Audit 307312

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-001 The District did not have adequate internal controls for ensuring compliance with federal wage rate requirements. Assistance Listing Number and Title: 84.425 COVID19 – Education Stabilization Fund Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: COVID 19, 84.425D – 120454 COVID 19, 84.425U – 138194 COVID 19, 84.425U - 137218 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objectives of the Education Stabilization Fund (ESF) program are to prevent, prepare for and respond to the COVID-19 pandemic. In the fiscal year 2023, the District spent a total of $7,418,568 of its ESF awards. This included $108,315 in the Elementary and Secondary School Emergency Relief Fund (ESSER II) subprogram (ALN 84.425D) and $7,310,253 in the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER III) subprogram (ALN 84.425U). Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Under federal wage rate requirements, also known as the Davis-Bacon Act, contractors and subcontractors that work on projects financed with more than $2,000 of federal funds must pay laborers and mechanics wage rates that the U.S. Department of Labor considers being similar to what local workers have been paid for similar projects. For construction contracts subject to these wage rate requirements, the District must include a provision that the contractors and subcontractors comply with those requirements and the Department of Labor’s regulations. This includes a requirement for the contractors and its subcontractors to submit to the District weekly, for each week in which any contract work is performed, certified payroll reports. These reports must include a copy of the payroll and a signed statement of compliance. The District may use a contracted project manager to collect certified payroll reports from contractors and subcontractors, but ultimately, it is the District‘s responsibility to comply with these requirements and maintain documentation demonstrating compliance. Description of Condition During the 2023 fiscal year, the District spent $3,489,891 for payments to one contractor to update the heating ventilation, and air conditioning (HVAC) system and for various improvements and repairs to its facilities. Our audit found the District did not have adequate controls for ensuring compliance with federal wage rate requirements. Specifically, the District did not collect, or ensure the project manager collected, weekly certified payroll reports from the contractor and subcontractors. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The District does not normally use federal funds on public works projects. Although District staff were aware of the requirement to include the federal wage rate requirements in the contracts, they were unaware of the requirement to ensure project managers obtain and review certified payroll reports each week prior to payment. Effect of Condition Without adequate internal controls to ensure it collects all weekly certified payroll reports, the District cannot demonstrate it complied with federal wage rate requirements. The District could be liable for paying any additional wages if the contractor or subcontractors did not pay prevailing wage rates to laborers working on the contract. The District did not collect weekly certified payroll reports for one contractor and its subcontractors. Recommendation We recommend the District establish internal controls to ensure compliance with federal wage rate requirements. This should include implementing an effective monitoring process to collect and review all weekly certified payroll reports from contractor and subcontractors. District’s Response The District made sure the Federal Wage Rate requirements were in the contract as a requirement. The District relied on the contracted Architect to ensure these requirements were followed before the district received the pay application. The District now understands that a designated district program director should receive weekly certified payroll reports to ensure compliance. On the next project that requires Prevailing Wage Rates, the District will make sure to receive weekly certified payroll reports to ensure compliance. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 29 CFR, Section 3.3 – Weekly statement with respect to payment of wages, and Section 3.4 – Submission of weekly statements and the preservation and inspection of weekly payroll records, establishes requirements for contractor or subcontractor submission of weekly certified payroll reports.

