Audit 305958

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.

Finding No.: 2022-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Special Tests and Provisions – Annual Performance Reviews Questioned Costs: $16,887 Criteria: In accordance with grant terms and conditions, all personnel funded under Education Sector and Supplemental Education Grant (SEG) are required to undergo an annual performance evaluation, and such evaluation shall be maintained as part of the personnel files and made available when requested for purposes of grant oversight or audits. Condition: For 1 (or 4%) of 25 employees tested, the annual performance evaluation for fiscal year 2022 was incomplete. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State did not effectively enforce controls over compliance with performing annual performance evaluations as stipulated in the grant awards. Effect: The State is in noncompliance with the requirement, and total questioned costs of $16,887 are reported because the projected questioned costs exceed the threshold. Recommendation: Responsible personnel should implement procedures to periodically monitor employees funded under the Program, perform the required annual performance evaluations, and maintain resulting reports on file. Views of Responsible Officials: We do not agree with the finding as the annual evaluation was performed by the teacher and his supervisor. We understand that individual evaluation points did not add up to the stated total point in the evaluation form because page 3 was blank and the addition was incorrect.Auditor Response: The annual performance evaluation provided for the selected employee did not appear complete as required by the program.