Audit 53174

FY End
2022-06-30
Total Expended
$1.38M
Findings
12
Programs
14
Organization: Isd #363 - Northome (MN)
Year: 2022 Accepted: 2022-12-21

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
48476 2022-003 Material Weakness - H
48477 2022-004 Material Weakness - AF
48478 2022-003 Material Weakness - H
48479 2022-004 Material Weakness - AF
48480 2022-003 Material Weakness - H
48481 2022-004 Material Weakness - AF
624918 2022-003 Material Weakness - H
624919 2022-004 Material Weakness - AF
624920 2022-003 Material Weakness - H
624921 2022-004 Material Weakness - AF
624922 2022-003 Material Weakness - H
624923 2022-004 Material Weakness - AF

Contacts

Name Title Type
JHJUU533P8R4 Jeremy Tammi Auditee
2188975275 Tracee Bruggeman Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported in the accompanying schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Schedule includes the federal award activity of Independent School District No. 363 under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Independent School District No. 363, it is not intended to be and does not present the financial position or changes in net position of Independent School District No. 363.
Title: Commodity Distribution Accounting Policies: Expenditures reported in the accompanying schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Nonmonetary assistance is reported in the schedule at the fair market value of the commodities received and disbursed.
Title: Pass-Through Entities Accounting Policies: Expenditures reported in the accompanying schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. All pass-through entities listed above use the same AL numbers as the federal grantors to identify these grants and have not assigned any additional identifying numbers.
Title: Subrecipients Accounting Policies: Expenditures reported in the accompanying schedule of expenditures of federal awards (the Schedule) are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. During 2022, the District did not pass any federal money to subrecipients.

