Finding 2024-003: Material Weakness - Internal Control and Compliance Over Special Tests and Provisions
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146 and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326).
Condition/Context: The District did not enter into a contract with the primary contractor for the HVAC construction project paid for with federal assistance funds, nor did the District verify that prevailing wage rate requirements were included in subcontracts. Additionally, the District does not have controls in place to track weekly certified payrolls.
Cause: The District did not have controls in place to ensure federal requirements were met in the process for selecting contractors and monitoring subcontractors. The District also does not have a process in place to track the weekly certified payrolls.
Effect: Federal Funds may be paid to a contractor that does not follow prevailing wage laws.
Questioned Costs: Not determinable.
Recommendation: We recommend the District implement a system for procurement procedures to ensure contacts are obtained and include the required prevailing wage rate requirements. This should also include monitoring all subcontractors to ensure they meet these requirements. We also recommend the District implement a system to track weekly certified payrolls to ensure all payrolls are received.
Views of Responsible Officials: The District is in the process of developing a procurement policy, including prevailing wage rate requirements and will ensure that subcontractors meet the requirements.
Finding 2024-004: Material Weakness - Internal Control over Activities Allowed/Allowable Costs
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Repeat of Prior Year Finding 2023-004
Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in expenditure recording would be identified by the District. This system should include approval of all inputs.
Condition: Approval is not consistently documented on invoices and extended pay wages lacked documented approval. Of the 40 expenditures tested for internal control purposes, 29 lacked adequate documentation of review and approval. The sample was not statistically valid.
Cause: The District did not ensure that the proper reviews and approvals were in place prior to payment.
Context: Of the 40 expenses tested, 10 payroll transactions involving extended pay were found to not have approval over the amounts paid by the District, and 19 invoices were found to not have documented approval. One person handles the majority of the supporting documents, with no outside review. Extended pay rates were approved many years ago, but no documentation of the approved amounts exists. Purchase orders are generally approved with account coding, but this was not done for purchases that fell outside the usual PO process.
Effect: Because of the lack of internal controls, it is less likely that errors or irregularities in the expenditures would be discovered internally. Unallowable costs could be paid for with grant funds.
Questioned Costs: None noted.
Recommendation: An appropriate, knowledgeable employee should review all invoices and timecards prior to payment, including extended time for training session compensation and approval should be documented. We also recommend that employer extended pay rates should be approved annually by the School Board, and documentation of approved rates should be retained.
Views of Responsible Officials: The District acknowledges this finding. Invoices are reviewed by the Administration and Board of Education monthly. Additional reviews by administration will be put into place. The Board of Education shall approve the pay rates annually and appropriate documentation kept.
Finding 2024-005: Significant Deficiency - Internal Control over Reporting
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Repeat of Prior Year Finding 2023-005
Criteria: A system of internal control should be in place and operating effectively to achieve higher reliability that errors or irregularities in reporting would be discovered the District.
Condition/Context: For one of the two claims selected for testing, the report was prepared and certified by the same person. The sample was not statistically valid.
Cause: There is improper segregation of duties surrounding the preparation and submission of claim forms.
Effect: Incorrect amounts could be reported in the claims, potentially resulting in overreported or underreported expenses.
Questioned Costs: None noted.
Recommendation: The District should implement a system in which one person prepares the report and another reviews to ensure it is correct prior to submission. Documentation of review should be maintained.
Views of Responsible Officials: Management agrees with finding 2024-005 and has made efforts to implement recommended procedures. All claims will be reviewed and approved by a third party prior to submission.
Finding 2024-003: Material Weakness - Internal Control and Compliance Over Special Tests and Provisions
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146 and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326).
Condition/Context: The District did not enter into a contract with the primary contractor for the HVAC construction project paid for with federal assistance funds, nor did the District verify that prevailing wage rate requirements were included in subcontracts. Additionally, the District does not have controls in place to track weekly certified payrolls.
Cause: The District did not have controls in place to ensure federal requirements were met in the process for selecting contractors and monitoring subcontractors. The District also does not have a process in place to track the weekly certified payrolls.
