Audit 337563

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Regional Office of Education No. 39 did not have adequate record keeping over its equipment acquired from federal funds. The Code of Federal Regulations (2 CFR §200.313(d)(1)) requires that procedures for managing equipment acquired with federal funds must maintain property records that include the following information: (i) a description of the property, (ii) manufacturer’s serial number or other identification number, (iii) source of the funding for the property (including the FAIN), (iv) who holds title, (v) acquisition date (vi) cost of the property, (vii) percentage of federal contribution in the project cost for the Federal award under which the property was acquired, (viii) location (ix) use and condition of the property, and (x) and any ultimate disposition data, including date of disposal and sale price of the property. Moreover, the Code (2 CFR §200.313(d)(2)) requires that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include record keeping and monitoring of equipment acquired from federal funds. CONDITION: The Regional Office of Education No. 39 asset details in the property records include only the description of the property, acquisition date, and cost of the property. The other minimum requirements specified by the Code are not included in the property records. Moreover, the Regional Office of Education No. 39 was unable to properly account for the results of its physical inventory count and only performed partial reconciliation. EFFECT: Inadequate record keeping over equipment acquired from federal funds may result in noncompliance with the Code. Additionally, incomplete reconciliation of physical inventory can lead to discrepancies in financial reporting, affecting overall accountability. CAUSE: Management indicated the issue was due to oversight and lack of training on requirements by the previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 comply with federal regulations by monitoring equipment acquired from federal funds and establish a regular schedule for comprehensive reconciliation of physical inventory to ensure accurate financial reporting and enhance overall accountability. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and is implementing documents and procedures to meet requirements in the future.

CRITERIA/SPECIFIC REQUIREMENT: The Regional Office of Education No. 39 procedure requires the Regional Superintendent or the Program Director to review and approve invoices and requisitions before forwarding to the business office for processing. The Code of Federal Regulations (Code) (2 CFR §200.403(g)) states that costs must be adequately documented in order to be allowable under Federal Awards. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure expenditures under Federal awards are supported, reviewed and approved. CONDITION: The Regional Office of Education No. 39 did not ensure costs or expenditures were adequately documented, reviewed, and approved to ensure allowability under the federal award. CONTEXT: During testing of 60 expenditures totaling $854,868, we noted the following:  Ten (17%) expenditures had invoices or receipts that were not initialed by the Program Director or Regional Superintendent to indicate review and approval of the expenditures; and,  Two (3%) expenditures were not supported with a requisition form. EFFECT: Inadequate controls of expenditures may result in unallowable costs charged to the Federal award. CAUSE: Management indicated that expenditures were not signed by the Regional Superintendent or Program Director due to oversight and the supporting requisition forms were misplaced by previous responsible personnel. RECOMMENDATION: We recommend the Regional Office of Education No. 39 ensures all expenditures are properly supported, reviewed, and approved prior to payment. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and is implementing a new process to ensure all expenditures have documented approval and review.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR § 200.332 (g)) requires the Regional Office of Education No. 39 to verify every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR § 200.501. The Code (2 CFR § 200.332 (e)) requires the Regional Office of Education No. 39 to monitor the activities of the subrecipient to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. The Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over subrecipient monitoring. CONDITION: The Regional Office of Education No. 39 did not have adequate controls over subrecipient monitoring in compliance with the Code. CONTEXT: During our testing of nine subrecipients, we noted the following:  The Regional Office of Education No. 39 did not verify whether subrecipients were required to be audited.  The Regional Office of Education No. 39 did not have written policies and procedures for subrecipient monitoring and could not provide evidence the Regional Office of Education No. 39 monitored its subrecipients during the audit period. EFFECT: Lack of controls over subrecipient monitoring may result in subrecipients not properly administering the federal programs in accordance with federal regulations. CAUSE: Management indicated this was due to oversight and staffing limitations by previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 establish and implement procedures over subrecipient monitoring. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and although some subrecipient monitoring was conducted, it may not have been sufficiently documented. The Regional Office of Education No. 39 is implementing policies and procedures to ensure subrecipient monitoring is not only conducted but documented as well.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (2 CFR §200.512(a)(1)) requires the data collection form and reporting package be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier). Moreover, Office of the Management and Budget announced that it is waiving the 30-day deadline for 2022 submissions. Thus, audits will be considered on time if submitted within nine months after the fiscal period end date. