Criteria: The School is required to have procedures in place to ensure that federal awards are expended only for
allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are
supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR
200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal
award that provides assurance that the entity is managing the federal award in compliance with federal statutes,
regulations, and the terms and conditions of the federal award.
Condition: Various instances were identified through testing of direct expenditures and payroll transactions
where controls in place were not consistently applied or were not documented, designed, or implemented
properly to ensure compliance with requirements of each major program. A proper review of requests,
expenditures, and timesheets includes a review that assures that the summarized information is supported by
the underlying documentation, such as appropriate account coding, funding source, and/or pay rates. It was
noted that upon occasion, these reviews were performed, but not adequately, resulting in the following:
1. One instance was noted where an employee was funded under Title 1A, but received retroactive pay of
$988, which was funded by Indian School Equalization Program funds.
2. Four instances were noted where individuals qualified for overtime wages, as in total they worked more
than 80 hours during the pay period, but were paid at a rate less than 150% of their regular payrate for
hours exceeding 80, representing a net underpayment of $180.
3. One instance was noted where an individual was awarded an extracurricular stipend to coach, payable
in two installments of 50% of the total contract, but was paid $200 less than 50% in the instance that
was selected for testing.
4. Two instances were noted where an employee did not work the full 80 hours in the pay period and did
not have enough leave accumulated to be paid for the full period. In these instances the payroll clerk
applies the hour shortage as a contra to offset gross pay for the period. In these two instances, the pay
rate was not updated to reflect the proper period or change in pay rate elected by the employee,
resulting in a net underpayment of $69 in wages. 5. Four instances were identified out of 60 direct expenditures where the request for funds was for
approved for amounts lower than the value of the goods purchased. These items were not investigated
further by the school.
6. One instance was identified out of 60 expenditures, where an amount was issued for student stipends
to a chaperone, to distribute to students to attend an athletic event that did not conform with the
policies for documentation standards of the School. Thus, the total amount of this instance resulted in
$10,032 in questioned costs.
Cause: Various instances were identified through testing of direct expenditures and payroll transactions where
controls in place were not consistently applied (primarily manual controls) or were not documented, designed,
or implemented properly to ensure compliance with requirements of each major program.
Effect: Without a properly designed system of internal controls, including review and approval of all
disbursements and payroll, the School may not be able to remain compliant with laws and regulations or other
compliance requirements.
Questioned Costs: $10,032
Context: A non‐statistical sample of 60 direct expenditures were tested resulting in 1 out of 60 lacking sufficient
documentation that ISEP funds were spent in accordance with the policy. There were no similar instances
identified through testing of remaining activity stipends. 229 payroll transactions were selected for testing.
Repeat Finding from Prior Year: No.
Recommendation: We recommend that management retain documentation to support the review process was
performed.
Views of Responsible Officials: Management is in agreement.
Finding: 2022‐003
84.425 – Education Stabilization Fund
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Material Weakness in Internal Control over Compliance
Criteria: The School is required to have procedures in place to ensure that federal awards are expended only for
allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are
supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR
200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal
award that provides assurance that the entity is managing the federal award in compliance with federal statutes,
regulations, and the terms and conditions of the federal award.
Condition: Various instances were identified through testing of direct expenditures and payroll transactions
where controls in place were not consistently applied or were not documented, designed, or implemented
properly to ensure compliance with requirements of each major program. A proper review of requests,
expenditures, and timesheets includes a review that assures that the summarized information is supported by
the underlying documentation, such as appropriate account coding, funding source, and/or pay rates.
1. The School utilized COVID‐19 funding to incentivize retention of staff for the Fall and Spring Semesters.
Additionally, the School paid 25% of the employees’ wages for actual hours worked as Hazard Pay, to
encourage participation and fulfill student needs during the Pandemic. In 49 out of 358 transactions
tested that were funded using COVID‐19 funds, Hazard Pay was incorrectly or inconsistently computed
due to inconsistent application of policy, resulting in a net underpayment of wages of $504.
Cause: Various instances were identified through testing of payroll transactions where controls in place were
not consistently applied (primarily manual controls) or were not documented, designed, or implemented
properly to ensure compliance with requirements of each major program.
Effect: Without a properly designed system of internal controls, including review and approval of all
disbursements and payroll, the School may not be able to remain compliant with laws and regulations or other
compliance requirements.
Questioned Costs: None reported.
Context: A non‐statistical sample of 358 payroll transactions were selected. There were 49 instances identified
where the Hazard Pay was inconsistently computed for non‐regular pay codes 21 of those were overpaid Hazard
pay totaling $1,448, and 28 instances totaling $1,952 were underpaid out of a total sample of $162,733.
Repeat Finding from Prior Year: No.
Recommendation: We recommend that management implement procedures and control processes to comply
with the federal requirements noted above.
Views of Responsible Officials: Management is in agreement.