2023-001 The District did not have adequate internal controls for ensuring compliance with federal wage rate requirements. Assistance Listing Number and Title: 84.425 COVID19 – Education Stabilization Fund Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: COVID 19, 84.425D – 120454 COVID 19, 84.425U – 138194 COVID 19, 84.425U - 137218 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objectives of the Education Stabilization Fund (ESF) program are to prevent, prepare for and respond to the COVID-19 pandemic. In the fiscal year 2023, the District spent a total of $7,418,568 of its ESF awards. This included $108,315 in the Elementary and Secondary School Emergency Relief Fund (ESSER II) subprogram (ALN 84.425D) and $7,310,253 in the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER III) subprogram (ALN 84.425U). Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Under federal wage rate requirements, also known as the Davis-Bacon Act, contractors and subcontractors that work on projects financed with more than $2,000 of federal funds must pay laborers and mechanics wage rates that the U.S. Department of Labor considers being similar to what local workers have been paid for similar projects. For construction contracts subject to these wage rate requirements, the District must include a provision that the contractors and subcontractors comply with those requirements and the Department of Labor’s regulations. This includes a requirement for the contractors and its subcontractors to submit to the District weekly, for each week in which any contract work is performed, certified payroll reports. These reports must include a copy of the payroll and a signed statement of compliance. The District may use a contracted project manager to collect certified payroll reports from contractors and subcontractors, but ultimately, it is the District‘s responsibility to comply with these requirements and maintain documentation demonstrating compliance. Description of Condition During the 2023 fiscal year, the District spent $3,489,891 for payments to one contractor to update the heating ventilation, and air conditioning (HVAC) system and for various improvements and repairs to its facilities. Our audit found the District did not have adequate controls for ensuring compliance with federal wage rate requirements. Specifically, the District did not collect, or ensure the project manager collected, weekly certified payroll reports from the contractor and subcontractors. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The District does not normally use federal funds on public works projects. Although District staff were aware of the requirement to include the federal wage rate requirements in the contracts, they were unaware of the requirement to ensure project managers obtain and review certified payroll reports each week prior to payment. Effect of Condition Without adequate internal controls to ensure it collects all weekly certified payroll reports, the District cannot demonstrate it complied with federal wage rate requirements. The District could be liable for paying any additional wages if the contractor or subcontractors did not pay prevailing wage rates to laborers working on the contract. The District did not collect weekly certified payroll reports for one contractor and its subcontractors. Recommendation We recommend the District establish internal controls to ensure compliance with federal wage rate requirements. This should include implementing an effective monitoring process to collect and review all weekly certified payroll reports from contractor and subcontractors. District’s Response The District made sure the Federal Wage Rate requirements were in the contract as a requirement. The District relied on the contracted Architect to ensure these requirements were followed before the district received the pay application. The District now understands that a designated district program director should receive weekly certified payroll reports to ensure compliance. On the next project that requires Prevailing Wage Rates, the District will make sure to receive weekly certified payroll reports to ensure compliance. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 29 CFR, Section 3.3 – Weekly statement with respect to payment of wages, and Section 3.4 – Submission of weekly statements and the preservation and inspection of weekly payroll records, establishes requirements for contractor or subcontractor submission of weekly certified payroll reports.

2023-001 The District did not have adequate internal controls for ensuring compliance with federal wage rate requirements. Assistance Listing Number and Title: 84.425 COVID19 – Education Stabilization Fund Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: COVID 19, 84.425D – 120454 COVID 19, 84.425U – 138194 COVID 19, 84.425U - 137218 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objectives of the Education Stabilization Fund (ESF) program are to prevent, prepare for and respond to the COVID-19 pandemic. In the fiscal year 2023, the District spent a total of $7,418,568 of its ESF awards. This included $108,315 in the Elementary and Secondary School Emergency Relief Fund (ESSER II) subprogram (ALN 84.425D) and $7,310,253 in the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER III) subprogram (ALN 84.425U). Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Under federal wage rate requirements, also known as the Davis-Bacon Act, contractors and subcontractors that work on projects financed with more than $2,000 of federal funds must pay laborers and mechanics wage rates that the U.S. Department of Labor considers being similar to what local workers have been paid for similar projects. For construction contracts subject to these wage rate requirements, the District must include a provision that the contractors and subcontractors comply with those requirements and the Department of Labor’s regulations. This includes a requirement for the contractors and its subcontractors to submit to the District weekly, for each week in which any contract work is performed, certified payroll reports. These reports must include a copy of the payroll and a signed statement of compliance. The District may use a contracted project manager to collect certified payroll reports from contractors and subcontractors, but ultimately, it is the District‘s responsibility to comply with these requirements and maintain documentation demonstrating compliance. Description of Condition During the 2023 fiscal year, the District spent $3,489,891 for payments to one contractor to update the heating ventilation, and air conditioning (HVAC) system and for various improvements and repairs to its facilities. Our audit found the District did not have adequate controls for ensuring compliance with federal wage rate requirements. Specifically, the District did not collect, or ensure the project manager collected, weekly certified payroll reports from the contractor and subcontractors. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The District does not normally use federal funds on public works projects. Although District staff were aware of the requirement to include the federal wage rate requirements in the contracts, they were unaware of the requirement to ensure project managers obtain and review certified payroll reports each week prior to payment. Effect of Condition Without adequate internal controls to ensure it collects all weekly certified payroll reports, the District cannot demonstrate it complied with federal wage rate requirements. The District could be liable for paying any additional wages if the contractor or subcontractors did not pay prevailing wage rates to laborers working on the contract. The District did not collect weekly certified payroll reports for one contractor and its subcontractors. Recommendation We recommend the District establish internal controls to ensure compliance with federal wage rate requirements. This should include implementing an effective monitoring process to collect and review all weekly certified payroll reports from contractor and subcontractors. District’s Response The District made sure the Federal Wage Rate requirements were in the contract as a requirement. The District relied on the contracted Architect to ensure these requirements were followed before the district received the pay application. The District now understands that a designated district program director should receive weekly certified payroll reports to ensure compliance. On the next project that requires Prevailing Wage Rates, the District will make sure to receive weekly certified payroll reports to ensure compliance. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 29 CFR, Section 3.3 – Weekly statement with respect to payment of wages, and Section 3.4 – Submission of weekly statements and the preservation and inspection of weekly payroll records, establishes requirements for contractor or subcontractor submission of weekly certified payroll reports.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-002 The District’s internal controls were inadequate for ensuring compliance with federal procurement and suspension and debarment requirements. Assistance Listing Number and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program 10.559 – Summer Food Service Program for Children 10.582 – Fresh Fruit and Vegetable Program Federal Grantor Name: U.S. Department of Agriculture Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: N/A Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the School Breakfast, National School Lunch, Summer Food Service, and Fresh Fruit and Vegetable programs. The District received a total of $5,050,955 for these programs for the 2022–2023 school year. These programs provide funding for free and reduced-price meals for students of low-income families. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding grant requirements and monitoring the effectiveness of established controls. When using federal funds to purchase goods or services, governments must apply the more restrictive of federal requirements, state law or local policies by obtaining quotes or following a competitive bidding process, depending on the cost of the purchase. Additionally, state and federal regulations allow local entities to bypass normal procurement laws through a process referred to as “piggybacking.” This process allows entities to purchase goods and services using contracts awarded by another government or group of governments via an interlocal agreement. To comply with piggybacking requirements under state law, the entity must enter into this interlocal agreement before it purchases services or goods from the other entity’s bid contract. If the District uses such an agreement, federal regulations require it to confirm that the procurement methods the awarding agency followed met its own statutory procurement laws and followed regulations applicable to the District when selecting the contractor. Additionally, for the piggybacking transaction to be valid, the District must purchase goods or services from the contractor that the original entity awarded the contract to through its own procurement process. Federal requirements also prohibit grant recipients from contracting with or purchasing from contractors suspended or debarred from doing business with the federal government. Whenever the District enters into contracts for goods or services that it expects to equal or exceed $25,000, paid all or in part with federal funds, it must verify that contractors have not been suspended, debarred or otherwise excluded. The District may verify this by collecting a written certification from the contractor or including a clause or condition in the contract that states the contractor is not suspended or debarred. Alternatively, the District may review the U.S. General Services Administration’s federal Excluded Parties List System (EPLS). The District must meet this requirement before entering into the contract, and must maintain documentation to demonstrate compliance. Description of Condition Procurement Our audit found District’s internal controls were inadequate for ensuring it complied with federal procurement requirements for two contractors participating in federal programs. The District paid $1,261,211 in program funds to one contractor it piggybacked through a purchasing cooperative. The District had an interlocal agreement allowing this arrangement, but did not have documentation available to confirm that it ensured the procurement methods the awarding agency followed met its own statutory requirements before purchasing. Additionally, the District did not have a process to ensure it only purchased products awarded through the awarding