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure the data collection form and related reporting package are timely submitted. Federal oversight agencies use the data collection form and related reporting package as a key tool in monitoring the accountability of federal awards. CONDITION: The Regional Office of Education No. 39 was required to submit its June 30, 2022, data collection form and related reporting package to the Federal Audit Clearinghouse by March 31, 2023; however, it was not submitted until January 3, 2024, resulting in a delay of 278 days. EFFECT: Failure to submit timely the required federal reports, impairs the ability of federal oversight agencies to perform such monitoring on a timely basis. Additionally, this resulted in noncompliance with federal requirements and could also result in the withholding of funding for other eligible projects or activities involving the Regional Office of Education No. 39. CAUSE: Management indicated that the Fiscal Year 2022 Audit packet was finalized late due to delays in preparing the packets for the prior years (2020 and 2021) and was only submitted in January 2024. This timeline issue stemmed from a lack of monitoring in previous years, resulting in audits falling behind. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over timely submission of the data collection form and related reporting package. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and is working with their contracted accounting firm to ensure that the office gets back on schedule with the yearly audit deadlines so that the Federal Audit Clearinghouse may be submitted on schedule as well.

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Regional Office of Education No. 39 did not have adequate record keeping over its equipment acquired from federal funds. The Code of Federal Regulations (2 CFR §200.313(d)(1)) requires that procedures for managing equipment acquired with federal funds must maintain property records that include the following information: (i) a description of the property, (ii) manufacturer’s serial number or other identification number, (iii) source of the funding for the property (including the FAIN), (iv) who holds title, (v) acquisition date (vi) cost of the property, (vii) percentage of federal contribution in the project cost for the Federal award under which the property was acquired, (viii) location (ix) use and condition of the property, and (x) and any ultimate disposition data, including date of disposal and sale price of the property. Moreover, the Code (2 CFR §200.313(d)(2)) requires that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include record keeping and monitoring of equipment acquired from federal funds. CONDITION: The Regional Office of Education No. 39 asset details in the property records include only the description of the property, acquisition date, and cost of the property. The other minimum requirements specified by the Code are not included in the property records. Moreover, the Regional Office of Education No. 39 was unable to properly account for the results of its physical inventory count and only performed partial reconciliation. EFFECT: Inadequate record keeping over equipment acquired from federal funds may result in noncompliance with the Code. Additionally, incomplete reconciliation of physical inventory can lead to discrepancies in financial reporting, affecting overall accountability. CAUSE: Management indicated the issue was due to oversight and lack of training on requirements by the previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 comply with federal regulations by monitoring equipment acquired from federal funds and establish a regular schedule for comprehensive reconciliation of physical inventory to ensure accurate financial reporting and enhance overall accountability. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and is implementing documents and procedures to meet requirements in the future.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR § 200.332 (g)) requires the Regional Office of Education No. 39 to verify every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR § 200.501. The Code (2 CFR § 200.332 (e)) requires the Regional Office of Education No. 39 to monitor the activities of the subrecipient to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. The Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over subrecipient monitoring. CONDITION: The Regional Office of Education No. 39 did not have adequate controls over subrecipient monitoring in compliance with the Code. CONTEXT: During our testing of nine subrecipients, we noted the following:  The Regional Office of Education No. 39 did not verify whether subrecipients were required to be audited.  The Regional Office of Education No. 39 did not have written policies and procedures for subrecipient monitoring and could not provide evidence the Regional Office of Education No. 39 monitored its subrecipients during the audit period. EFFECT: Lack of controls over subrecipient monitoring may result in subrecipients not properly administering the federal programs in accordance with federal regulations. CAUSE: Management indicated this was due to oversight and staffing limitations by previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 establish and implement procedures over subrecipient monitoring. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and although some subrecipient monitoring was conducted, it may not have been sufficiently documented. The Regional Office of Education No. 39 is implementing policies and procedures to ensure subrecipient monitoring is not only conducted but documented as well.