Finding Details

Federal Program - Education Stabilization Fund (84.425) Period of Performance. Criteria - The District is required to submit a budget to the Minnesota Department of Education (MDE) prior to spending the Education Stabilization Grants. Condition - The budget for three grants were submitted and approved under the FY 2021 award, but the expenditures were to be incurred in FY 2022 award. The District received $588,257 on 12/1/21 and the District returned the award to the MDE on 8/10/22. The District also received $261,930 on 12/22/21, of which the District returned $113,627 on 7/13/22 because the District was not able to receive the bus in FY 2022. $148,303 was also returned on 9/22/22 for being entered into the incorrect fiscal year. Questioned Costs - None. Context - The District entered the budget and the expenditures in FY 2021, but the budget and expenditures should have been reported in FY 2022. Also, the District did not receive the bus, so there was no expenditure to report. Cause - Oversight by staff. Effect - The District received the grant award under the wrong year, so the award was returned to MDE. Repeat finding - No. Recommendation - We recommend the District implement procedures to ensure the budget and expenditures are reported in the correct year, and the expenditures are only drawn once the District has incurred the expenditures. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Activities Allowed or Unallowed, Equipment and Real Property Management. Criteria - To ensure all expenditures charged to a program are allowable, the District should establish controls for approval of expenditures. In addition, the Minnesota Department of Education (MDE) requires all equipment purchases greater than $5,000 to receive preapproval of the equipment from MDE. Finally, all program expenditures should be coded to their specific finance and object codes to ensure accuracy of program expenditures. Condition - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Questioned Costs - None. Context - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Cause - Oversight by staff. Effect - There is an increased risk of unallowable costs being charged to grants. Repeat finding - No. Recommendation - We recommend the District obtain approvals prior to incurring the expenditures. The District should also report all expenditures to the correct finance and object code at the time the expenditure is incurred. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Period of Performance. Criteria - The District is required to submit a budget to the Minnesota Department of Education (MDE) prior to spending the Education Stabilization Grants. Condition - The budget for three grants were submitted and approved under the FY 2021 award, but the expenditures were to be incurred in FY 2022 award. The District received $588,257 on 12/1/21 and the District returned the award to the MDE on 8/10/22. The District also received $261,930 on 12/22/21, of which the District returned $113,627 on 7/13/22 because the District was not able to receive the bus in FY 2022. $148,303 was also returned on 9/22/22 for being entered into the incorrect fiscal year. Questioned Costs - None. Context - The District entered the budget and the expenditures in FY 2021, but the budget and expenditures should have been reported in FY 2022. Also, the District did not receive the bus, so there was no expenditure to report. Cause - Oversight by staff. Effect - The District received the grant award under the wrong year, so the award was returned to MDE. Repeat finding - No. Recommendation - We recommend the District implement procedures to ensure the budget and expenditures are reported in the correct year, and the expenditures are only drawn once the District has incurred the expenditures. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Activities Allowed or Unallowed, Equipment and Real Property Management. Criteria - To ensure all expenditures charged to a program are allowable, the District should establish controls for approval of expenditures. In addition, the Minnesota Department of Education (MDE) requires all equipment purchases greater than $5,000 to receive preapproval of the equipment from MDE. Finally, all program expenditures should be coded to their specific finance and object codes to ensure accuracy of program expenditures. Condition - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Questioned Costs - None. Context - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Cause - Oversight by staff. Effect - There is an increased risk of unallowable costs being charged to grants. Repeat finding - No. Recommendation - We recommend the District obtain approvals prior to incurring the expenditures. The District should also report all expenditures to the correct finance and object code at the time the expenditure is incurred. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Period of Performance. Criteria - The District is required to submit a budget to the Minnesota Department of Education (MDE) prior to spending the Education Stabilization Grants. Condition - The budget for three grants were submitted and approved under the FY 2021 award, but the expenditures were to be incurred in FY 2022 award. The District received $588,257 on 12/1/21 and the District returned the award to the MDE on 8/10/22. The District also received $261,930 on 12/22/21, of which the District returned $113,627 on 7/13/22 because the District was not able to receive the bus in FY 2022. $148,303 was also returned on 9/22/22 for being entered into the incorrect fiscal year. Questioned Costs - None. Context - The District entered the budget and the expenditures in FY 2021, but the budget and expenditures should have been reported in FY 2022. Also, the District did not receive the bus, so there was no expenditure to report. Cause - Oversight by staff. Effect - The District received the grant award under the wrong year, so the award was returned to MDE. Repeat finding - No. Recommendation - We recommend the District implement procedures to ensure the budget and expenditures are reported in the correct year, and the expenditures are only drawn once the District has incurred the expenditures. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Activities Allowed or Unallowed, Equipment and Real Property Management. Criteria - To ensure all expenditures charged to a program are allowable, the District should establish controls for approval of expenditures. In addition, the Minnesota Department of Education (MDE) requires all equipment purchases greater than $5,000 to receive preapproval of the equipment from MDE. Finally, all program expenditures should be coded to their specific finance and object codes to ensure accuracy of program expenditures. Condition - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Questioned Costs - None. Context - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Cause - Oversight by staff. Effect - There is an increased risk of unallowable costs being charged to grants. Repeat finding - No. Recommendation - We recommend the District obtain approvals prior to incurring the expenditures. The District should also report all expenditures to the correct finance and object code at the time the expenditure is incurred. