Finding Text
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