Audit 390107

Finding 2025-003: Significant Deficiency - Internal Control over Eligibility Program: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Pass-Through Agency: Wisconsin Department of Public Instruction Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in eligibility would be discovered by your staff. Condition: Eligibility determinations for applications for free and reduced price school meals are prepared by one individual, and there is no review performed by someone other than the preparer. Cause: There is lack of documentation of review by someone other than the preparer of applications for free and reduced price school meals eligibility determinations. Context: For all eight of the applications selected for testing, the eligibility determination was completed by one individual without any documentation of review to confirm or verify the determination. The sample was not statistically valid. Effect: Without proper review of eligibility determinations, individuals could incorrectly be determined eligible for free or reduced price school meals. Questioned Costs: None noted. Recommendation: A system should be put in place to sufficiently document the review of the eligibility determinations and applications for free and reduced price school meals. Views of Responsible Officials: Management agrees with finding 2025-003 and will make efforts to implement recommended procedures.

Finding 2025-004: Material Weakness - Internal Control and Compliance Over Activities Allowed/Allowable Costs Program: COVID-19: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Wisconsin Department of Public Instruction Repeat of Prior Year Finding 2024-004 Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in expenditure recording would be identified by the District. This system should include approval of all inputs. Additionally, ESSER funds are subject to the Tydings amendment in section 421(b) of the General Education Provisions Act, 20 U.S.C. 1225(b), and are therefore available for obligation through September 30, 2024. As such, all expenditures must be obligated by September 30, 2024. Condition: Approval was not consistently documented on invoices and extended pay wages lacked documented approval. Of the 40 expenditures tested, 16 lacked adequate internal control documentation of review and approval and 3 were for purchases made after September 30, 2024 with no prior obligation. The sample was not statistically valid. Cause: The District did not ensure that the proper reviews and approvals were in place prior to payment and did not adhere to the obligation requirements. Context: Of the 40 expenses tested, two payroll transactions involving extended pay were found to not have approval over the amounts paid by the District and 14 invoices were found to not have documented approval. Of these invoices, three were incurred after the end of the grant period with no obligation made in the allowable time period. One person handles the majority of the supporting documents, with no outside review. Extended pay rates were approved many years ago, but no documentation of the approved amounts exists. Purchase orders are generally approved with account coding, but this was not done for purchases that fell outside the usual PO process. Effect: Because of the lack of internal controls, it is less likely that errors or irregularities in the expenditures would be discovered internally. Unallowable costs could be paid for with grant funds and costs were incurred outside of the grant period. Questioned Costs: Questioned costs for Assistance Listing Number 84.425 include $159,233 of expenditures that were not obligated or incurred before the end of the grant period. Recommendation: An appropriate, knowledgeable employee should review all invoices and timecards prior to payment, including extended time for training session compensation, and approval should be documented. We also recommend that employer extended pay rates should be approved annually by the School Board, and documentation of approved rates should be retained. District staff should review and understand the terms of grants to ensure expenditures are made within required time periods. Views of Responsible Officials: The District acknowledges this finding. Invoices are reviewed by the Administration and Board of Education monthly. Additional reviews by administration will be put into place. The Board of Education shall approve the pay rates annually and appropriate documentation kept.

Finding 2025-005: Significant Deficiency - Internal Control Over Reporting Program: COVID-19: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Wisconsin Department of Public Instruction Repeat of Prior Year Finding 2024-005 Criteria: A system of internal control should be in place and operating effectively to achieve higher reliability that errors or irregularities in reporting would be discovered by the District. Condition/Context: For the two claims selected for testing, the reports were prepared and certified by the same person. The sample was not statistically valid. Cause: There is improper segregation of duties surrounding the preparation and submission of claim forms. Effect: Incorrect amounts could be reported in the claims, potentially resulting in overreported or underreported expenses. Questioned Costs: None noted. Recommendation: The District should implement a system in which one person prepares the report and another reviews to ensure it is correct prior to submission. Documentation of review should be maintained. Views of Responsible Officials: Management agrees with finding 2025-005 and has made efforts to implement recommended procedures. All claims will be reviewed and approved by a third party prior to submission.

Finding 2025-006: Significant Deficiency - Internal Control Over Reporting Program: Medicaid Cluster Assistance Listing Number: 93.778 Pass-Through Agency: Wisconsin Department of Health Services/CESA 10 Repeat of Prior Year Finding 2024-006 Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in reporting would be discovered by the District. Condition/Context: For the two quarterly reports tested, there is no evidence of review or approval by the District. The sample was not statistically valid. Cause: The District does not have controls in place to review the quarterly financial submissions entered by CESA. Effect: Inaccurate reporting may cause the District to receive more or less funding than they are entitled to. Questioned Costs: None noted. Recommendation: We recommend that the quarterly financial submissions be reviewed by the District, and that any errors identified be corrected by CESA 10. Documentation of these reviews should be maintained. Views of Responsible Officials: Management agrees with finding 2025-006 and has made efforts to implement recommended procedures. Data will be reviewed prior to submission to CESA 10 and, once CESA has completed their claim, it will be returned to the District for approval.

Finding 2025-007: Significant Deficiency - Internal Control and Compliance Over Special Tests Program: Medicaid Cluster Assistance Listing Number: 93.778 Pass-Through Agency: Wisconsin Department of Health Services/CESA 10 Criteria: A system of internal control should be in place and operating effectively to achieve a higher reliability that errors or irregularities in special tests would be discovered by the District. This should include a process to ensure the correct number of one-way bus trips for IEP transportation is reported on the cost report. Condition/Context: An error was noted in the support used in the calculation of total trips, resulting in one month of data being excluded from the total. Total one-way bus trips were not accurately calculated and reported on the annual cost report. The sample was not statistically valid. Cause: The spreadsheet used to calculate the total trips contained a formula error. This was not detected in the District’s review of the report. Effect: Inaccurate reporting may cause the District to receive more or less funding than they are entitled to. Questioned Costs: None noted. Recommendation: We recommend the District review all pieces of the annual reporting for this program, including the support for all amounts reported. Views of Responsible Officials: This District agrees with this finding. The District is in the process of implementing a review process of the Medicaid information received from CESA #10.