Audit 8413

Finding No. 2023-004 – Internal Controls over Compliance of Federal Awards (Partial Repeat 2022-005 and 2021-007) Federal Program Name: Education Stabilization Funds (Elementary and Secondary School Emergency Relief Fund Project Number: N/A CFDA Number: 84.425D and 84.425U Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 2, subpart E – the District must receive prior approval from the SEA (ISBE) for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. 2 CFR Part 4, Wage Rate Requirements – Recipients of ESF funds for minor remodeling, renovation, or construction contracts that are over $2,000 and use laborers and mechanics must meet Davis-Bacon prevailing wage requirements. Condition: 1) During testing of compliance over disbursements, we noted the following: a. Eight (8) transactions totaling $474,924 appeared to be for capital purchases that did not have prior approval by the SEA b. Six (6) transactions totaling $52,117 were incurred where the District appeared to be subject to Davis-Bacon prevailing wage requirements but no documentation was retained. Additionally, a formal policy for complying with Davis-Bacon requirements is not in place for individual expenditures less than $25,000. 2) During testing of compliance over reporting, we noted the following: a. Expenditure reports were completed based on budgeted amounts rather than actual expenditures. In total, expenditure reports exceeded amounts reported in the District’s general ledger by $726,653. Questioned Costs: 1) N/A 2) $726,653 Context: 1) a. 8 exceptions of 60 transactions tested b. 6 exceptions of 60 transactions tested 2) Expenditure reports for ESSER programs totaled $3,411,524 for expenditures claimed for reimbursement while the District’s general ledger indicated $2,684,871 of ESSER-related expenditures. Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation

Finding No. 2023-004 – Internal Controls over Compliance of Federal Awards (Partial Repeat 2022-005 and 2021-007) Federal Program Name: Education Stabilization Funds (Elementary and Secondary School Emergency Relief Fund Project Number: N/A CFDA Number: 84.425D and 84.425U Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 2, subpart E – the District must receive prior approval from the SEA (ISBE) for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. 2 CFR Part 4, Wage Rate Requirements – Recipients of ESF funds for minor remodeling, renovation, or construction contracts that are over $2,000 and use laborers and mechanics must meet Davis-Bacon prevailing wage requirements. Condition: 1) During testing of compliance over disbursements, we noted the following: a. Eight (8) transactions totaling $474,924 appeared to be for capital purchases that did not have prior approval by the SEA b. Six (6) transactions totaling $52,117 were incurred where the District appeared to be subject to Davis-Bacon prevailing wage requirements but no documentation was retained. Additionally, a formal policy for complying with Davis-Bacon requirements is not in place for individual expenditures less than $25,000. 2) During testing of compliance over reporting, we noted the following: a. Expenditure reports were completed based on budgeted amounts rather than actual expenditures. In total, expenditure reports exceeded amounts reported in the District’s general ledger by $726,653. Questioned Costs: 1) N/A 2) $726,653 Context: 1) a. 8 exceptions of 60 transactions tested b. 6 exceptions of 60 transactions tested 2) Expenditure reports for ESSER programs totaled $3,411,524 for expenditures claimed for reimbursement while the District’s general ledger indicated $2,684,871 of ESSER-related expenditures. Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation

Finding No. 2023-004 – Internal Controls over Compliance of Federal Awards (Partial Repeat 2022-005 and 2021-007) Federal Program Name: Education Stabilization Funds (Elementary and Secondary School Emergency Relief Fund Project Number: N/A CFDA Number: 84.425D and 84.425U Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 2, subpart E – the District must receive prior approval from the SEA (ISBE) for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. 2 CFR Part 4, Wage Rate Requirements – Recipients of ESF funds for minor remodeling, renovation, or construction contracts that are over $2,000 and use laborers and mechanics must meet Davis-Bacon prevailing wage requirements. Condition: 1) During testing of compliance over disbursements, we noted the following: a. Eight (8) transactions totaling $474,924 appeared to be for capital purchases that did not have prior approval by the SEA b. Six (6) transactions totaling $52,117 were incurred where the District appeared to be subject to Davis-Bacon prevailing wage requirements but no documentation was retained. Additionally, a formal policy for complying with Davis-Bacon requirements is not in place for individual expenditures less than $25,000. 2) During testing of compliance over reporting, we noted the following: a. Expenditure reports were completed based on budgeted amounts rather than actual expenditures. In total, expenditure reports exceeded amounts reported in the District’s general ledger by $726,653. Questioned Costs: 1) N/A 2) $726,653 Context: 1) a. 8 exceptions of 60 transactions tested b. 6 exceptions of 60 transactions tested 2) Expenditure reports for ESSER programs totaled $3,411,524 for expenditures claimed for reimbursement while the District’s general ledger indicated $2,684,871 of ESSER-related expenditures. Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation

Finding No. 2023-004 – Internal Controls over Compliance of Federal Awards (Partial Repeat 2022-005 and 2021-007) Federal Program Name: Education Stabilization Funds (Elementary and Secondary School Emergency Relief Fund Project Number: N/A CFDA Number: 84.425D and 84.425U Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 2, subpart E – the District must receive prior approval from the SEA (ISBE) for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. 2 CFR Part 4, Wage Rate Requirements – Recipients of ESF funds for minor remodeling, renovation, or construction contracts that are over $2,000 and use laborers and mechanics must meet Davis-Bacon prevailing wage requirements. Condition: 1) During testing of compliance over disbursements, we noted the following: a. Eight (8) transactions totaling $474,924 appeared to be for capital purchases that did not have prior approval by the SEA b. Six (6) transactions totaling $52,117 were incurred where the District appeared to be subject to Davis-Bacon prevailing wage requirements but no documentation was retained. Additionally, a formal policy for complying with Davis-Bacon requirements is not in place for individual expenditures less than $25,000. 2) During testing of compliance over reporting, we noted the following: a. Expenditure reports were completed based on budgeted amounts rather than actual expenditures. In total, expenditure reports exceeded amounts reported in the District’s general ledger by $726,653. Questioned Costs: 1) N/A 2) $726,653 Context: 1) a. 8 exceptions of 60 transactions tested b. 6 exceptions of 60 transactions tested 2) Expenditure reports for ESSER programs totaled $3,411,524 for expenditures claimed for reimbursement while the District’s general ledger indicated $2,684,871 of ESSER-related expenditures. Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation

Finding No. 2023-005 – Internal Controls over Compliance of Federal Awards Federal Program Name: Coronavirus State and Local Recovery Funds Project Number: N/A CFDA Number: 21.027 Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of compliance over disbursements, we noted the following: 1) Five (5) instances where employees received pay rates in excess of three hundred percent of their normal pay rates received from unrestricted funds. 2) Fifteen (15) instances were noted where salaries were allocated to this program without documentation of time and effort. Questioned Costs: 1) N/A 2) N/A Context: 1) 5 exceptions of the total 40 payroll transactions tested 2) 15 exceptions of the total 40 payroll transactions tested Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation.

Finding No. 2023-004 – Internal Controls over Compliance of Federal Awards (Partial Repeat 2022-005 and 2021-007) Federal Program Name: Education Stabilization Funds (Elementary and Secondary School Emergency Relief Fund Project Number: N/A CFDA Number: 84.425D and 84.425U Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 2, subpart E – the District must receive prior approval from the SEA (ISBE) for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. 2 CFR Part 4, Wage Rate Requirements – Recipients of ESF funds for minor remodeling, renovation, or construction contracts that are over $2,000 and use laborers and mechanics must meet Davis-Bacon prevailing wage requirements. Condition: 1) During testing of compliance over disbursements, we noted the following: a. Eight (8) transactions totaling $474,924 appeared to be for capital purchases that did not have prior approval by the SEA b. Six (6) transactions totaling $52,117 were incurred where the District appeared to be subject to Davis-Bacon prevailing wage requirements but no documentation was retained. Additionally, a formal policy for complying with Davis-Bacon requirements is not in place for individual expenditures less than $25,000. 2) During testing of compliance over reporting, we noted the following: a. Expenditure reports were completed based on budgeted amounts rather than actual expenditures. In total, expenditure reports exceeded amounts reported in the District’s general ledger by $726,653. Questioned Costs: 1) N/A 2) $726,653 Context: 1) a. 8 exceptions of 60 transactions tested b. 6 exceptions of 60 transactions tested 2) Expenditure reports for ESSER programs totaled $3,411,524 for expenditures claimed for reimbursement while the District’s general ledger indicated $2,684,871 of ESSER-related expenditures. Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation

Finding No. 2023-004 – Internal Controls over Compliance of Federal Awards (Partial Repeat 2022-005 and 2021-007) Federal Program Name: Education Stabilization Funds (Elementary and Secondary School Emergency Relief Fund Project Number: N/A CFDA Number: 84.425D and 84.425U Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 2, subpart E – the District must receive prior approval from the SEA (ISBE) for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. 2 CFR Part 4, Wage Rate Requirements – Recipients of ESF funds for minor remodeling, renovation, or construction contracts that are over $2,000 and use laborers and mechanics must meet Davis-Bacon prevailing wage requirements. Condition: 1) During testing of compliance over disbursements, we noted the following: a. Eight (8) transactions totaling $474,924 appeared to be for capital purchases that did not have prior approval by the SEA b. Six (6) transactions totaling $52,117 were incurred where the District appeared to be subject to Davis-Bacon prevailing wage requirements but no documentation was retained. Additionally, a formal policy for complying with Davis-Bacon requirements is not in place for individual expenditures less than $25,000. 2) During testing of compliance over reporting, we noted the following: a. Expenditure reports were completed based on budgeted amounts rather than actual expenditures. In total, expenditure reports exceeded amounts reported in the District’s general ledger by $726,653. Questioned Costs: 1) N/A 2) $726,653 Context: 1) a. 8 exceptions of 60 transactions tested b. 6 exceptions of 60 transactions tested 2) Expenditure reports for ESSER programs totaled $3,411,524 for expenditures claimed for reimbursement while the District’s general ledger indicated $2,684,871 of ESSER-related expenditures. Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation

