Audit 307755

The District’s internal controls were inadequate for ensuring compliance with federal 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 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: 207WAWA3N1099 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster, which includes the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. These programs provide free or reduced-price meals to students from low-income families. The District received $3,656,339 to administer these programs during the 2022-2023 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Description of Condition Federal requirements prohibit recipients from contracting with parties that are suspended or debarred from doing business with the federal government. Whenever the District contracts for goods and 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 or debarred, other otherwise excluded. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract and it must maintain documentation to demonstrate compliance. Our audit found the District did not have adequate internal controls for verifying contractors have not been suspended or debarred before entering into contracts with or purchasing from them. Specifically, the District did not verify two contractors it paid $25,000 or more during fiscal year 2023 were not suspended or debarred. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District did not anticipate payments to either of these contractors reaching $25,000 and did not monitor total expenditures. As a result, the District did not perform suspension and debarment verification for the 2022-2023 school year. Effect of Condition The District did not obtain written certifications, insert clauses into the contracts, or check SAM.gov to verify two contractors paid $46,195 and $28,543 in part with federal funds were not suspended or debarred before contracting or purchasing. Without adequate internal controls, the District cannot ensure the contractors were eligible to participate in federal programs. Any program funds the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Because we subsequently verified the contractor was not suspended or debarred, we are not questioning costs. Recommendation We recommend that the District strengthen its internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts or purchasing from them. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District has implemented a process to ensure compliance. Purchase orders for Nutrition Services will have an electronic attachment showing a suspension and debarment check from SAM.gov. All purchase orders will be reviewed by the finance department prior to approval. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular 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 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

The District’s internal controls were inadequate for ensuring compliance with federal 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 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: 207WAWA3N1099 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster, which includes the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. These programs provide free or reduced-price meals to students from low-income families. The District received $3,656,339 to administer these programs during the 2022-2023 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Description of Condition Federal requirements prohibit recipients from contracting with parties that are suspended or debarred from doing business with the federal government. Whenever the District contracts for goods and 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 or debarred, other otherwise excluded. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract and it must maintain documentation to demonstrate compliance. Our audit found the District did not have adequate internal controls for verifying contractors have not been suspended or debarred before entering into contracts with or purchasing from them. Specifically, the District did not verify two contractors it paid $25,000 or more during fiscal year 2023 were not suspended or debarred. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District did not anticipate payments to either of these contractors reaching $25,000 and did not monitor total expenditures. As a result, the District did not perform suspension and debarment verification for the 2022-2023 school year. Effect of Condition The District did not obtain written certifications, insert clauses into the contracts, or check SAM.gov to verify two contractors paid $46,195 and $28,543 in part with federal funds were not suspended or debarred before contracting or purchasing. Without adequate internal controls, the District cannot ensure the contractors were eligible to participate in federal programs. Any program funds the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Because we subsequently verified the contractor was not suspended or debarred, we are not questioning costs. Recommendation We recommend that the District strengthen its internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts or purchasing from them. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District has implemented a process to ensure compliance. Purchase orders for Nutrition Services will have an electronic attachment showing a suspension and debarment check from SAM.gov. All purchase orders will be reviewed by the finance department prior to approval. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular 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 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

The District’s internal controls were inadequate for ensuring compliance with federal 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 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: 207WAWA3N1099 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster, which includes the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. These programs provide free or reduced-price meals to students from low-income families. The District received $3,656,339 to administer these programs during the 2022-2023 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Description of Condition Federal requirements prohibit recipients from contracting with parties that are suspended or debarred from doing business with the federal government. Whenever the District contracts for goods and 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 or debarred, other otherwise excluded. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract and it must maintain documentation to demonstrate compliance. Our audit found the District did not have adequate internal controls for verifying contractors have not been suspended or debarred before entering into contracts with or purchasing from them. Specifically, the District did not verify two contractors it paid $25,000 or more during fiscal year 2023 were not suspended or debarred. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District did not anticipate payments to either of these contractors reaching $25,000 and did not monitor total expenditures. As a result, the District did not perform suspension and debarment verification for the 2022-2023 school year. Effect of Condition The District did not obtain written certifications, insert clauses into the contracts, or check SAM.gov to verify two contractors paid $46,195 and $28,543 in part with federal funds were not suspended or debarred before contracting or purchasing. Without adequate internal controls, the District cannot ensure the contractors were eligible to participate in federal programs. Any program funds the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Because we subsequently verified the contractor was not suspended or debarred, we are not questioning costs. Recommendation We recommend that the District strengthen its internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts or purchasing from them. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District has implemented a process to ensure compliance. Purchase orders for Nutrition Services will have an electronic attachment showing a suspension and debarment check from SAM.gov. All purchase orders will be reviewed by the finance department prior to approval. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular 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 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

