Criteria: 2 CFR Part 200, subpart E. requires that costs be necessary and reasonable for the performance of the Federal award. The Minnesota Department of Education Special Education Funding Guide indicates that the only allowable costs for communication services are those which are solely for special education IEP-driven services or related to the evaluation of a child for special education services by special education personnel.

Condition: During our testing, we noted that cell phone allowances paid to special education personnel were charged to the federal program which did not meet this criteria.

## Questioned Costs: None

Context: Three of the forty-eight special education disbursements we tested were related to these cell phone allowances.

Cause: These allowances are included in the employees’ employment agreements. The District believed these costs were allowable when budgeting its expenditures for the federal program.

## Effect:

These costs did not appear to meet the criteria for allowable costs charged to the federal program.

## Repeat Finding: No

Recommendation: We recommend the District ensure that these costs are not budgeted in and charged to Federal Special Education program.

Views of responsible officials and planned corrective actions: of responsible officials and planned corrective actions: There is no disagreement with the audit finding. The District will ensure that these cell phone allowances are not charged as direct costs to the Federal Special Education program going forward.

## Finding 2018-003 – Minnesota Legal Compliance

Criteria: Minnesota Statute §471.425, requires municipalities to pay each vendor obligation according to the terms of the contract, or if no contract terms apply, within the standard payment period, which is defined as within 35 days from the date of receipt for municipalities which have regularly scheduled board meetings at least once a month.

Condition: We noted one invoice in our testing sample that was not paid by the District within the standard payment period, as defined by Minnesota Statutes.

Context: One of the twenty-five disbursements we selected for testing was not in compliance with Minnesota Statutes.

Cause: An invoice was not routed to the District’s Business Office in time to be processed and paid within the required period.

## Effect:

The District was not in compliance with state statutes related to payment of local government bills.

Recommendation: We recommend the District make every effort possible to ensure that invoices are routed to the District’s Business Office so they can be processed in a timely manner.

Views of responsible officials and planned corrective actions: of responsible officials and planned corrective actions: There is no disagreement with the audit finding. The District will communicate with all departments the importance of routing invoices to the Business Office in a timely manner. Additionally, the District will begin to stamp invoices received with a “received date” so that they have documentation of when an invoice was actually received by the District.

## Finding: 2018-004 – Financial Statement of Student Activity Accounts PROCEDURES TO PROVIDE ASSURANCE THAT ALL CASH COLLECTIONS ARE