Effect: Federal Funds may be paid to a contractor that does not follow prevailing wage laws.
Questioned Costs: Not determinable.
Recommendation: We recommend the District implement a system for procurement procedures to ensure contacts are obtained and include the required prevailing wage rate requirements. This should also include monitoring all subcontractors to ensure they meet these requirements. We also recommend the District implement a system to track weekly certified payrolls to ensure all payrolls are received.
Views of Responsible Officials: The District is in the process of developing a procurement policy, including prevailing wage rate requirements and will ensure that subcontractors meet the requirements.
Finding 2024-004: Material Weakness - Internal Control over Activities Allowed/Allowable Costs
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Repeat of Prior Year Finding 2023-004
Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in expenditure recording would be identified by the District. This system should include approval of all inputs.
Condition: Approval is not consistently documented on invoices and extended pay wages lacked documented approval. Of the 40 expenditures tested for internal control purposes, 29 lacked adequate documentation of review and approval. The sample was not statistically valid.
Cause: The District did not ensure that the proper reviews and approvals were in place prior to payment.
Context: Of the 40 expenses tested, 10 payroll transactions involving extended pay were found to not have approval over the amounts paid by the District, and 19 invoices were found to not have documented approval. One person handles the majority of the supporting documents, with no outside review. Extended pay rates were approved many years ago, but no documentation of the approved amounts exists. Purchase orders are generally approved with account coding, but this was not done for purchases that fell outside the usual PO process.
Effect: Because of the lack of internal controls, it is less likely that errors or irregularities in the expenditures would be discovered internally. Unallowable costs could be paid for with grant funds.
Questioned Costs: None noted.
Recommendation: An appropriate, knowledgeable employee should review all invoices and timecards prior to payment, including extended time for training session compensation and approval should be documented. We also recommend that employer extended pay rates should be approved annually by the School Board, and documentation of approved rates should be retained.
Views of Responsible Officials: The District acknowledges this finding. Invoices are reviewed by the Administration and Board of Education monthly. Additional reviews by administration will be put into place. The Board of Education shall approve the pay rates annually and appropriate documentation kept.
Finding 2024-005: Significant Deficiency - Internal Control over Reporting
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Repeat of Prior Year Finding 2023-005
Criteria: A system of internal control should be in place and operating effectively to achieve higher reliability that errors or irregularities in reporting would be discovered the District.
Condition/Context: For one of the two claims selected for testing, the report was prepared and certified by the same person. The sample was not statistically valid.
Cause: There is improper segregation of duties surrounding the preparation and submission of claim forms.
Effect: Incorrect amounts could be reported in the claims, potentially resulting in overreported or underreported expenses.
Questioned Costs: None noted.
Recommendation: The District should implement a system in which one person prepares the report and another reviews to ensure it is correct prior to submission. Documentation of review should be maintained.
Views of Responsible Officials: Management agrees with finding 2024-005 and has made efforts to implement recommended procedures. All claims will be reviewed and approved by a third party prior to submission.
Finding 2024-006: Significant Deficiency - Internal Control over Reporting
Program: Medicaid Cluster
Assistance Listing Number: 93.778
Pass-Through Agency: Wisconsin Department of Health Services/CESA 10
Repeat of Prior Year Finding 2023-006
Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in reporting would be discovered the District.
Condition/Context: For the two quarterly reports tested, there is no evidence of review or approval by the District. The sample was not statistically valid.
Cause: The District does not have controls in place to review the quarterly financial submissions entered by CESA.
Effect: Inaccurate reporting may cause the District to receive more or less funding than they are entitled to.
Questioned Costs: None noted.
Recommendation: We recommend that the quarterly financial submissions be reviewed by the District, and that any errors identified be corrected by CESA 10. Documentation of these reviews should be maintained.
Views of Responsible Officials: Management agrees with finding 2024-006 and has made efforts to implement recommended procedures. Data will be reviewed prior to submission to CESA 10 and, once CESA has completed their claim, it will be returned to the District for approval.
Finding 2024-003: Material Weakness - Internal Control and Compliance Over Special Tests and Provisions
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146 and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326).
