KANKAKEE SCHOOL DISTRICT 111 32-046-1110-25 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2025 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER:14 2025 - 002 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: Child Nutrition Cluster 4. Project No.: 24-4210-00, 25-4210-00, 25-4299-00, 25-4299-00, 24-4220-00, 25-4220-00 5. AL No.: 10.553, 10.555 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Agriculture 8. Criteria or specific requirement (including statutory, regulatory, or other citation) The District is required to follow the methods of procurement outlined in 2 CFR 200.320, , 105 ILCS 5/10-20.21, and the District's procurement policy when purchasing goods or services with federal awards. Key requirements include documented procedures, full and open competition, cost and price analysis, conflict of interest policies, and adherence to specific purchasing thresholds (micro-purchase, simplified acquisitions, sealed bids, competitive proposals, or sole source). Specifically, when the aggregate dollar amount of the procurement transaction exceeds the simplified acquisition threshold (currently $35,000), formal methods of procurement are required. 9. Condition The District procured $885,950 of services from a food service vendor and did not follow the formal methods of procurement outlined in 2 CFR 200.320(b)(2), 105 ILCS 5/10-20.21, and their established procurement policy as they did not procure the services through a competitive request for proposal process. 10. Questioned Costs Since the expenditures related to the procurement are pooled in the School Food Service account, the questioned costs of $885,950 relate to all the projects under assistance listing numbers 10.553 and 10.555. Our sample was not statistically valid and consisted of two vendors with a total sampled vendor payments of $1,078,742. 11. Context During our audit procedures we were unable to obtain supporting documentation for demonstrating that the district followed the formal methods of procurement outlined in 2 CFR 200.320(b) for goods procured from one food service vendor during the year that exceeded the simplified acquisition threshold. 12. Effect Failure to comply with federal and state procurement standards results in noncompliance and may expose the District to overpayment for food service commodities and services, increase risk of misuse of funds, and reduced transparency and accountability in the procurement process. 13. Cause The District failed to follow their established procurement policy, including inadequate review controls, to ensure compliance with procurement requirements as outlined in (2 CFR 200.320 )and 105 ILCS 5/10-20.021. 14. Recommendation We recommend that the District follow the procedures for the procurement of goods that meet the procurement procedures as defined by (2 CFR 200.320), 105 ILCS 5/10-20.021, and their established procurement policy. The District should maintain documentation to show that they complied with these requirements. 15. Management's response See corrective action plan