The District’s internal controls were inadequate for ensuring compliance with federal 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 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: 207WAWA3N1099 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster, which includes the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. These programs provide free or reduced-price meals to students from low-income families. The District received $3,656,339 to administer these programs during the 2022-2023 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Description of Condition Federal requirements prohibit recipients from contracting with parties that are suspended or debarred from doing business with the federal government. Whenever the District contracts for goods and 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 or debarred, other otherwise excluded. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract and it must maintain documentation to demonstrate compliance. Our audit found the District did not have adequate internal controls for verifying contractors have not been suspended or debarred before entering into contracts with or purchasing from them. Specifically, the District did not verify two contractors it paid $25,000 or more during fiscal year 2023 were not suspended or debarred. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District did not anticipate payments to either of these contractors reaching $25,000 and did not monitor total expenditures. As a result, the District did not perform suspension and debarment verification for the 2022-2023 school year. Effect of Condition The District did not obtain written certifications, insert clauses into the contracts, or check SAM.gov to verify two contractors paid $46,195 and $28,543 in part with federal funds were not suspended or debarred before contracting or purchasing. Without adequate internal controls, the District cannot ensure the contractors were eligible to participate in federal programs. Any program funds the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Because we subsequently verified the contractor was not suspended or debarred, we are not questioning costs. Recommendation We recommend that the District strengthen its internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts or purchasing from them. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District has implemented a process to ensure compliance. Purchase orders for Nutrition Services will have an electronic attachment showing a suspension and debarment check from SAM.gov. All purchase orders will be reviewed by the finance department prior to approval. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular 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 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

The District’s internal controls were inadequate for ensuring compliance with priority of service federal requirements. Assistance Listing Number and Title: 84.011 Migrant Education State Grant Program Federal Grantor Name: U.S. Department of Education Office of Elementary and Secondary Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: GT-00241 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objective of the Migrant Education State Grant Program is to support high-quality and comprehensive educational programs for migratory children to help reduce education disruptions and ensure that migratory children receive full and appropriate opportunities to meet the same state student academic content and achievement standards that all students are expected to meet. In fiscal year 2023, the District spent $1,265,311 in federal funding through the Migrant Education State Grant Program. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Federal regulations require the District to define, properly identify and count, “priority for services” migratory children so that priority in the provision of Migrant Education Program (MEP) services is given to those migratory children who made a qualifying move within the previous one-year period; and who are failing, or most at risk of failing, to meet the state’s academic standards, or who have dropped out of school (priority children). Description of Condition Our audit found the District’s internal controls were ineffective for ensuring staff offered or provided services for all priority for services students. The District did not have adequate support for three of 28 students sampled to verify that these students were offered or provided services under the federal program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District experienced turnover in program staff responsible for documenting priority for services information and it did not retain documentation. Additionally, the District did not have Migrant program staff at all school buildings. When the new staff were hired, they were not aware of the requirements to document services provided to students that were identified as priority for services. Effect of Condition Using a statistical sample of students identified as having met the “priority for services” criteria, we found the District did not have supporting documentation showing that the three of 28 students were offered and/or provided services. Without adequate documentation, the District cannot demonstrate it complied with the priority of service requirements Recommendation We recommend the District improve its internal controls to ensure compliance with federal priority of services requirements. This should include retaining documentation supporting its compliance with program requirements. We also recommend the District provide training to staff responsible for program requirements. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District will put controls into place to ensure that all PFS students are receiving services in an adequate and timely manner. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title I, Part C, Section 1304(d) of ESEA (20 USC 6394(d) 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. 20 U.S. Code section 6394(d) Priority for Services.

