Audit 396260

Criteria or Specific Requirement: Per 2 CFR 200.303 - Internal Controls and the OMB Complaince Supplement: Child Nutrition Cluster, Reporting - The District is required to have internal controls, including segregation of duties, over reporting of monthly reimbursement claims. Condition: The same individiual is responsible for preparing and submitting monthly reimbursement claims for the Child Nutrition Program without an independent review or approval before submission. Questioned Costs: The condition has resulted in no identified questioned costs. Context: Currently one individual is responsible for preparing and submitting the monthly reimbursement claims. Effect: Meal claims could be submitted to the Illinois State Board of Education that do not accurately reflect the number of meals served. Consequently, the District could be over- or under-reimbursed by this program. Cause: Abscense of formal internal control procedures resulted in one person performing all reporting functions. Recomendation: Implement segregation of duties by requiring one person to prepare the monthly claim and a second person (e.g., supervisor) to review and approve the claim before submission. The review should be suppported with signatures or electronic approval logs. Management's Reponse: A corrective action plan will be developed and implemented. A secondary review of the meal claim to the supporting documents will be performed before the meal claim is submitted.

Criteria or Specific Requirement: Per 2 CFR 200.302(b)(3) a grant recipient must maintain adequate financial records that identify the source and application of funds for federally funded activities. These records must contain information pertaining to federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Condition: Federally funded expenditures were comingled with expenditures paid for with non federally funded sources in the accounting records. Questioned Costs: None. Context: Non federally funded expenditures were recorded in the accounts specifically designated for a federal grant. Effect: The District may be unable to accurately determine the federally funded expenditures for a specific period. Cause: The District did not accurately maintain separate accounts for federal grant expenditures. Recommendation: The District should accurately maintain separate accounts for federal grant expenditures in accordance with 2 CFR 200.302(b)(3). Management's Response: The District agrees with the finding and will review their accounting records and implement a corrective action plan.

Criteria or Specific Requirement: Per 2 CFR 200.303 a grant recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The District's internal controls did not affectively monitor the grant budget. Questioned Costs: None. Context: The District did not compare actual expenditures in each grant line item with available remaining budget amounts. Effect: The District claimed expenditures in grant lines that had already been fully expended. Cause: When expenditures were reviewed and approved they were not compared to the remaining budget. Recommendation: The District should accurately track the actual expenditures compared to the remaining budget for each grant line. Management's Response: The District agrees with the finding and a corrective action plan and proper internal controls will be implemented.

Criteria or Specific Requirement: Per the OMB Compliance Supplement: Allowable Costs/Cost Principles, an allowable cost must conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the federal award as to types or amount of cost items. The grant budget determines the amount and type of costs that are allowable for the program. Condition: The District expended amounts in excess of the grant budget. Questioned Costs: $106,440. Context: The District continued to claim expenditures for which there was no avaliable budget. Effect: Unallowable costs were reimbursed by the federal award. Cause: The District's internal controls did not affectively monitor the grant. Recommendation: The District should monitor the grant more accurately and only claim expenditures to the extent to which they have been budgeted for. Management's Response: The District agrees with the finding and a corrective action plan will be implemented.

Criteria or Specific Requirement: Per 2 CFR 200.303 a grant recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Condition: Management reviewed expenditure reports prior to submission, however this review did not detect or correct errors in the expenditure report. Questioned Costs: None. Context: The District submitted innacurate expenditure reports which did not agree with the accounting records. Effect: The District reported expenditures that could not be supported by the accounting records. Cause: When the expenditure reports were reviewed they were not accurately compared to the accounting records. Recommendation: Management's review of the expenditure reports should include a comparison of the functions and objects reported on the report to the accounting records. Management's Response: The District agrees with the finding and a corrective action plan and proper internal controls will be implemented.

Criteria or Specific Requirement: The ISBE State and Federal Grant Administration Policy, Fiscal Requirements, and Procedures handbook requires grantees to submit quarterly expenditure reports that reflect the funds utilized by the grantee by function and object for the quarter. Condition: Quarterly expenditure reports did not accurately reflect the actual expenditures in the accounting records by function and object. Questioned Costs: None. Context: Expenditures claimed as salaries, employee benefits, and supplies and materials on the quarterly reports were supported by expenditures recorded as purchased services, capital outlay, and other objects in the accounting records. Effect: Quarterly expenditure reports did not accurately reflect the actual expenditures in the accounting records by function and object. Cause: Management reviewed expenditure reports prior to submission, however, this review did not detect or correct errors in the expenditure report. Recommendation: Management's review of the expenditure reports should include a comparison of the functions and objects reported on the report to the accounting records. Management's Response: The District agrees with the finding and a corrective action plan will be implemented.