Criteria: The School is required to have procedures in place to ensure that federal awards are expended only for
allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are
supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR
200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal
award that provides assurance that the entity is managing the federal award in compliance with federal statutes,
regulations, and the terms and conditions of the federal award.
Condition: Various instances were identified through testing of direct expenditures and payroll transactions
where controls in place were not consistently applied or were not documented, designed, or implemented
properly to ensure compliance with requirements of each major program. A proper review of requests,
expenditures, and timesheets includes a review that assures that the summarized information is supported by
the underlying documentation, such as appropriate account coding, funding source, and/or pay rates. It was
noted that upon occasion, these reviews were performed, but not adequately, resulting in the following:
1. One instance was noted where an employee was funded under Title 1A, but received retroactive pay of
$988, which was funded by Indian School Equalization Program funds.
2. Four instances were noted where individuals qualified for overtime wages, as in total they worked more
than 80 hours during the pay period, but were paid at a rate less than 150% of their regular payrate for
hours exceeding 80, representing a net underpayment of $180.
3. One instance was noted where an individual was awarded an extracurricular stipend to coach, payable
in two installments of 50% of the total contract, but was paid $200 less than 50% in the instance that
was selected for testing.
4. Two instances were noted where an employee did not work the full 80 hours in the pay period and did
not have enough leave accumulated to be paid for the full period. In these instances the payroll clerk
applies the hour shortage as a contra to offset gross pay for the period. In these two instances, the pay
rate was not updated to reflect the proper period or change in pay rate elected by the employee,
resulting in a net underpayment of $69 in wages. 5. Four instances were identified out of 60 direct expenditures where the request for funds was for
approved for amounts lower than the value of the goods purchased. These items were not investigated
further by the school.
6. One instance was identified out of 60 expenditures, where an amount was issued for student stipends
to a chaperone, to distribute to students to attend an athletic event that did not conform with the
policies for documentation standards of the School. Thus, the total amount of this instance resulted in
$10,032 in questioned costs.
Cause: Various instances were identified through testing of direct expenditures and payroll transactions where
controls in place were not consistently applied (primarily manual controls) or were not documented, designed,
or implemented properly to ensure compliance with requirements of each major program.
Effect: Without a properly designed system of internal controls, including review and approval of all
disbursements and payroll, the School may not be able to remain compliant with laws and regulations or other
compliance requirements.
Questioned Costs: $10,032
Context: A non‐statistical sample of 60 direct expenditures were tested resulting in 1 out of 60 lacking sufficient
documentation that ISEP funds were spent in accordance with the policy. There were no similar instances
identified through testing of remaining activity stipends. 229 payroll transactions were selected for testing.
Repeat Finding from Prior Year: No.
Recommendation: We recommend that management retain documentation to support the review process was
performed.
Views of Responsible Officials: Management is in agreement.
Finding: 2022‐003
84.425 – Education Stabilization Fund
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Material Weakness in Internal Control over Compliance
Criteria: The School is required to have procedures in place to ensure that federal awards are expended only for
allowable costs in accordance with Subpart E – Cost Principles of the Uniform Guidance. Allowable costs are
supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR
200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal
award that provides assurance that the entity is managing the federal award in compliance with federal statutes,
regulations, and the terms and conditions of the federal award.
Condition: Various instances were identified through testing of direct expenditures and payroll transactions
where controls in place were not consistently applied or were not documented, designed, or implemented
properly to ensure compliance with requirements of each major program. A proper review of requests,
expenditures, and timesheets includes a review that assures that the summarized information is supported by
the underlying documentation, such as appropriate account coding, funding source, and/or pay rates.
1. The School utilized COVID‐19 funding to incentivize retention of staff for the Fall and Spring Semesters.
Additionally, the School paid 25% of the employees’ wages for actual hours worked as Hazard Pay, to
encourage participation and fulfill student needs during the Pandemic. In 49 out of 358 transactions
tested that were funded using COVID‐19 funds, Hazard Pay was incorrectly or inconsistently computed
due to inconsistent application of policy, resulting in a net underpayment of wages of $504.
Cause: Various instances were identified through testing of payroll transactions where controls in place were
not consistently applied (primarily manual controls) or were not documented, designed, or implemented
properly to ensure compliance with requirements of each major program.
Effect: Without a properly designed system of internal controls, including review and approval of all
disbursements and payroll, the School may not be able to remain compliant with laws and regulations or other
compliance requirements.
Questioned Costs: None reported.
Context: A non‐statistical sample of 358 payroll transactions were selected. There were 49 instances identified
where the Hazard Pay was inconsistently computed for non‐regular pay codes 21 of those were overpaid Hazard
pay totaling $1,448, and 28 instances totaling $1,952 were underpaid out of a total sample of $162,733.
Repeat Finding from Prior Year: No.
Recommendation: We recommend that management implement procedures and control processes to comply
with the federal requirements noted above.
Views of Responsible Officials: Management is in agreement.