The District’s internal controls were inadequate for ensuring compliance with federal 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 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: 207WAWA3N1099 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster, which includes the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. These programs provide free or reduced-price meals to students from low-income families. The District received $3,656,339 to administer these programs during the 2022-2023 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Description of Condition Federal requirements prohibit recipients from contracting with parties that are suspended or debarred from doing business with the federal government. Whenever the District contracts for goods and 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 or debarred, other otherwise excluded. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract and it must maintain documentation to demonstrate compliance. Our audit found the District did not have adequate internal controls for verifying contractors have not been suspended or debarred before entering into contracts with or purchasing from them. Specifically, the District did not verify two contractors it paid $25,000 or more during fiscal year 2023 were not suspended or debarred. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District did not anticipate payments to either of these contractors reaching $25,000 and did not monitor total expenditures. As a result, the District did not perform suspension and debarment verification for the 2022-2023 school year. Effect of Condition The District did not obtain written certifications, insert clauses into the contracts, or check SAM.gov to verify two contractors paid $46,195 and $28,543 in part with federal funds were not suspended or debarred before contracting or purchasing. Without adequate internal controls, the District cannot ensure the contractors were eligible to participate in federal programs. Any program funds the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Because we subsequently verified the contractor was not suspended or debarred, we are not questioning costs. Recommendation We recommend that the District strengthen its internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts or purchasing from them. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District has implemented a process to ensure compliance. Purchase orders for Nutrition Services will have an electronic attachment showing a suspension and debarment check from SAM.gov. All purchase orders will be reviewed by the finance department prior to approval. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular 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 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

The District’s internal controls were inadequate for ensuring compliance with federal 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 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: 207WAWA3N1099 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster, which includes the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. These programs provide free or reduced-price meals to students from low-income families. The District received $3,656,339 to administer these programs during the 2022-2023 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Description of Condition Federal requirements prohibit recipients from contracting with parties that are suspended or debarred from doing business with the federal government. Whenever the District contracts for goods and 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 or debarred, other otherwise excluded. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract and it must maintain documentation to demonstrate compliance. Our audit found the District did not have adequate internal controls for verifying contractors have not been suspended or debarred before entering into contracts with or purchasing from them. Specifically, the District did not verify two contractors it paid $25,000 or more during fiscal year 2023 were not suspended or debarred. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District did not anticipate payments to either of these contractors reaching $25,000 and did not monitor total expenditures. As a result, the District did not perform suspension and debarment verification for the 2022-2023 school year. Effect of Condition The District did not obtain written certifications, insert clauses into the contracts, or check SAM.gov to verify two contractors paid $46,195 and $28,543 in part with federal funds were not suspended or debarred before contracting or purchasing. Without adequate internal controls, the District cannot ensure the contractors were eligible to participate in federal programs. Any program funds the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Because we subsequently verified the contractor was not suspended or debarred, we are not questioning costs. Recommendation We recommend that the District strengthen its internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts or purchasing from them. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District has implemented a process to ensure compliance. Purchase orders for Nutrition Services will have an electronic attachment showing a suspension and debarment check from SAM.gov. All purchase orders will be reviewed by the finance department prior to approval. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular 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 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

The District’s internal controls were inadequate for ensuring compliance with federal 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 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: 207WAWA3N1099 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster, which includes the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. These programs provide free or reduced-price meals to students from low-income families. The District received $3,656,339 to administer these programs during the 2022-2023 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Description of Condition Federal requirements prohibit recipients from contracting with parties that are suspended or debarred from doing business with the federal government. Whenever the District contracts for goods and 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 or debarred, other otherwise excluded. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract and it must maintain documentation to demonstrate compliance. Our audit found the District did not have adequate internal controls for verifying contractors have not been suspended or debarred before entering into contracts with or purchasing from them. Specifically, the District did not verify two contractors it paid $25,000 or more during fiscal year 2023 were not suspended or debarred. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District did not anticipate payments to either of these contractors reaching $25,000 and did not monitor total expenditures. As a result, the District did not perform suspension and debarment verification for the 2022-2023 school year. Effect of Condition The District did not obtain written certifications, insert clauses into the contracts, or check SAM.gov to verify two contractors paid $46,195 and $28,543 in part with federal funds were not suspended or debarred before contracting or purchasing. Without adequate internal controls, the District cannot ensure the contractors were eligible to participate in federal programs. Any program funds the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Because we subsequently verified the contractor was not suspended or debarred, we are not questioning costs. Recommendation We recommend that the District strengthen its internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts or purchasing from them. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District has implemented a process to ensure compliance. Purchase orders for Nutrition Services will have an electronic attachment showing a suspension and debarment check from SAM.gov. All purchase orders will be reviewed by the finance department prior to approval. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular 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 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

