Audit 13309

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2023‐002 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Agency: Arizona Department of Education Federal Award Number: S425D200038, S425U210038, S425W210003 Pass‐Through Agency: N/A Questioned Costs: Unknown Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Criteria All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC §§ 3141‐3144, 3146, and 3147). Condition It could not be determined whether laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds were paid equal to or in excess of the prevailing wage rate for the locality. Cause The expenditures were originally not spent with Federal dollars but were later moved to a federal funding source via adjusting journal entry. As a result, the District did not inform the contractor/subcontractor of the wage rate requirements. Moreover, the District completed the ADE certifications indicating they would comply with Davis Bacon; however, they did not follow through. Effect The District did not comply with the special tests and provisions requirement of the grant. Context For one of two vendors where wage rate requirements were applicable, the District did not notify contractors and subcontractors of the requirements to comply with the wage rate requirements and did not obtain copies of certified payrolls for construction projects funded with grant monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should review Federal requirements over Davis Bacon, develop policies and procedures, and ensure those developed policies and procedures are implemented. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2023‐002 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Agency: Arizona Department of Education Federal Award Number: S425D200038, S425U210038, S425W210003 Pass‐Through Agency: N/A Questioned Costs: Unknown Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Criteria All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC §§ 3141‐3144, 3146, and 3147). Condition It could not be determined whether laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds were paid equal to or in excess of the prevailing wage rate for the locality. Cause The expenditures were originally not spent with Federal dollars but were later moved to a federal funding source via adjusting journal entry. As a result, the District did not inform the contractor/subcontractor of the wage rate requirements. Moreover, the District completed the ADE certifications indicating they would comply with Davis Bacon; however, they did not follow through. Effect The District did not comply with the special tests and provisions requirement of the grant. Context For one of two vendors where wage rate requirements were applicable, the District did not notify contractors and subcontractors of the requirements to comply with the wage rate requirements and did not obtain copies of certified payrolls for construction projects funded with grant monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should review Federal requirements over Davis Bacon, develop policies and procedures, and ensure those developed policies and procedures are implemented. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Special Education Cluster 84.027A, 84.027X, 84.173A, 84.173X H027A220007, H027X210007, H173A220003, H173X210003 None Coronavirus State and Local Fiscal Recovery Funds 21.027 GFRT‐21‐1074 GR‐ARPA‐ 100Day‐HIGLEYUSD‐ 052022‐119 and GRARPA‐ ASL‐HIGLEY‐145 Federal Agency(ies): Arizona Department of Education, Arizona Governor’s Office Pass‐Through Agency(ies): N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. All non‐procurement transactions entered into by a pass‐through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR §180.215. Condition The District did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Cause The District only performed procedures to verify vendors were not suspended or debarred for contracts that were in excess of $100,000. Effect The District was not in compliance with federal guidelines. Context For one Special Education Cluster purchase and four Coronavirus State and Local Recovery Fund purchases reviewed, the District did not maintain documentation that a suspension and debarment verification check was completed for purchases in excess of $25,000 but less than $100,000. Upon audit inquiry, a subsequent verification check was performed, and it was determined that the vendors were ultimately not suspended or debarred. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should update procurement policies to align with federal rules to verify vendors are not suspended or debarred. In addition, we recommend resources be allocated to train employees to ensure compliance with federal requirements regarding procurement. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2023‐002 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Agency: Arizona Department of Education Federal Award Number: S425D200038, S425U210038, S425W210003 Pass‐Through Agency: N/A Questioned Costs: Unknown Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Criteria All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC §§ 3141‐3144, 3146, and 3147). Condition It could not be determined whether laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds were paid equal to or in excess of the prevailing wage rate for the locality. Cause The expenditures were originally not spent with Federal dollars but were later moved to a federal funding source via adjusting journal entry. As a result, the District did not inform the contractor/subcontractor of the wage rate requirements. Moreover, the District completed the ADE certifications indicating they would comply with Davis Bacon; however, they did not follow through. Effect The District did not comply with the special tests and provisions requirement of the grant. Context For one of two vendors where wage rate requirements were applicable, the District did not notify contractors and subcontractors of the requirements to comply with the wage rate requirements and did not obtain copies of certified payrolls for construction projects funded with grant monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should review Federal requirements over Davis Bacon, develop policies and procedures, and ensure those developed policies and procedures are implemented. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2023‐002 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Agency: Arizona Department of Education Federal Award Number: S425D200038, S425U210038, S425W210003 Pass‐Through Agency: N/A Questioned Costs: Unknown Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Criteria All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC §§ 3141‐3144, 3146, and 3147). Condition It could not be determined whether laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds were paid equal to or in excess of the prevailing wage rate for the locality. Cause The expenditures were originally not spent with Federal dollars but were later moved to a federal funding source via adjusting journal entry. As a result, the District did not inform the contractor/subcontractor of the wage rate requirements. Moreover, the District completed the ADE certifications indicating they would comply with Davis Bacon; however, they did not follow through. Effect The District did not comply with the special tests and provisions requirement of the grant. Context For one of two vendors where wage rate requirements were applicable, the District did not notify contractors and subcontractors of the requirements to comply with the wage rate requirements and did not obtain copies of certified payrolls for construction projects funded with grant monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should review Federal requirements over Davis Bacon, develop policies and procedures, and ensure those developed policies and procedures are implemented. Views of Responsible Officials See Corrective Action Plan.