entities’ contracts. The District also paid $722,265 in program funds to one contractor for produce products. The District was able to provide evidence of formal competitive process by way of a notice of publication. However, the District did not have documentation available to confirm it followed the competitive bid process and selected the lowest qualified bidder. Suspension and Debarment Our audit found District’s internal controls were inadequate for ensuring it verified that four contractors were not suspended or debarred from participating in federal programs. We consider these deficiencies in internal controls to be material weaknesses that led to material noncompliance. Cause of Condition The District experienced turnover among key staff responsible for procuring food products through these contracts, and the District was unable to locate files for review. Effect of Condition Procurement Without competitively procuring the services, the District cannot demonstrate it received the best price for the services it purchased or selected the most qualified contractors. Additionally, the District cannot demonstrate that it complied with federal regulations. We determined the purchases are allowable under the federal program; therefore, we are not questioning costs. Suspension and Debarment The District did not have documentation to prove that it obtained written certifications, inserted clauses into the contracts or checked the EPLS to verify four out of four contractors were not suspended or debarred before contracting with or purchasing from them. The District paid these contractors $2,269,915 during fiscal year 2023. Without adequate internal controls, the District cannot ensure the contractors it paid with federal funds are eligible to participate in federal programs. Any program funds that the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. We are not questioning costs because we subsequently verified that the contractors were not suspended or debarred. Recommendation We recommend the District strengthen internal controls over procuring goods and ensure compliance with federal requirements, as well as retain and maintain records of these processes for audit. Further, we recommend the District strengthen internal controls to ensure that all contractors it pays over $25,000 or more, all or in part with federal funds, are not suspended and debarred from participating in federal programs. Additionally, we recommend the District retain documentation to demonstrate this compliance. District’s Response The District believed they had complied with the suspension and department requirements and followed all of the bid document requirements for the Food Service Program. The District was unable to locate the specific documents related to the Food Service Program bid compliance. A recent leadership change resulted in a gap in knowledge about the previous filing system. The District thoroughly searched the former director's computer and potential filing locations, but unfortunately, didn’t find them. Going forward the Food Service Department will create a dedicated binder for these documents and place the binder in a location easily accessible to both the Director of Food Service and Administrative Assistant. Food Service will also provide copies to the Fiscal Department for their own binder. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 2 CFR Part 200, Uniform Guidance, section 320, Methods of procurement to be followed, establishes requirements for procuring with Federal funds by nonfederal entities. Title 2 CFR Part 180, OMB Guidelines to Agencies on Government wide Debarment and Suspension (Nonprocurement), establishes non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

2023-001 The District did not have adequate internal controls for ensuring compliance with federal wage rate requirements. Assistance Listing Number and Title: 84.425 COVID19 – Education Stabilization Fund Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: COVID 19, 84.425D – 120454 COVID 19, 84.425U – 138194 COVID 19, 84.425U - 137218 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objectives of the Education Stabilization Fund (ESF) program are to prevent, prepare for and respond to the COVID-19 pandemic. In the fiscal year 2023, the District spent a total of $7,418,568 of its ESF awards. This included $108,315 in the Elementary and Secondary School Emergency Relief Fund (ESSER II) subprogram (ALN 84.425D) and $7,310,253 in the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER III) subprogram (ALN 84.425U). Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Under federal wage rate requirements, also known as the Davis-Bacon Act, contractors and subcontractors that work on projects financed with more than $2,000 of federal funds must pay laborers and mechanics wage rates that the U.S. Department of Labor considers being similar to what local workers have been paid for similar projects. For construction contracts subject to these wage rate requirements, the District must include a provision that the contractors and subcontractors comply with those requirements and the Department of Labor’s regulations. This includes a requirement for the contractors and its subcontractors to submit to the District weekly, for each week in which any contract work is performed, certified payroll reports. These reports must include a copy of the payroll and a signed statement of compliance. The District may use a contracted project manager to collect certified payroll reports from contractors and subcontractors, but ultimately, it is the District‘s responsibility to comply with these requirements and maintain documentation demonstrating compliance. Description of Condition During the 2023 fiscal year, the District spent $3,489,891 for payments to one contractor to update the heating ventilation, and air conditioning (HVAC) system and for various improvements and repairs to its facilities. Our audit found the District did not have adequate controls for ensuring compliance with federal wage rate requirements. Specifically, the District did not collect, or ensure the project manager collected, weekly certified payroll reports from the contractor and subcontractors. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The District does not normally use federal funds on public works projects. Although District staff were aware of the requirement to include the federal wage rate requirements in the contracts, they were unaware of the requirement to ensure project managers obtain and review certified payroll reports each week prior to payment. Effect of Condition Without adequate internal controls to ensure it collects all weekly certified payroll reports, the District cannot demonstrate it complied with federal wage rate requirements. The District could be liable for paying any additional wages if the contractor or subcontractors did not pay prevailing wage rates to laborers working on the contract. The District did not collect weekly certified payroll reports for one contractor and its subcontractors. Recommendation We recommend the District establish internal controls to ensure compliance with federal wage rate requirements. This should include implementing an effective monitoring process to collect and review all weekly certified payroll reports from contractor and subcontractors. District’s Response The District made sure the Federal Wage Rate requirements were in the contract as a requirement. The District relied on the contracted Architect to ensure these requirements were followed before the district received the pay application. The District now understands that a designated district program director should receive weekly certified payroll reports to ensure compliance. On the next project that requires Prevailing Wage Rates, the District will make sure to receive weekly certified payroll reports to ensure compliance. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 29 CFR, Section 3.3 – Weekly statement with respect to payment of wages, and Section 3.4 – Submission of weekly statements and the preservation and inspection of weekly payroll records, establishes requirements for contractor or subcontractor submission of weekly certified payroll reports.

2023-001 The District did not have adequate internal controls for ensuring compliance with federal wage rate requirements. Assistance Listing Number and Title: 84.425 COVID19 – Education Stabilization Fund Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: COVID 19, 84.425D – 120454 COVID 19, 84.425U – 138194 COVID 19, 84.425U - 137218 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objectives of the Education Stabilization Fund (ESF) program are to prevent, prepare for and respond to the COVID-19 pandemic. In the fiscal year 2023, the District spent a total of $7,418,568 of its ESF awards. This included $108,315 in the Elementary and Secondary School Emergency Relief Fund (ESSER II) subprogram (ALN 84.425D) and $7,310,253 in the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER III) subprogram (ALN 84.425U). Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Under federal wage rate requirements, also known as the Davis-Bacon Act, contractors and subcontractors that work on projects financed with more than $2,000 of federal funds must pay laborers and mechanics wage rates that the U.S. Department of Labor considers being similar to what local workers have been paid for similar projects. For construction contracts subject to these wage rate requirements, the District must include a provision that the contractors and subcontractors comply with those requirements and the Department of Labor’s regulations. This includes a requirement for the contractors and its subcontractors to submit to the District weekly, for each week in which any contract work is performed, certified payroll reports. These reports must include a copy of the payroll and a signed statement of compliance. The District may use a contracted project manager to collect certified payroll reports from contractors and subcontractors, but ultimately, it is the District‘s responsibility to comply with these requirements and maintain documentation demonstrating compliance. Description of Condition During the 2023 fiscal year, the District spent $3,489,891 for payments to one contractor to update the heating ventilation, and air conditioning (HVAC) system and for various improvements and repairs to its facilities. Our audit found the District did not have adequate controls for ensuring compliance with federal wage rate requirements. Specifically, the District did not collect, or ensure the project manager collected, weekly certified payroll reports from the contractor and subcontractors. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The District does not normally use federal funds on public works projects. Although District staff were aware of the requirement to include the federal wage rate requirements in the contracts, they were unaware of the requirement to ensure project managers obtain and review certified payroll reports each week prior to payment. Effect of Condition Without adequate internal controls to ensure it collects all weekly certified payroll reports, the District cannot demonstrate it complied with federal wage rate requirements. The District could be liable for paying any additional wages if the contractor or subcontractors did not pay prevailing wage rates to laborers working on the contract. The District did not collect weekly certified payroll reports for one contractor and its subcontractors. Recommendation We recommend the District establish internal controls to ensure compliance with federal wage rate requirements. This should include implementing an effective monitoring process to collect and review all weekly certified payroll reports from contractor and subcontractors. District’s Response The District made sure the Federal Wage Rate requirements were in the contract as a requirement. The District relied on the contracted Architect to ensure these requirements were followed before the district received the pay application. The District now understands that a designated district program director should receive weekly certified payroll reports to ensure compliance. On the next project that requires Prevailing Wage Rates, the District will make sure to receive weekly certified payroll reports to ensure compliance. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 29 CFR, Section 3.3 – Weekly statement with respect to payment of wages, and Section 3.4 – Submission of weekly statements and the preservation and inspection of weekly payroll records, establishes requirements for contractor or subcontractor submission of weekly certified payroll reports.