Finding No. 2023-004 – Internal Controls over Compliance of Federal Awards (Partial Repeat 2022-005 and 2021-007) Federal Program Name: Education Stabilization Funds (Elementary and Secondary School Emergency Relief Fund Project Number: N/A CFDA Number: 84.425D and 84.425U Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 2, subpart E – the District must receive prior approval from the SEA (ISBE) for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. 2 CFR Part 4, Wage Rate Requirements – Recipients of ESF funds for minor remodeling, renovation, or construction contracts that are over $2,000 and use laborers and mechanics must meet Davis-Bacon prevailing wage requirements. Condition: 1) During testing of compliance over disbursements, we noted the following: a. Eight (8) transactions totaling $474,924 appeared to be for capital purchases that did not have prior approval by the SEA b. Six (6) transactions totaling $52,117 were incurred where the District appeared to be subject to Davis-Bacon prevailing wage requirements but no documentation was retained. Additionally, a formal policy for complying with Davis-Bacon requirements is not in place for individual expenditures less than $25,000. 2) During testing of compliance over reporting, we noted the following: a. Expenditure reports were completed based on budgeted amounts rather than actual expenditures. In total, expenditure reports exceeded amounts reported in the District’s general ledger by $726,653. Questioned Costs: 1) N/A 2) $726,653 Context: 1) a. 8 exceptions of 60 transactions tested b. 6 exceptions of 60 transactions tested 2) Expenditure reports for ESSER programs totaled $3,411,524 for expenditures claimed for reimbursement while the District’s general ledger indicated $2,684,871 of ESSER-related expenditures. Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation

Finding No. 2023-004 – Internal Controls over Compliance of Federal Awards (Partial Repeat 2022-005 and 2021-007) Federal Program Name: Education Stabilization Funds (Elementary and Secondary School Emergency Relief Fund Project Number: N/A CFDA Number: 84.425D and 84.425U Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR Part 2, subpart E – the District must receive prior approval from the SEA (ISBE) for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. 2 CFR Part 4, Wage Rate Requirements – Recipients of ESF funds for minor remodeling, renovation, or construction contracts that are over $2,000 and use laborers and mechanics must meet Davis-Bacon prevailing wage requirements. Condition: 1) During testing of compliance over disbursements, we noted the following: a. Eight (8) transactions totaling $474,924 appeared to be for capital purchases that did not have prior approval by the SEA b. Six (6) transactions totaling $52,117 were incurred where the District appeared to be subject to Davis-Bacon prevailing wage requirements but no documentation was retained. Additionally, a formal policy for complying with Davis-Bacon requirements is not in place for individual expenditures less than $25,000. 2) During testing of compliance over reporting, we noted the following: a. Expenditure reports were completed based on budgeted amounts rather than actual expenditures. In total, expenditure reports exceeded amounts reported in the District’s general ledger by $726,653. Questioned Costs: 1) N/A 2) $726,653 Context: 1) a. 8 exceptions of 60 transactions tested b. 6 exceptions of 60 transactions tested 2) Expenditure reports for ESSER programs totaled $3,411,524 for expenditures claimed for reimbursement while the District’s general ledger indicated $2,684,871 of ESSER-related expenditures. Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation

Finding No. 2023-005 – Internal Controls over Compliance of Federal Awards Federal Program Name: Coronavirus State and Local Recovery Funds Project Number: N/A CFDA Number: 21.027 Passed Through: Illinois State Board of Education Federal Agency: U.S. Department of Education Criteria/Specific Requirement: 2 CFR 200.303 – Internal Controls, requires the District to establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: During testing of compliance over disbursements, we noted the following: 1) Five (5) instances where employees received pay rates in excess of three hundred percent of their normal pay rates received from unrestricted funds. 2) Fifteen (15) instances were noted where salaries were allocated to this program without documentation of time and effort. Questioned Costs: 1) N/A 2) N/A Context: 1) 5 exceptions of the total 40 payroll transactions tested 2) 15 exceptions of the total 40 payroll transactions tested Effect: 1) The lack of proper internal controls of disbursements could result in the District paying for unallowable expenditures from the grant funds. 2) Noncompliance with grant agreement. Cause: Lack of proper oversight by District personnel. Recommendation: We recommend that the District appoint an individual that is knowledgeable, or provide the appropriate training, of the federal compliance requirements set forth in the Code of Federal Regulation to oversee the District’s federal programs to ensure the District is in compliance with all applicable federal compliance requirements. Management’s Response: The District is working to implement that the auditor’s recommendation.