Audit 390213

Finding 2025-003: Significant Deficiency - Internal Control and Compliance Over Procurement Program: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555 Pass-Through Agency: Wisconsin Department of Public Instruction Repeat of Prior Year Finding 2024-003 Criteria: Guidance provided in 2 CFR part 200.318 requires non-federal entities to establish and follow their own documented procurement procedures that conform to applicable federal law and standards. A system of internal controls should be in place to ensure procurement policies are being adhered to. There are also requirements to verify the vendors are not suspended or debarred, and per the District's procurement policy, multiple quotes or bids should be obtained. Condition/Context: For one of the two contracts tested, the District was unable to provide evidence that the District's procurement policy was followed. The food service director handled the procurement with no evidence retained documenting: 1) prior approval of the equipment purchase, 2) the District's bid/quote procedures were followed, and 3) the District's policy to verify the vendor is not debarred or suspended was followed. The sample was not a statistically valid sample. Cause: The District's policy for procurement was not effectively communicated to staff or enforced. Effect: This could potentially lead to higher costs for the food service program or selection of vendors who are not eligible to be paid with federal funds. Questioned Costs: None noted. Recommendation: The District should communicate with personnel to ensure they are familiar with and complying with the District's policies regarding procurement, suspension and debarment rules for federal programs. Views of Responsible Officials: Management agrees with finding 2025-003 and will make efforts to implement recommended procedures.

Finding 2025-004: Significant Deficiency - Internal Control and Compliance Over Reporting Program: Medicaid Cluster Assistance Listing Number: 93.778 Pass-Through Agency: Wisconsin Department of Health Repeat of Prior Year Finding 2024-005 Criteria: The WI DHS School-Based Services Handbook requires school districts to report salaries, benefits and contracted staffing costs by practitioner license classification each quarter and within the SBS Annual Cost Report. A system of internal control should be in place and operating effectively to achieve a high reliability that errors or irregularities in reporting would be discovered by District staff. This review should be documented and supporting evidence retained. Condition/Context: The two Quarterly Financial Summary reports selected for testing were prepared and submitted by the same person, with no documentation of review by another person. The SBS Annual Cost Report was also prepared and submitted by the same individual with no additional documentation of review. Additionally, of the two Quarterly Financial Summary Reports tested, one report included errors in cost totals resulting in overreported costs. Contracted staff costs that were eligible to be reimbursed through the State Special Education Program were not properly removed from the total net staff costs reported. The SBS Quarterly Financial Summary and Annual Cost Report do not constitute a direct reimbursement claim for funding. Thus the $33,210 of questioned costs reported did not result in an award to the district of $33,210. Additionally, the District corrected the 3rd quarter reporting upon being notified of the error, leading to a corrected SBS Annual Report. Cause: There is no formal process for preparation and review of the Quarterly Financial Summaries and the Annual Report. Effect: Without proper review of claims, incorrect amounts could be claimed on the reports and could result in over (or under) funding. Questioned Costs: Questioned costs for ALN number 93.778 include total contracted staff expenses of $33,210 erroneously reported within the 3rd quarter financial summary's net staff costs. Recommendation: We recommend the District implement a process for the preparation and review of the Quarterly Financial Summary and Annual Cost reports prior to submission. This review should include review of support and intervening calculations and review of the report for completeness and accuracy. Documentation of these reviews should be maintained by the District for later viewing. Views of Responsible Officials: Management agrees with finding 2025-004 and will make efforts to implement recommended procedures. Management submitted a corrected version of the tested 3rd Quarterly Financial Summary to SBS after audit fieldwork.