2023-001 The District did not have adequate internal controls for ensuring compliance with federal wage rate requirements. Assistance Listing Number and Title: 84.425 COVID19 – Education Stabilization Fund Federal Grantor Name: U.S. Department of Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: COVID 19, 84.425D – 120454 COVID 19, 84.425U – 138194 COVID 19, 84.425U - 137218 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objectives of the Education Stabilization Fund (ESF) program are to prevent, prepare for and respond to the COVID-19 pandemic. In the fiscal year 2023, the District spent a total of $7,418,568 of its ESF awards. This included $108,315 in the Elementary and Secondary School Emergency Relief Fund (ESSER II) subprogram (ALN 84.425D) and $7,310,253 in the American Rescue Plan Elementary and Secondary School Emergency Relief (ARP ESSER III) subprogram (ALN 84.425U). Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. Under federal wage rate requirements, also known as the Davis-Bacon Act, contractors and subcontractors that work on projects financed with more than $2,000 of federal funds must pay laborers and mechanics wage rates that the U.S. Department of Labor considers being similar to what local workers have been paid for similar projects. For construction contracts subject to these wage rate requirements, the District must include a provision that the contractors and subcontractors comply with those requirements and the Department of Labor’s regulations. This includes a requirement for the contractors and its subcontractors to submit to the District weekly, for each week in which any contract work is performed, certified payroll reports. These reports must include a copy of the payroll and a signed statement of compliance. The District may use a contracted project manager to collect certified payroll reports from contractors and subcontractors, but ultimately, it is the District‘s responsibility to comply with these requirements and maintain documentation demonstrating compliance. Description of Condition During the 2023 fiscal year, the District spent $3,489,891 for payments to one contractor to update the heating ventilation, and air conditioning (HVAC) system and for various improvements and repairs to its facilities. Our audit found the District did not have adequate controls for ensuring compliance with federal wage rate requirements. Specifically, the District did not collect, or ensure the project manager collected, weekly certified payroll reports from the contractor and subcontractors. We consider this internal control deficiency to be a material weakness that led to material noncompliance. Cause of Condition The District does not normally use federal funds on public works projects. Although District staff were aware of the requirement to include the federal wage rate requirements in the contracts, they were unaware of the requirement to ensure project managers obtain and review certified payroll reports each week prior to payment. Effect of Condition Without adequate internal controls to ensure it collects all weekly certified payroll reports, the District cannot demonstrate it complied with federal wage rate requirements. The District could be liable for paying any additional wages if the contractor or subcontractors did not pay prevailing wage rates to laborers working on the contract. The District did not collect weekly certified payroll reports for one contractor and its subcontractors. Recommendation We recommend the District establish internal controls to ensure compliance with federal wage rate requirements. This should include implementing an effective monitoring process to collect and review all weekly certified payroll reports from contractor and subcontractors. District’s Response The District made sure the Federal Wage Rate requirements were in the contract as a requirement. The District relied on the contracted Architect to ensure these requirements were followed before the district received the pay application. The District now understands that a designated district program director should receive weekly certified payroll reports to ensure compliance. On the next project that requires Prevailing Wage Rates, the District will make sure to receive weekly certified payroll reports to ensure compliance. Auditor’s Remarks We appreciate the District’s commitment to resolving the issues identified above. We will follow up on the status of the finding during the next regularly scheduled audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Title 29 CFR, Section 3.3 – Weekly statement with respect to payment of wages, and Section 3.4 – Submission of weekly statements and the preservation and inspection of weekly payroll records, establishes requirements for contractor or subcontractor submission of weekly certified payroll reports.