Audit 336276

SIGNIFICANT DEFICENCY Internal Controls and Compliance Criteria: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.303 “the non-federal entity must establish and maintain effective internal control over the Federal aware that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: When investigating the controls related to equipment management, we became aware that the District has implemented an inbound procedure for recording newly purchased equipment. The current control system in place for the equipment does not include a yearly physical inventory. Cause: The internal control related to equipment maintenance after its initial receipt for Education Stabilization Fund is non-existent. Effect: There is a noncompliance and lack of internal control related to continued maintenance of the equipment for the Education Stabilization Fund. Recommendations: The District should, on at least a yearly basis, perform a physical inventory of the equipment. The procedure must be adequately recorded and disclosed to include the name of the individual performing the service, the date, condition of the equipment, and verify its location. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.

SIGNIFICANT DEFICENCY Internal Controls and Compliance Criteria: Nonfederal entities shall include in their construction contracts subject to the Wage rate requirements, a requirement for the contractor to submit the nonfederal entity weekly, for each week in which any contract is performed, a copy of the payroll and a statement of compliance as required by 2 CFR sections 5.5 and 5.6 Condition: Tatro Plumbing, Inc. did not submit weekly, for each week in which their contract work was performed, a copy of their payroll and a statement of compliance with the Wage Rate Requirements. Cause: The controls related to payroll paid under the Wage Rate Requirements are non-existent. Effect: There is a noncompliance and lack of internal control related to Wage Rate Requirements for construction contracts greater than $2,000 for the Education Stabilization Fund. Recommendations: The District should put controls into place that will require contractors, performing contract work greater than $2,000 and paid with federal monies, to submit the required payroll reports, per the Wage Rate Requirements, throughout the contract work. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.

SIGNIFICANT DEFICENCY Internal Controls and Compliance Criteria: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.303 “the non-federal entity must establish and maintain effective internal control over the Federal aware that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition: When investigating the controls related to equipment management, we became aware that the District has implemented an inbound procedure for recording newly purchased equipment. The current control system in place for the equipment does not include a yearly physical inventory. Cause: The internal control related to equipment maintenance after its initial receipt for Education Stabilization Fund is non-existent. Effect: There is a noncompliance and lack of internal control related to continued maintenance of the equipment for the Education Stabilization Fund. Recommendations: The District should, on at least a yearly basis, perform a physical inventory of the equipment. The procedure must be adequately recorded and disclosed to include the name of the individual performing the service, the date, condition of the equipment, and verify its location. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.

SIGNIFICANT DEFICENCY Internal Controls and Compliance Criteria: Nonfederal entities shall include in their construction contracts subject to the Wage rate requirements, a requirement for the contractor to submit the nonfederal entity weekly, for each week in which any contract is performed, a copy of the payroll and a statement of compliance as required by 2 CFR sections 5.5 and 5.6 Condition: Tatro Plumbing, Inc. did not submit weekly, for each week in which their contract work was performed, a copy of their payroll and a statement of compliance with the Wage Rate Requirements. Cause: The controls related to payroll paid under the Wage Rate Requirements are non-existent. Effect: There is a noncompliance and lack of internal control related to Wage Rate Requirements for construction contracts greater than $2,000 for the Education Stabilization Fund. Recommendations: The District should put controls into place that will require contractors, performing contract work greater than $2,000 and paid with federal monies, to submit the required payroll reports, per the Wage Rate Requirements, throughout the contract work. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.