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Regional Office of Education No. 39 did not have adequate record keeping over its equipment acquired from federal funds. The Code of Federal Regulations (2 CFR §200.313(d)(1)) requires that procedures for managing equipment acquired with federal funds must maintain property records that include the following information: (i) a description of the property, (ii) manufacturer’s serial number or other identification number, (iii) source of the funding for the property (including the FAIN), (iv) who holds title, (v) acquisition date (vi) cost of the property, (vii) percentage of federal contribution in the project cost for the Federal award under which the property was acquired, (viii) location (ix) use and condition of the property, and (x) and any ultimate disposition data, including date of disposal and sale price of the property. Moreover, the Code (2 CFR §200.313(d)(2)) requires that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include record keeping and monitoring of equipment acquired from federal funds. CONDITION: The Regional Office of Education No. 39 asset details in the property records include only the description of the property, acquisition date, and cost of the property. The other minimum requirements specified by the Code are not included in the property records. Moreover, the Regional Office of Education No. 39 was unable to properly account for the results of its physical inventory count and only performed partial reconciliation. EFFECT: Inadequate record keeping over equipment acquired from federal funds may result in noncompliance with the Code. Additionally, incomplete reconciliation of physical inventory can lead to discrepancies in financial reporting, affecting overall accountability. CAUSE: Management indicated the issue was due to oversight and lack of training on requirements by the previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 comply with federal regulations by monitoring equipment acquired from federal funds and establish a regular schedule for comprehensive reconciliation of physical inventory to ensure accurate financial reporting and enhance overall accountability. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and is implementing documents and procedures to meet requirements in the future.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR § 200.332 (g)) requires the Regional Office of Education No. 39 to verify every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR § 200.501. The Code (2 CFR § 200.332 (e)) requires the Regional Office of Education No. 39 to monitor the activities of the subrecipient to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. The Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over subrecipient monitoring. CONDITION: The Regional Office of Education No. 39 did not have adequate controls over subrecipient monitoring in compliance with the Code. CONTEXT: During our testing of nine subrecipients, we noted the following:  The Regional Office of Education No. 39 did not verify whether subrecipients were required to be audited.  The Regional Office of Education No. 39 did not have written policies and procedures for subrecipient monitoring and could not provide evidence the Regional Office of Education No. 39 monitored its subrecipients during the audit period. EFFECT: Lack of controls over subrecipient monitoring may result in subrecipients not properly administering the federal programs in accordance with federal regulations. CAUSE: Management indicated this was due to oversight and staffing limitations by previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 establish and implement procedures over subrecipient monitoring. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and although some subrecipient monitoring was conducted, it may not have been sufficiently documented. The Regional Office of Education No. 39 is implementing policies and procedures to ensure subrecipient monitoring is not only conducted but documented as well.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (2 CFR §200.512(a)(1)) requires the data collection form and reporting package be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier). Moreover, Office of the Management and Budget announced that it is waiving the 30-day deadline for 2022 submissions. Thus, audits will be considered on time if submitted within nine months after the fiscal period end date. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure the data collection form and related reporting package are timely submitted. Federal oversight agencies use the data collection form and related reporting package as a key tool in monitoring the accountability of federal awards. CONDITION: The Regional Office of Education No. 39 was required to submit its June 30, 2022, data collection form and related reporting package to the Federal Audit Clearinghouse by March 31, 2023; however, it was not submitted until January 3, 2024, resulting in a delay of 278 days. EFFECT: Failure to submit timely the required federal reports, impairs the ability of federal oversight agencies to perform such monitoring on a timely basis. Additionally, this resulted in noncompliance with federal requirements and could also result in the withholding of funding for other eligible projects or activities involving the Regional Office of Education No. 39. CAUSE: Management indicated that the Fiscal Year 2022 Audit packet was finalized late due to delays in preparing the packets for the prior years (2020 and 2021) and was only submitted in January 2024. This timeline issue stemmed from a lack of monitoring in previous years, resulting in audits falling behind. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over timely submission of the data collection form and related reporting package. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and is working with their contracted accounting firm to ensure that the office gets back on schedule with the yearly audit deadlines so that the Federal Audit Clearinghouse may be submitted on schedule as well.

