounting Policies: Expenditures reported in the accompanying schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Schedule includes the federal award activity of Independent School District no. 485 under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Independent School District No. 485, it is not intended to be and does not present the financial position or changes in net position of Independent School District No. 485.
Title: Note 4 Commodity Distribution Accounting Policies: Expenditures reported in the accompanying schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Nonmonetary assistance is reported in the schedule at the fair market value of the commodities received and disbursed.
Title: Note 5 Pass-Through Entities Accounting Policies: Expenditures reported in the accompanying schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. All pass-through entities listed on the previous page use the same AL numbers as the federal grantors to identify these grants and have not assigned any additional identifying numbers.
Title: Note 6 Subrecipients Accounting Policies: Expenditures reported in the accompanying schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. During the year ended June 30, 2023, the District did not pass any federal money to subrecipients.

Finding Details

Finding 2023-002
Federal Program: Education Stabilization Fund (AL 84.425U); Special Tests – Wage Rates Requirements Criteria: The Uniform Guidance requires “all laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor.” Furthermore, the Compliance requires the prevailing wage rate clauses be included in the contract or subcontract, and that the contractor or subcontractor submit the required certified payrolls weekly, for each week in which any contract work is performed. Condition: We noted during requesting of information that the District did not enter their HVAC project with a signed contract, which would have contained the correct wage rate verbiage. Furthermore, the District did not obtain the required certified payrolls for the contractor. Questioned Costs: None. Context: The District used ESSER funds to pay for an HVAC project at the district. We noted there was no contract between the vendor and the District so the required wage rate verbiage was omitted. We also noted that the District did not obtain the required certified payrolls. Effect: The District is not in compliance with Uniform Guidance’s wage rate requirements. Cause: The District does not have controls in place to ensure compliance with federal grant requirements. Repeat Finding: No. Recommendation: The District should implement policies and procedures to ensure all construction contracts in excess of $2,000 that are paid with federal funds follows the federal wage rate requirements. Views of Responsible Officials: The District agrees with the recommendation.
Finding 2023-003
Federal Program: Education Stabilization Fund (AL 84.425U) Allowable Activities/Costs Criteria: A system of internal controls requires entities to have controls in place to ensure approval of all transactions. Condition: We noted during testing, the District did not follow their disbursement procedures on 17 out of 18 non-payroll transactions tested. Questioned Costs: None. Context: 23 transactions were selected from a population of 225. The sample is not statistically valid. Effect: There is an increased risk of charging unallowable transactions to the grant. Cause: The District does not have controls in place to ensure all non-payroll transactions are being approved. Repeat Finding: No. Recommendation: The District should follow their cash disbursement procedures. Views of Responsible Officials: The District agrees with the recommendation.
Finding 2023-002
Federal Program: Education Stabilization Fund (AL 84.425U); Special Tests – Wage Rates Requirements Criteria: The Uniform Guidance requires “all laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor.” Furthermore, the Compliance requires the prevailing wage rate clauses be included in the contract or subcontract, and that the contractor or subcontractor submit the required certified payrolls weekly, for each week in which any contract work is performed. Condition: We noted during requesting of information that the District did not enter their HVAC project with a signed contract, which would have contained the correct wage rate verbiage. Furthermore, the District did not obtain the required certified payrolls for the contractor. Questioned Costs: None. Context: The District used ESSER funds to pay for an HVAC project at the district. We noted there was no contract between the vendor and the District so the required wage rate verbiage was omitted. We also noted that the District did not obtain the required certified payrolls. Effect: The District is not in compliance with Uniform Guidance’s wage rate requirements. Cause: The District does not have controls in place to ensure compliance with federal grant requirements. Repeat Finding: No. Recommendation: The District should implement policies and procedures to ensure all construction contracts in excess of $2,000 that are paid with federal funds follows the federal wage rate requirements. Views of Responsible Officials: The District agrees with the recommendation.
Finding 2023-003
Federal Program: Education Stabilization Fund (AL 84.425U) Allowable Activities/Costs Criteria: A system of internal controls requires entities to have controls in place to ensure approval of all transactions. Condition: We noted during testing, the District did not follow their disbursement procedures on 17 out of 18 non-payroll transactions tested. Questioned Costs: None. Context: 23 transactions were selected from a population of 225. The sample is not statistically valid. Effect: There is an increased risk of charging unallowable transactions to the grant. Cause: The District does not have controls in place to ensure all non-payroll transactions are being approved. Repeat Finding: No. Recommendation: The District should follow their cash disbursement procedures. Views of Responsible Officials: The District agrees with the recommendation.