Weld County School District RE-1

2025-003: Material Weakness in Internal Controls over Compliance with Suspension and Debarment Federal Assistance Listing Number: 10.553, 10.555, and 10.582 Federal Award Year: 2025 Program Title: Child Nutrition Cluster Name of Federal Agency: U.S. Department of Agriculture Name of Pass-Through Entity: Colorado Department of Education COVID-19 Program: No Criteria: 2 CFR §200.303 requires that the grant recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control- Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Based on our sample selection of three vendors for testing, we have identified that two of the three vendors tested did not have adequate verification of suspension and debarment. Upon further testing and discussion, the District does not have internal controls in place to verify suspension and debarment on vendors that are paid greater than or equal to $25,000, as required by 2 CFR 200 for various federal awards. Upon further compliance testing, vendors in our testing were in compliance with the requirement. Without internal controls over compliance, the District may not be able to identify noncompliance with a suspended or debarred vendors in a timely manner and may incur potential questioned costs without knowledge of the noncompliance. Questioned Costs: No questioned costs have been identified. Cause: The District’s internal controls over suspension and debarment requirement were not properly designed or implemented. Effect: Without internal controls over compliance, the District may not be able to identify noncompliance with a suspended or debarred vendors in a timely manner and may incur potential questioned costs without knowledge of the noncompliance. Repeat Finding: No. Recommendation: We recommend that the District implement internal controls over the suspension and debarment requirement and add this requirement to the procurement process at the District. In addition, we recommend that the District periodically review federal expenditure reports to identify vendors that may have been paid with federal grants in excess of the $25,000 suspension and debarment threshold to prevent potential noncompliance. Corrective Action Plan: Reported on page 60.

Assistance Listing Number, Federal Agency, and Program Name - Input text Federal Award Identification Number and Year - 84.425U - COVID-19 Education Stabilization Fund Pass-through Entity - Colorado Department of Education Finding Type - Material weakness Repeat Finding - No Criteria - Under 34 CFR Section 299.2(b), the School District has to ensure that funds are used in compliance with regulatory provisions and spent only for reasonable and necessary costs of the program. The School District is required to have supporting documentation and approval of grant expenditures to ensure they are an allowable and supported cost under the grant requirements. Condition - During allowability testing it was discovered the District has no formalized review of the grant budget or expenditures charged to grant. This included expenditures related to payroll and indirect costs. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Audit procedures designated testing payroll and indirect cost samples and there was no formalized review documented before they were charged to the grant and reimbursement was requested throughout the entire population tested. Cause and Effect - Lack of controls and review surrounding expenditures charged to the grant could lead to improper expenditures being charges and noncompliance. Recommendation - It is recommended that the School District review its controls and processes to ensure that they have proper controls in place related to grant budgets and the review of expenditures being charged to the grant to ensure they are allowable. Views of Responsible Officials and Corrective Action Plan - Weld County School District RE-1 is a samll Rural District with limited personnel resources across the district, including the finance department. The School District worked to set up a formalized review process for grant budgets and expenditures charged to grants. The School District was able to implement the process at the end of FY 24. The School District will continue to use and review this process and refine it through FY25 and FY26.