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (2 CFR §200.512(a)(1)) requires the data collection form and reporting package be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier). Moreover, Office of the Management and Budget announced that it is waiving the 30-day deadline for 2022 submissions. Thus, audits will be considered on time if submitted within nine months after the fiscal period end date. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure the data collection form and related reporting package are timely submitted. Federal oversight agencies use the data collection form and related reporting package as a key tool in monitoring the accountability of federal awards. CONDITION: The Regional Office of Education No. 39 was required to submit its June 30, 2022, data collection form and related reporting package to the Federal Audit Clearinghouse by March 31, 2023; however, it was not submitted until January 3, 2024, resulting in a delay of 278 days. EFFECT: Failure to submit timely the required federal reports, impairs the ability of federal oversight agencies to perform such monitoring on a timely basis. Additionally, this resulted in noncompliance with federal requirements and could also result in the withholding of funding for other eligible projects or activities involving the Regional Office of Education No. 39. CAUSE: Management indicated that the Fiscal Year 2022 Audit packet was finalized late due to delays in preparing the packets for the prior years (2020 and 2021) and was only submitted in January 2024. This timeline issue stemmed from a lack of monitoring in previous years, resulting in audits falling behind. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over timely submission of the data collection form and related reporting package. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and is working with their contracted accounting firm to ensure that the office gets back on schedule with the yearly audit deadlines so that the Federal Audit Clearinghouse may be submitted on schedule as well.

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (2 CFR §200.512(a)(1)) requires the data collection form and reporting package be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier). Moreover, Office of the Management and Budget announced that it is waiving the 30-day deadline for 2022 submissions. Thus, audits will be considered on time if submitted within nine months after the fiscal period end date. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure the data collection form and related reporting package are timely submitted. Federal oversight agencies use the data collection form and related reporting package as a key tool in monitoring the accountability of federal awards. CONDITION: The Regional Office of Education No. 39 was required to submit its June 30, 2022, data collection form and related reporting package to the Federal Audit Clearinghouse by March 31, 2023; however, it was not submitted until January 3, 2024, resulting in a delay of 278 days. EFFECT: Failure to submit timely the required federal reports, impairs the ability of federal oversight agencies to perform such monitoring on a timely basis. Additionally, this resulted in noncompliance with federal requirements and could also result in the withholding of funding for other eligible projects or activities involving the Regional Office of Education No. 39. CAUSE: Management indicated that the Fiscal Year 2022 Audit packet was finalized late due to delays in preparing the packets for the prior years (2020 and 2021) and was only submitted in January 2024. This timeline issue stemmed from a lack of monitoring in previous years, resulting in audits falling behind. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over timely submission of the data collection form and related reporting package. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and is working with their contracted accounting firm to ensure that the office gets back on schedule with the yearly audit deadlines so that the Federal Audit Clearinghouse may be submitted on schedule as well.

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Regional Office of Education No. 39 did not have adequate record keeping over its equipment acquired from federal funds. The Code of Federal Regulations (2 CFR §200.313(d)(1)) requires that procedures for managing equipment acquired with federal funds must maintain property records that include the following information: (i) a description of the property, (ii) manufacturer’s serial number or other identification number, (iii) source of the funding for the property (including the FAIN), (iv) who holds title, (v) acquisition date (vi) cost of the property, (vii) percentage of federal contribution in the project cost for the Federal award under which the property was acquired, (viii) location (ix) use and condition of the property, and (x) and any ultimate disposition data, including date of disposal and sale price of the property. Moreover, the Code (2 CFR §200.313(d)(2)) requires that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include record keeping and monitoring of equipment acquired from federal funds. CONDITION: The Regional Office of Education No. 39 asset details in the property records include only the description of the property, acquisition date, and cost of the property. The other minimum requirements specified by the Code are not included in the property records. Moreover, the Regional Office of Education No. 39 was unable to properly account for the results of its physical inventory count and only performed partial reconciliation. EFFECT: Inadequate record keeping over equipment acquired from federal funds may result in noncompliance with the Code. Additionally, incomplete reconciliation of physical inventory can lead to discrepancies in financial reporting, affecting overall accountability. CAUSE: Management indicated the issue was due to oversight and lack of training on requirements by the previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 comply with federal regulations by monitoring equipment acquired from federal funds and establish a regular schedule for comprehensive reconciliation of physical inventory to ensure accurate financial reporting and enhance overall accountability. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and is implementing documents and procedures to meet requirements in the future.

