CHILD NUTRITION CLUSTER – PROCUREMENT U.S. Department of Agriculture Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Passed Through Minnesota Department of Education Pass Through Number: 10.CNC Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at CFR section 200.318 through 200.326. This includes utilizing one of the five allowable procurement methods, including small purchase guidelines for items over the micro-purchase threshold and sealed bids, competitive proposals, or noncompetitive proposals when items exceed the simplified acquisition threshold. In addition, the Uniform Guidance requires the entity maintain records sufficient to detail the history of the procurement. Condition: During our testing of the District’s procurements within the Child Nutrition program, it was noted that none of the selected procurements had sufficient documentation of the history of the transaction. Context: Forty procurement transactions were selected for testing. Federal regulations require that purchases follow documented procurement procedures, including evidence of open competition and retention of contract documentation for those procurement transactions over the District’s $3,500 micropurchase threshold. The District did not provide documentation of an open and competitive process for any of these purchases. Questioned costs: None Cause: Time pressure led to this requirement being missed. Effect: Lack of proper documentation could lead to using vendors for small purchase acquisition without ensuring comparable pricing from other vendors and justifying costs. Repeat finding: No Recommendation: We recommend that the District ensure quotes are obtained for all procurements that are above the micro-purchase threshold, and that this process is documented along with their assessments of cost analysis performed. Views of responsible officials: There is no disagreement with the finding.
CHILD NUTRITION CLUSTER – SUSPENSION AND DEBARMENT U.S. Department of Agriculture Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Passed Through Minnesota Department of Education Pass Through Number: 10.CNC Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: The District should have controls in place to ensure compliance with suspension and debarment requirements. The Uniform Guidance requires when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by either checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause to the covered transaction with the entity. Condition: The covered transactions which were tested did not have documentation the District performed the required verification. Context: The District did not perform the required verification procedures over 8 out of 8 covered transactions in fiscal year 2024. Questioned costs: None Cause: The District has no policy formalizing the suspension and debarment procedures and controls. Effect: A lack of updated policies and suspension and debarment procedures being performed could lead to the District entering into a covered transaction with a suspended or debarred vendor. Repeat finding: No Recommendation: We recommend the District formalizes their suspension & debarment procedures in a policy and ensure they check suspension and debarment for all vendors prior to entering into a covered transaction. Views of responsible officials: There is no disagreement with the finding.
CHILD NUTRITION CLUSTER – REPORTING U.S. Department of Agriculture Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.556, 10.559, 10.582 Passed Through Minnesota Department of Education Pass Through Number: 10.CNC Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: The School should ensure it has proper controls in place to ensure all required reports for the program have documentation of someone other than the preparer reviewing the reports. Condition: During our testing of the District’s reporting process within the Child Nutrition program, it was noted the reports did not agree to the food service records. Context: 3 out of 3 selections were noted as having differences between amounts reported to State and District’s records. The total difference resulted in an under-reporting of claims valued at $73. Questioned costs: None Cause: Procedures for changes and adjustments made by Nutrition Services that impact MDE Claims Summary Reports are not formally communicated to the Accountant after claims submissions are made on a monthly basis. Changes in PrimeroEdge have no District cutoff date, whereas CLiCS claims only have 60 days for submission. Effect: Lack of reporting accuracy could lead to MDE incorrectly calculating the monthly reimbursement funds to the District, resulting in an under reporting or over reporting of claims throughout the school year and delays in receiving the correct funding. Repeat finding: No Recommendation: We recommend that the District ensures all changes and adjustments are communicated to the accountant who performs claim submissions. When the Nutrition Service Assistant Director’s review results in additional adjustments within PrimeroEdge, the District should only make those changes before the CLiCs cutoff date to prevent differences between client records in PrimeroEdge and CLICS reporting. View of Responsible Officials: There is no disagreement with the audit finding.
SPECIAL EDUCATION CLUSTER – PROCUREMENT U.S. Department of Education Special Education Cluster Assistance Listing Number: 84.027 & 84.173 Passed Through Minnesota Department of Education Pass Through Number: H027A220087 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: Non-federal entities other than states must follow the procurement standards set out at CFR section 200.318 through 200.326. This includes utilizing one of the five allowable procurement methods, including small purchase guidelines for items over the micro-purchase threshold and sealed bids, competitive proposals, or noncompetitive proposals when items exceed the simplified acquisition threshold. In addition, the Uniform Guidance requires the entity maintain records sufficient to detail the history of the procurement. Condition: During our testing of the District’s procurements within the Special Education program, it was noted not all procurements followed the appropriate method and history of the transaction was not sufficiently documented. Context: Five selections over the $3,500 micropurchase threshold were selected for testing. Federal regulations require that purchases above this threshold follow documented procurement procedures, including evidence of open competition and retention of contract documentation. The District did not provide documentation of an open and competitive process for four of these purchases and did not maintain the executed contract for one purchase. Questioned costs: None Cause: Time pressure led to this requirement being missed. Effect: Lack of proper documentation could lead to using vendors for small purchase acquisition without ensuring comparable pricing from other vendors and justifying costs. Repeat finding: Yes – 2023-006. Recommendation: We recommend that the District ensure quotes are obtained for all procurements that are above the micro-purchase threshold, and that this process is documented along with their assessments of cost analysis performed. Views of responsible officials: There is no disagreement with the finding.
SPECIAL EDUCATION CLUSTER – SUSPENSION AND DEBARMENT U.S. Department of Education Special Education Cluster Assistance Listing Number: 84.027 & 84.173 Passed Through Minnesota Department of Education Pass Through Number: H027A220087 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Material Noncompliance (Modified Opinion) Criteria or specific requirement: The District should have controls in place to ensure compliance with suspension and debarment requirements. The Uniform Guidance requires when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by either checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause to the covered transaction with the entity. Condition: The covered transactions which were tested did not have documentation the District performed the required verification. Context: The District did not perform the required verification procedures over 5 out of 5 covered transactions in fiscal year 2024. Questioned costs: None Cause: The District has no policy formalizing the suspension and debarment procedures and controls. Effect: A lack of policies and suspension and debarment procedures being performed could lead to the District entering into a covered transaction with a suspended or debarred vendor. Repeat finding: Yes – 2023-007. Recommendation: We recommend the District formalize their suspension and debarment procedures in a policy and ensure they check suspension and debarment for all vendors prior to entering into a covered transaction. Views of responsible officials: There is no disagreement with the finding.
EDUCATION STABILIZATION FUND – ALLOWABLE COSTS U.S. Department of Education COVID-19 Education Stabilization Fund Assistance Listing Number: 84.425 Passed Through Minnesota Department of Education Pass Through Number: S425U220045 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or specific requirement: The Uniform Guidance requires charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. In addition, these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, be incorporated into the official records of the entity, and reasonably reflect the total activity for which the employee is compensated. Condition: During our testing of a sample of payroll transactions charged to the grant we noted not all transactions were supported by properly approved documentation. Context: Forty-five payroll disbursements were selected for testing. Three disbursements lacked documented supervisor approval, which is required to validate time worked and authorize payment. Additionally, one disbursement included amounts incorrectly allocated to the program based on the employee’s intended time allocation. Questioned costs: $7,070 Cause: Support for timesheets was not retained Effect: The District is not in compliance with the Uniform Guidance. Repeat finding: Yes – 2023-005. Recommendation: We recommend the District puts in place proper controls to ensure supporting documentation for timesheets is retained for all employees Views of responsible officials: There is no disagreement with the finding.