The District’s internal controls were inadequate for ensuring compliance with federal 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 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: 207WAWA3N1099 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The District participates in the Child Nutrition Cluster, which includes the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. These programs provide free or reduced-price meals to students from low-income families. The District received $3,656,339 to administer these programs during the 2022-2023 school year. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Description of Condition Federal requirements prohibit recipients from contracting with parties that are suspended or debarred from doing business with the federal government. Whenever the District contracts for goods and 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 or debarred, other otherwise excluded. The District may verify this by obtaining a written certification from the contractor, adding a clause or condition into the contract that states the contractor is not suspended or debarred, or checking for exclusion records in the U.S. General Services Administration’s System for Award Management at SAM.gov. The District must verify this before entering into the contract and it must maintain documentation to demonstrate compliance. Our audit found the District did not have adequate internal controls for verifying contractors have not been suspended or debarred before entering into contracts with or purchasing from them. Specifically, the District did not verify two contractors it paid $25,000 or more during fiscal year 2023 were not suspended or debarred. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District did not anticipate payments to either of these contractors reaching $25,000 and did not monitor total expenditures. As a result, the District did not perform suspension and debarment verification for the 2022-2023 school year. Effect of Condition The District did not obtain written certifications, insert clauses into the contracts, or check SAM.gov to verify two contractors paid $46,195 and $28,543 in part with federal funds were not suspended or debarred before contracting or purchasing. Without adequate internal controls, the District cannot ensure the contractors were eligible to participate in federal programs. Any program funds the District used to pay contractors that have been suspended or debarred would be unallowable, and the funding agency could potentially recover them. Because we subsequently verified the contractor was not suspended or debarred, we are not questioning costs. Recommendation We recommend that the District strengthen its internal controls to ensure all contractors it pays $25,000 or more, all or in part with federal funds, are not suspended or debarred from participating in federal programs before entering into contracts or purchasing from them. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District has implemented a process to ensure compliance. Purchase orders for Nutrition Services will have an electronic attachment showing a suspension and debarment check from SAM.gov. All purchase orders will be reviewed by the finance department prior to approval. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular 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 180, OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), establishes nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689.

The District’s internal controls were inadequate for ensuring compliance with priority of service federal requirements. Assistance Listing Number and Title: 84.011 Migrant Education State Grant Program Federal Grantor Name: U.S. Department of Education Office of Elementary and Secondary Education Federal Award/Contract Number: N/A Pass-through Entity Name: Office of Superintendent of Public Instruction Pass-through Award/Contract Number: GT-00241 Known Questioned Cost Amount: $0 Prior Year Audit Finding: N/A Background The objective of the Migrant Education State Grant Program is to support high-quality and comprehensive educational programs for migratory children to help reduce education disruptions and ensure that migratory children receive full and appropriate opportunities to meet the same state student academic content and achievement standards that all students are expected to meet. In fiscal year 2023, the District spent $1,265,311 in federal funding through the Migrant Education State Grant Program. Federal regulations require recipients to establish and maintain internal controls that ensure compliance with program requirements. These controls include understanding the program requirements and monitoring the effectiveness of established controls. Federal regulations require the District to define, properly identify and count, “priority for services” migratory children so that priority in the provision of Migrant Education Program (MEP) services is given to those migratory children who made a qualifying move within the previous one-year period; and who are failing, or most at risk of failing, to meet the state’s academic standards, or who have dropped out of school (priority children). Description of Condition Our audit found the District’s internal controls were ineffective for ensuring staff offered or provided services for all priority for services students. The District did not have adequate support for three of 28 students sampled to verify that these students were offered or provided services under the federal program. We consider this deficiency in internal controls to be a material weakness that led to material noncompliance. Cause of Condition The District experienced turnover in program staff responsible for documenting priority for services information and it did not retain documentation. Additionally, the District did not have Migrant program staff at all school buildings. When the new staff were hired, they were not aware of the requirements to document services provided to students that were identified as priority for services. Effect of Condition Using a statistical sample of students identified as having met the “priority for services” criteria, we found the District did not have supporting documentation showing that the three of 28 students were offered and/or provided services. Without adequate documentation, the District cannot demonstrate it complied with the priority of service requirements Recommendation We recommend the District improve its internal controls to ensure compliance with federal priority of services requirements. This should include retaining documentation supporting its compliance with program requirements. We also recommend the District provide training to staff responsible for program requirements. District’s Response Wenatchee School District agrees with the Office of the State Auditor’s recommendation. The District will put controls into place to ensure that all PFS students are receiving services in an adequate and timely manner. Auditor’s Remarks We appreciate the District’s commitment to resolve this finding and thank the District for its cooperation and assistance during the audit. We will review the corrective action taken during our next regular audit. Applicable Laws and Regulations Title I, Part C, Section 1304(d) of ESEA (20 USC 6394(d) 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. 20 U.S. Code section 6394(d) Priority for Services.