Condition/Context: The District did not enter into a contract with the primary contractor for the HVAC construction project paid for with federal assistance funds, nor did the District verify that prevailing wage rate requirements were included in subcontracts. Additionally, the District does not have controls in place to track weekly certified payrolls.
Cause: The District did not have controls in place to ensure federal requirements were met in the process for selecting contractors and monitoring subcontractors. The District also does not have a process in place to track the weekly certified payrolls.
Effect: Federal Funds may be paid to a contractor that does not follow prevailing wage laws.
Questioned Costs: Not determinable.
Recommendation: We recommend the District implement a system for procurement procedures to ensure contacts are obtained and include the required prevailing wage rate requirements. This should also include monitoring all subcontractors to ensure they meet these requirements. We also recommend the District implement a system to track weekly certified payrolls to ensure all payrolls are received.
Views of Responsible Officials: The District is in the process of developing a procurement policy, including prevailing wage rate requirements and will ensure that subcontractors meet the requirements.
Finding 2024-004: Material Weakness - Internal Control over Activities Allowed/Allowable Costs
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Repeat of Prior Year Finding 2023-004
Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in expenditure recording would be identified by the District. This system should include approval of all inputs.
Condition: Approval is not consistently documented on invoices and extended pay wages lacked documented approval. Of the 40 expenditures tested for internal control purposes, 29 lacked adequate documentation of review and approval. The sample was not statistically valid.
Cause: The District did not ensure that the proper reviews and approvals were in place prior to payment.
Context: Of the 40 expenses tested, 10 payroll transactions involving extended pay were found to not have approval over the amounts paid by the District, and 19 invoices were found to not have documented approval. One person handles the majority of the supporting documents, with no outside review. Extended pay rates were approved many years ago, but no documentation of the approved amounts exists. Purchase orders are generally approved with account coding, but this was not done for purchases that fell outside the usual PO process.
Effect: Because of the lack of internal controls, it is less likely that errors or irregularities in the expenditures would be discovered internally. Unallowable costs could be paid for with grant funds.
Questioned Costs: None noted.
Recommendation: An appropriate, knowledgeable employee should review all invoices and timecards prior to payment, including extended time for training session compensation and approval should be documented. We also recommend that employer extended pay rates should be approved annually by the School Board, and documentation of approved rates should be retained.
Views of Responsible Officials: The District acknowledges this finding. Invoices are reviewed by the Administration and Board of Education monthly. Additional reviews by administration will be put into place. The Board of Education shall approve the pay rates annually and appropriate documentation kept.
Finding 2024-005: Significant Deficiency - Internal Control over Reporting
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Repeat of Prior Year Finding 2023-005
Criteria: A system of internal control should be in place and operating effectively to achieve higher reliability that errors or irregularities in reporting would be discovered the District.
Condition/Context: For one of the two claims selected for testing, the report was prepared and certified by the same person. The sample was not statistically valid.
Cause: There is improper segregation of duties surrounding the preparation and submission of claim forms.
Effect: Incorrect amounts could be reported in the claims, potentially resulting in overreported or underreported expenses.
Questioned Costs: None noted.
Recommendation: The District should implement a system in which one person prepares the report and another reviews to ensure it is correct prior to submission. Documentation of review should be maintained.
Views of Responsible Officials: Management agrees with finding 2024-005 and has made efforts to implement recommended procedures. All claims will be reviewed and approved by a third party prior to submission.
Finding 2024-003: Material Weakness - Internal Control and Compliance Over Special Tests and Provisions
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Criteria: All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC 3141–3144, 3146 and 3147. Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements a provision that the contractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326).
Condition/Context: The District did not enter into a contract with the primary contractor for the HVAC construction project paid for with federal assistance funds, nor did the District verify that prevailing wage rate requirements were included in subcontracts. Additionally, the District does not have controls in place to track weekly certified payrolls.
Cause: The District did not have controls in place to ensure federal requirements were met in the process for selecting contractors and monitoring subcontractors. The District also does not have a process in place to track the weekly certified payrolls.