CRITERIA/SPECIFIC REQUIREMENT: The Regional Office of Education No. 39 procedure requires the Regional Superintendent or the Program Director to review and approve invoices and requisitions before forwarding to the business office for processing. The Code of Federal Regulations (Code) (2 CFR §200.403(g)) states that costs must be adequately documented in order to be allowable under Federal Awards. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure expenditures under Federal awards are supported, reviewed and approved. CONDITION: The Regional Office of Education No. 39 did not ensure costs or expenditures were adequately documented, reviewed, and approved to ensure allowability under the federal award. CONTEXT: During testing of 60 expenditures totaling $854,868, we noted the following:  Ten (17%) expenditures had invoices or receipts that were not initialed by the Program Director or Regional Superintendent to indicate review and approval of the expenditures; and,  Two (3%) expenditures were not supported with a requisition form. EFFECT: Inadequate controls of expenditures may result in unallowable costs charged to the Federal award. CAUSE: Management indicated that expenditures were not signed by the Regional Superintendent or Program Director due to oversight and the supporting requisition forms were misplaced by previous responsible personnel. RECOMMENDATION: We recommend the Regional Office of Education No. 39 ensures all expenditures are properly supported, reviewed, and approved prior to payment. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and is implementing a new process to ensure all expenditures have documented approval and review.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR § 200.332 (g)) requires the Regional Office of Education No. 39 to verify every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR § 200.501. The Code (2 CFR § 200.332 (e)) requires the Regional Office of Education No. 39 to monitor the activities of the subrecipient to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. The Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over subrecipient monitoring. CONDITION: The Regional Office of Education No. 39 did not have adequate controls over subrecipient monitoring in compliance with the Code. CONTEXT: During our testing of nine subrecipients, we noted the following:  The Regional Office of Education No. 39 did not verify whether subrecipients were required to be audited.  The Regional Office of Education No. 39 did not have written policies and procedures for subrecipient monitoring and could not provide evidence the Regional Office of Education No. 39 monitored its subrecipients during the audit period. EFFECT: Lack of controls over subrecipient monitoring may result in subrecipients not properly administering the federal programs in accordance with federal regulations. CAUSE: Management indicated this was due to oversight and staffing limitations by previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 establish and implement procedures over subrecipient monitoring. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and although some subrecipient monitoring was conducted, it may not have been sufficiently documented. The Regional Office of Education No. 39 is implementing policies and procedures to ensure subrecipient monitoring is not only conducted but documented as well.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (2 CFR §200.512(a)(1)) requires the data collection form and reporting package be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier). Moreover, Office of the Management and Budget announced that it is waiving the 30-day deadline for 2022 submissions. Thus, audits will be considered on time if submitted within nine months after the fiscal period end date. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure the data collection form and related reporting package are timely submitted. Federal oversight agencies use the data collection form and related reporting package as a key tool in monitoring the accountability of federal awards. CONDITION: The Regional Office of Education No. 39 was required to submit its June 30, 2022, data collection form and related reporting package to the Federal Audit Clearinghouse by March 31, 2023; however, it was not submitted until January 3, 2024, resulting in a delay of 278 days. EFFECT: Failure to submit timely the required federal reports, impairs the ability of federal oversight agencies to perform such monitoring on a timely basis. Additionally, this resulted in noncompliance with federal requirements and could also result in the withholding of funding for other eligible projects or activities involving the Regional Office of Education No. 39. CAUSE: Management indicated that the Fiscal Year 2022 Audit packet was finalized late due to delays in preparing the packets for the prior years (2020 and 2021) and was only submitted in January 2024. This timeline issue stemmed from a lack of monitoring in previous years, resulting in audits falling behind. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over timely submission of the data collection form and related reporting package. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and is working with their contracted accounting firm to ensure that the office gets back on schedule with the yearly audit deadlines so that the Federal Audit Clearinghouse may be submitted on schedule as well.

