Audit 375416

Finding 2025-001 Lack of Internal Control over Procurement Federal Agency: U.S. Department of Education Federal Program: Research and Development Cluster ALN: 84.351 Award Numbers: S351A210129 Award Years: 2021-2026 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: When procuring goods and services for a grant’s purposes, grantees must follow their own procurement procedures, but only to the extent that those procedures meet the minimum requirements for procurement specified in 2 CFR Part 200.317. Procurement procedures for the district are outlined in Board Policy 3311 Bids, which requires the District to perform and document one of five methods of procurement based on the purchase amount for all costs charged to federal grants, when required by law, or whenever it appears to be in the best interest of the district to do so. Condition and context: During our testing of allowable costs, management was unable to provide adequate supporting documentation to demonstrate that proper procurement procedures were followed in one purchase. Cause: The District failed to maintain adequate documentation that procurement procedures were performed in accordance with Board Policy. Effect: Failure to perform and document procurement procedures could result in noncompliance with federal grant requirements and fail to ensure that District funds are spent in the best interest of the District. Additionally, failure to follow procurement policies could cause unauthorized transactions or unauthorized contracts as the School Board would not have the opportunity to review bids/quotes and select the best option based on relevant criteria. Questioned Costs: None. Repeat Finding: This finding was a financial statement finding in prior year. Recommendation: We recommend that the District follow Board Policies related to bids and document procurement procedures, including written documentation of sole source procurement or exemptions. Management’s Response: Management concurs with the finding. See Corrective Action Plan.

Finding 2025-002 Lack of Internal Controls over Reporting Federal Agency: U.S. Department of Education Federal Program: Research and Development Cluster ALN: 84.351 Award Numbers: S351A210129 Award Years: 2021-2026 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Per 2 CFR 200.329, the grant recipient must monitor their activities under Federal Awards to ensure they are compliant with all requirements and meeting performance expectations. Per the grant award, performance reports should contain current performance and financial expenditure information for the grant. Condition and context: During our testing of reporting, we noted that the total expenditures reported on the November performance report exceeded the expenditure account detail for the reporting period by about $60,000. Per the grant director, this was due to purchase order requisitions being cancelled by the business manager that were still accrued as expenditures on the November report by the grant director. Cause: The district did not have internal controls in place to avoid overstating expenditures in the grant report. Effect: Failure to accurately report expenditures could result in noncompliance with federal grant requirements and a loss of Federal grant funding. Questioned Costs: None. Repeat Finding: No. We believe this to be an isolated occurrence. Recommendation: We recommend that the District follow internal control procedures to confirm that grant expenditures are accurately reported. Management’s Response: Management concurs with the finding. See Corrective Action Plan.