Effect: Federal Funds may be paid to a contractor that does not follow prevailing wage laws.
Questioned Costs: Not determinable.
Recommendation: We recommend the District implement a system for procurement procedures to ensure contacts are obtained and include the required prevailing wage rate requirements. This should also include monitoring all subcontractors to ensure they meet these requirements. We also recommend the District implement a system to track weekly certified payrolls to ensure all payrolls are received.
Views of Responsible Officials: The District is in the process of developing a procurement policy, including prevailing wage rate requirements and will ensure that subcontractors meet the requirements.
Finding 2024-004: Material Weakness - Internal Control over Activities Allowed/Allowable Costs
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Repeat of Prior Year Finding 2023-004
Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in expenditure recording would be identified by the District. This system should include approval of all inputs.
Condition: Approval is not consistently documented on invoices and extended pay wages lacked documented approval. Of the 40 expenditures tested for internal control purposes, 29 lacked adequate documentation of review and approval. The sample was not statistically valid.
Cause: The District did not ensure that the proper reviews and approvals were in place prior to payment.
Context: Of the 40 expenses tested, 10 payroll transactions involving extended pay were found to not have approval over the amounts paid by the District, and 19 invoices were found to not have documented approval. One person handles the majority of the supporting documents, with no outside review. Extended pay rates were approved many years ago, but no documentation of the approved amounts exists. Purchase orders are generally approved with account coding, but this was not done for purchases that fell outside the usual PO process.
Effect: Because of the lack of internal controls, it is less likely that errors or irregularities in the expenditures would be discovered internally. Unallowable costs could be paid for with grant funds.
Questioned Costs: None noted.
Recommendation: An appropriate, knowledgeable employee should review all invoices and timecards prior to payment, including extended time for training session compensation and approval should be documented. We also recommend that employer extended pay rates should be approved annually by the School Board, and documentation of approved rates should be retained.
Views of Responsible Officials: The District acknowledges this finding. Invoices are reviewed by the Administration and Board of Education monthly. Additional reviews by administration will be put into place. The Board of Education shall approve the pay rates annually and appropriate documentation kept.
Finding 2024-005: Significant Deficiency - Internal Control over Reporting
Program: COVID-19: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Wisconsin Department of Public Instruction
Repeat of Prior Year Finding 2023-005
Criteria: A system of internal control should be in place and operating effectively to achieve higher reliability that errors or irregularities in reporting would be discovered the District.
Condition/Context: For one of the two claims selected for testing, the report was prepared and certified by the same person. The sample was not statistically valid.
Cause: There is improper segregation of duties surrounding the preparation and submission of claim forms.
Effect: Incorrect amounts could be reported in the claims, potentially resulting in overreported or underreported expenses.
Questioned Costs: None noted.
Recommendation: The District should implement a system in which one person prepares the report and another reviews to ensure it is correct prior to submission. Documentation of review should be maintained.
Views of Responsible Officials: Management agrees with finding 2024-005 and has made efforts to implement recommended procedures. All claims will be reviewed and approved by a third party prior to submission.
Finding 2024-006: Significant Deficiency - Internal Control over Reporting
Program: Medicaid Cluster
Assistance Listing Number: 93.778
Pass-Through Agency: Wisconsin Department of Health Services/CESA 10
Repeat of Prior Year Finding 2023-006
Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in reporting would be discovered the District.
Condition/Context: For the two quarterly reports tested, there is no evidence of review or approval by the District. The sample was not statistically valid.
Cause: The District does not have controls in place to review the quarterly financial submissions entered by CESA.
Effect: Inaccurate reporting may cause the District to receive more or less funding than they are entitled to.
Questioned Costs: None noted.
Recommendation: We recommend that the quarterly financial submissions be reviewed by the District, and that any errors identified be corrected by CESA 10. Documentation of these reviews should be maintained.
Views of Responsible Officials: Management agrees with finding 2024-006 and has made efforts to implement recommended procedures. Data will be reviewed prior to submission to CESA 10 and, once CESA has completed their claim, it will be returned to the District for approval.