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Regional Office of Education No. 39 did not have adequate record keeping over its equipment acquired from federal funds. The Code of Federal Regulations (2 CFR §200.313(d)(1)) requires that procedures for managing equipment acquired with federal funds must maintain property records that include the following information: (i) a description of the property, (ii) manufacturer’s serial number or other identification number, (iii) source of the funding for the property (including the FAIN), (iv) who holds title, (v) acquisition date (vi) cost of the property, (vii) percentage of federal contribution in the project cost for the Federal award under which the property was acquired, (viii) location (ix) use and condition of the property, and (x) and any ultimate disposition data, including date of disposal and sale price of the property. Moreover, the Code (2 CFR §200.313(d)(2)) requires that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include record keeping and monitoring of equipment acquired from federal funds. CONDITION: The Regional Office of Education No. 39 asset details in the property records include only the description of the property, acquisition date, and cost of the property. The other minimum requirements specified by the Code are not included in the property records. Moreover, the Regional Office of Education No. 39 was unable to properly account for the results of its physical inventory count and only performed partial reconciliation. EFFECT: Inadequate record keeping over equipment acquired from federal funds may result in noncompliance with the Code. Additionally, incomplete reconciliation of physical inventory can lead to discrepancies in financial reporting, affecting overall accountability. CAUSE: Management indicated the issue was due to oversight and lack of training on requirements by the previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 comply with federal regulations by monitoring equipment acquired from federal funds and establish a regular schedule for comprehensive reconciliation of physical inventory to ensure accurate financial reporting and enhance overall accountability. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and is implementing documents and procedures to meet requirements in the future.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR § 200.332 (g)) requires the Regional Office of Education No. 39 to verify every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR § 200.501. The Code (2 CFR § 200.332 (e)) requires the Regional Office of Education No. 39 to monitor the activities of the subrecipient to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. The Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over subrecipient monitoring. CONDITION: The Regional Office of Education No. 39 did not have adequate controls over subrecipient monitoring in compliance with the Code. CONTEXT: During our testing of nine subrecipients, we noted the following:  The Regional Office of Education No. 39 did not verify whether subrecipients were required to be audited.  The Regional Office of Education No. 39 did not have written policies and procedures for subrecipient monitoring and could not provide evidence the Regional Office of Education No. 39 monitored its subrecipients during the audit period. EFFECT: Lack of controls over subrecipient monitoring may result in subrecipients not properly administering the federal programs in accordance with federal regulations. CAUSE: Management indicated this was due to oversight and staffing limitations by previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 establish and implement procedures over subrecipient monitoring. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and although some subrecipient monitoring was conducted, it may not have been sufficiently documented. The Regional Office of Education No. 39 is implementing policies and procedures to ensure subrecipient monitoring is not only conducted but documented as well.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Regional Office of Education No. 39 did not have adequate record keeping over its equipment acquired from federal funds. The Code of Federal Regulations (2 CFR §200.313(d)(1)) requires that procedures for managing equipment acquired with federal funds must maintain property records that include the following information: (i) a description of the property, (ii) manufacturer’s serial number or other identification number, (iii) source of the funding for the property (including the FAIN), (iv) who holds title, (v) acquisition date (vi) cost of the property, (vii) percentage of federal contribution in the project cost for the Federal award under which the property was acquired, (viii) location (ix) use and condition of the property, and (x) and any ultimate disposition data, including date of disposal and sale price of the property. Moreover, the Code (2 CFR §200.313(d)(2)) requires that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include record keeping and monitoring of equipment acquired from federal funds. CONDITION: The Regional Office of Education No. 39 asset details in the property records include only the description of the property, acquisition date, and cost of the property. The other minimum requirements specified by the Code are not included in the property records. Moreover, the Regional Office of Education No. 39 was unable to properly account for the results of its physical inventory count and only performed partial reconciliation. EFFECT: Inadequate record keeping over equipment acquired from federal funds may result in noncompliance with the Code. Additionally, incomplete reconciliation of physical inventory can lead to discrepancies in financial reporting, affecting overall accountability. CAUSE: Management indicated the issue was due to oversight and lack of training on requirements by the previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 comply with federal regulations by monitoring equipment acquired from federal funds and establish a regular schedule for comprehensive reconciliation of physical inventory to ensure accurate financial reporting and enhance overall accountability. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and is implementing documents and procedures to meet requirements in the future.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR § 200.332 (g)) requires the Regional Office of Education No. 39 to verify every subrecipient is audited as required by Subpart F when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR § 200.501. The Code (2 CFR § 200.332 (e)) requires the Regional Office of Education No. 39 to monitor the activities of the subrecipient to ensure the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved. The Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over subrecipient monitoring. CONDITION: The Regional Office of Education No. 39 did not have adequate controls over subrecipient monitoring in compliance with the Code. CONTEXT: During our testing of nine subrecipients, we noted the following:  The Regional Office of Education No. 39 did not verify whether subrecipients were required to be audited.  The Regional Office of Education No. 39 did not have written policies and procedures for subrecipient monitoring and could not provide evidence the Regional Office of Education No. 39 monitored its subrecipients during the audit period. EFFECT: Lack of controls over subrecipient monitoring may result in subrecipients not properly administering the federal programs in accordance with federal regulations. CAUSE: Management indicated this was due to oversight and staffing limitations by previous management. RECOMMENDATION: We recommend the Regional Office of Education No. 39 establish and implement procedures over subrecipient monitoring. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and although some subrecipient monitoring was conducted, it may not have been sufficiently documented. The Regional Office of Education No. 39 is implementing policies and procedures to ensure subrecipient monitoring is not only conducted but documented as well.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (2 CFR §200.512(a)(1)) requires the data collection form and reporting package be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier). Moreover, Office of the Management and Budget announced that it is waiving the 30-day deadline for 2022 submissions. Thus, audits will be considered on time if submitted within nine months after the fiscal period end date. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure the data collection form and related reporting package are timely submitted. Federal oversight agencies use the data collection form and related reporting package as a key tool in monitoring the accountability of federal awards. CONDITION: The Regional Office of Education No. 39 was required to submit its June 30, 2022, data collection form and related reporting package to the Federal Audit Clearinghouse by March 31, 2023; however, it was not submitted until January 3, 2024, resulting in a delay of 278 days. EFFECT: Failure to submit timely the required federal reports, impairs the ability of federal oversight agencies to perform such monitoring on a timely basis. Additionally, this resulted in noncompliance with federal requirements and could also result in the withholding of funding for other eligible projects or activities involving the Regional Office of Education No. 39. CAUSE: Management indicated that the Fiscal Year 2022 Audit packet was finalized late due to delays in preparing the packets for the prior years (2020 and 2021) and was only submitted in January 2024. This timeline issue stemmed from a lack of monitoring in previous years, resulting in audits falling behind. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over timely submission of the data collection form and related reporting package. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and is working with their contracted accounting firm to ensure that the office gets back on schedule with the yearly audit deadlines so that the Federal Audit Clearinghouse may be submitted on schedule as well.

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (2 CFR §200.512(a)(1)) requires the data collection form and reporting package be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier). Moreover, Office of the Management and Budget announced that it is waiving the 30-day deadline for 2022 submissions. Thus, audits will be considered on time if submitted within nine months after the fiscal period end date. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure the data collection form and related reporting package are timely submitted. Federal oversight agencies use the data collection form and related reporting package as a key tool in monitoring the accountability of federal awards. CONDITION: The Regional Office of Education No. 39 was required to submit its June 30, 2022, data collection form and related reporting package to the Federal Audit Clearinghouse by March 31, 2023; however, it was not submitted until January 3, 2024, resulting in a delay of 278 days. EFFECT: Failure to submit timely the required federal reports, impairs the ability of federal oversight agencies to perform such monitoring on a timely basis. Additionally, this resulted in noncompliance with federal requirements and could also result in the withholding of funding for other eligible projects or activities involving the Regional Office of Education No. 39. CAUSE: Management indicated that the Fiscal Year 2022 Audit packet was finalized late due to delays in preparing the packets for the prior years (2020 and 2021) and was only submitted in January 2024. This timeline issue stemmed from a lack of monitoring in previous years, resulting in audits falling behind. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over timely submission of the data collection form and related reporting package. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and is working with their contracted accounting firm to ensure that the office gets back on schedule with the yearly audit deadlines so that the Federal Audit Clearinghouse may be submitted on schedule as well.