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Period of Performance. Criteria - The District is required to submit a budget to the Minnesota Department of Education (MDE) prior to spending the Education Stabilization Grants. Condition - The budget for three grants were submitted and approved under the FY 2021 award, but the expenditures were to be incurred in FY 2022 award. The District received $588,257 on 12/1/21 and the District returned the award to the MDE on 8/10/22. The District also received $261,930 on 12/22/21, of which the District returned $113,627 on 7/13/22 because the District was not able to receive the bus in FY 2022. $148,303 was also returned on 9/22/22 for being entered into the incorrect fiscal year. Questioned Costs - None. Context - The District entered the budget and the expenditures in FY 2021, but the budget and expenditures should have been reported in FY 2022. Also, the District did not receive the bus, so there was no expenditure to report. Cause - Oversight by staff. Effect - The District received the grant award under the wrong year, so the award was returned to MDE. Repeat finding - No. Recommendation - We recommend the District implement procedures to ensure the budget and expenditures are reported in the correct year, and the expenditures are only drawn once the District has incurred the expenditures. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Activities Allowed or Unallowed, Equipment and Real Property Management. Criteria - To ensure all expenditures charged to a program are allowable, the District should establish controls for approval of expenditures. In addition, the Minnesota Department of Education (MDE) requires all equipment purchases greater than $5,000 to receive preapproval of the equipment from MDE. Finally, all program expenditures should be coded to their specific finance and object codes to ensure accuracy of program expenditures. Condition - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Questioned Costs - None. Context - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Cause - Oversight by staff. Effect - There is an increased risk of unallowable costs being charged to grants. Repeat finding - No. Recommendation - We recommend the District obtain approvals prior to incurring the expenditures. The District should also report all expenditures to the correct finance and object code at the time the expenditure is incurred. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Period of Performance. Criteria - The District is required to submit a budget to the Minnesota Department of Education (MDE) prior to spending the Education Stabilization Grants. Condition - The budget for three grants were submitted and approved under the FY 2021 award, but the expenditures were to be incurred in FY 2022 award. The District received $588,257 on 12/1/21 and the District returned the award to the MDE on 8/10/22. The District also received $261,930 on 12/22/21, of which the District returned $113,627 on 7/13/22 because the District was not able to receive the bus in FY 2022. $148,303 was also returned on 9/22/22 for being entered into the incorrect fiscal year. Questioned Costs - None. Context - The District entered the budget and the expenditures in FY 2021, but the budget and expenditures should have been reported in FY 2022. Also, the District did not receive the bus, so there was no expenditure to report. Cause - Oversight by staff. Effect - The District received the grant award under the wrong year, so the award was returned to MDE. Repeat finding - No. Recommendation - We recommend the District implement procedures to ensure the budget and expenditures are reported in the correct year, and the expenditures are only drawn once the District has incurred the expenditures. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Activities Allowed or Unallowed, Equipment and Real Property Management. Criteria - To ensure all expenditures charged to a program are allowable, the District should establish controls for approval of expenditures. In addition, the Minnesota Department of Education (MDE) requires all equipment purchases greater than $5,000 to receive preapproval of the equipment from MDE. Finally, all program expenditures should be coded to their specific finance and object codes to ensure accuracy of program expenditures. Condition - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Questioned Costs - None. Context - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Cause - Oversight by staff. Effect - There is an increased risk of unallowable costs being charged to grants. Repeat finding - No. Recommendation - We recommend the District obtain approvals prior to incurring the expenditures. The District should also report all expenditures to the correct finance and object code at the time the expenditure is incurred. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Period of Performance. Criteria - The District is required to submit a budget to the Minnesota Department of Education (MDE) prior to spending the Education Stabilization Grants. Condition - The budget for three grants were submitted and approved under the FY 2021 award, but the expenditures were to be incurred in FY 2022 award. The District received $588,257 on 12/1/21 and the District returned the award to the MDE on 8/10/22. The District also received $261,930 on 12/22/21, of which the District returned $113,627 on 7/13/22 because the District was not able to receive the bus in FY 2022. $148,303 was also returned on 9/22/22 for being entered into the incorrect fiscal year. Questioned Costs - None. Context - The District entered the budget and the expenditures in FY 2021, but the budget and expenditures should have been reported in FY 2022. Also, the District did not receive the bus, so there was no expenditure to report. Cause - Oversight by staff. Effect - The District received the grant award under the wrong year, so the award was returned to MDE. Repeat finding - No. Recommendation - We recommend the District implement procedures to ensure the budget and expenditures are reported in the correct year, and the expenditures are only drawn once the District has incurred the expenditures. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.
Federal Program - Education Stabilization Fund (84.425) Activities Allowed or Unallowed, Equipment and Real Property Management. Criteria - To ensure all expenditures charged to a program are allowable, the District should establish controls for approval of expenditures. In addition, the Minnesota Department of Education (MDE) requires all equipment purchases greater than $5,000 to receive preapproval of the equipment from MDE. Finally, all program expenditures should be coded to their specific finance and object codes to ensure accuracy of program expenditures. Condition - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Questioned Costs - None. Context - We tested 41 transactions and two of the transactions were not approved by the District. In addition, two equipment purchases greater than $5,000 did not receive pre-approval, but the equipment was approved by MDE at a later date. Budgeted expenditures in total agree with the actual expenditures, but the expenditures do not agree by object code (salary, supplies, etc.). Cause - Oversight by staff. Effect - There is an increased risk of unallowable costs being charged to grants. Repeat finding - No. Recommendation - We recommend the District obtain approvals prior to incurring the expenditures. The District should also report all expenditures to the correct finance and object code at the time the expenditure is incurred. Views of Responsible Officials and Planned Corrective Actions - The District agrees with the recommendation and will review its policies and procedures.