CRITERIA/SPECIFIC REQUIREMENT: The grant award agreements between the Regional Office of Education No. 39 and Illinois State Board of Education require the Regional Office of Education No. 39 to complete and submit expenditure reports quarterly and performance reports semi-annually. The quarterly expenditure reports are due 20 calendar days after the end of the reporting quarter while the semi-annual performance reports are due 30 calendar days after the reporting semi-annual period. The Regional Office of Education No. 39 is also required to submit an annual performance report describing how the Regional Office of Education No. 39 used the awarded funds during the performance period. The annual reports are due June 6, 2024. The Code of Federal Regulations (Code) (2 CFR. §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure compliance with grant reporting requirements. CONDITION: The Regional Office of Education No. 39 did not submit or timely submit the required reports to the Illinois State Board of Education in compliance with the grant award agreement. CONTEXT: During testing of the Regional Office of Education No. 39’s compliance with the grant reporting requirements, we noted the following:  Sixteen of 38 (42%) quarterly expenditure reports were submitted 1 to 112 days late.  Two of 2 (100%) annual reports were not submitted. EFFECT: Failure to meet grant reporting requirements is a noncompliance with the related grant agreement and could result in loss of grant funding in future years. CAUSE: Management indicated required reports were not submitted or timely submitted due to oversight and competing priorities. RECOMMENDATION: We recommend the Regional Office of Education No. 39 implement procedures to ensure adherence to the grant reporting requirements. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and will provide close oversight for the timely submission of grant expenditures and performance reports. Checklist, due dates, and reminders are shared from the Regional Superintendent to the Business Office Manager and Program Directors. Management will review the grant report submissions in Illinois Web Accessibility System for accuracy and completion before approving and submitting to the Illinois State Board of Education.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards. The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards. CONDITION: The Regional Office of Education No. 39 did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported. CONTEXT: During our review of the SEFA, we noted the following:  The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.  Program title descriptions were incorrect.  Assistance listing number was incorrectly listed.  Pass-through subrecipient amount was not indicated. EFFECT: Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline. CAUSE: Management indicated the errors on the SEFA was due to oversight. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and will work with contracted accounting firm to ensure that the schedule of expenditures of federal awards are accurately reported as required.

CRITERIA/SPECIFIC REQUIREMENT: The Code of Federal Regulations (2 CFR §200.512(a)(1)) requires the data collection form and reporting package be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier). Moreover, Office of the Management and Budget announced that it is waiving the 30-day deadline for 2022 submissions. Thus, audits will be considered on time if submitted within nine months after the fiscal period end date. In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures to ensure the data collection form and related reporting package are timely submitted. Federal oversight agencies use the data collection form and related reporting package as a key tool in monitoring the accountability of federal awards. CONDITION: The Regional Office of Education No. 39 was required to submit its June 30, 2022, data collection form and related reporting package to the Federal Audit Clearinghouse by March 31, 2023; however, it was not submitted until January 3, 2024, resulting in a delay of 278 days. EFFECT: Failure to submit timely the required federal reports, impairs the ability of federal oversight agencies to perform such monitoring on a timely basis. Additionally, this resulted in noncompliance with federal requirements and could also result in the withholding of funding for other eligible projects or activities involving the Regional Office of Education No. 39. CAUSE: Management indicated that the Fiscal Year 2022 Audit packet was finalized late due to delays in preparing the packets for the prior years (2020 and 2021) and was only submitted in January 2024. This timeline issue stemmed from a lack of monitoring in previous years, resulting in audits falling behind. RECOMMENDATION: The Regional Office of Education No. 39 should establish and implement internal controls over timely submission of the data collection form and related reporting package. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the findings and is working with their contracted accounting firm to ensure that the office gets back on schedule with the yearly audit deadlines so that the Federal Audit Clearinghouse may be submitted on schedule as well.