Finding Number: 2024‐001 Repeat Finding: Yes – 2023‐001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Title I Grants to Local Educational Agencies 84.010 S010A230003 $0 Education Stabilization Fund 84.425C S425D200038 $0 Education Stabilization Fund 84.425D S425D200038 $0 Education Stabilization Fund 84.425D S425D210038 $0 Education Stabilization Fund 84.425U S425U210038 $2,477 Education Stabilization Fund 84.425W S425W210003 $0 Federal Agency: U.S. Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria In accordance with 2 CFR Part 200.303, the District is responsible for establishing and maintaining effective internal control over the Federal award 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 The District did not maintain effective internal control over activities allowed or unallowed and allowable costs/cost principles for several grants. Cause The District’s grant budgets were not approved until well after the beginning of each grant’s period of performance. Additionally, the District did not verify actual spending was within approved budgets, and, therefore, did not submit for budget revisions or manage available resources in a timely or effective manner. Effect The District was not in compliance with 2 CFR Part 200.303.Context Journal entries reviewed for the Title I Grants to Local Educational Agencies program and the American Rescue Plan ‐ Elementary and Secondary School Emergency Relief (ARP ESSER) grant within the Education Stabilization Fund were to correct consistent, pervasive, and material grant overexpenditures. In particular, for ARP ESSER, the District posted 533 adjusting journal entries totaling in excess of $25.0 million during fiscal year 2023‐24 moving expenditures to and from the grant, and at times, not identifying specific underlying transactions during such movement. The volume and dollar value of the entries indicate a severe internal control deficiency this late in the lifecycle of the ARP ESSER grant. There was no consistent plan, budget, or management of the ARP ESSER monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should provide training for those with grants management responsibilities. In particular, the District should provide training on the relationship between the District’s accounting records and the State’s grants management enterprise to ensure grant budgets are not overexpended going forward. The District should also have more consistent and timely oversight of grants by higher level management. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: Yes – 2023‐001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Title I Grants to Local Educational Agencies 84.010 S010A230003 $0 Education Stabilization Fund 84.425C S425D200038 $0 Education Stabilization Fund 84.425D S425D200038 $0 Education Stabilization Fund 84.425D S425D210038 $0 Education Stabilization Fund 84.425U S425U210038 $2,477 Education Stabilization Fund 84.425W S425W210003 $0 Federal Agency: U.S. Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria In accordance with 2 CFR Part 200.303, the District is responsible for establishing and maintaining effective internal control over the Federal award 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 The District did not maintain effective internal control over activities allowed or unallowed and allowable costs/cost principles for several grants. Cause The District’s grant budgets were not approved until well after the beginning of each grant’s period of performance. Additionally, the District did not verify actual spending was within approved budgets, and, therefore, did not submit for budget revisions or manage available resources in a timely or effective manner. Effect The District was not in compliance with 2 CFR Part 200.303.Context Journal entries reviewed for the Title I Grants to Local Educational Agencies program and the American Rescue Plan ‐ Elementary and Secondary School Emergency Relief (ARP ESSER) grant within the Education Stabilization Fund were to correct consistent, pervasive, and material grant overexpenditures. In particular, for ARP ESSER, the District posted 533 adjusting journal entries totaling in excess of $25.0 million during fiscal year 2023‐24 moving expenditures to and from the grant, and at times, not identifying specific underlying transactions during such movement. The volume and dollar value of the entries indicate a severe internal control deficiency this late in the lifecycle of the ARP ESSER grant. There was no consistent plan, budget, or management of the ARP ESSER monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should provide training for those with grants management responsibilities. In particular, the District should provide training on the relationship between the District’s accounting records and the State’s grants management enterprise to ensure grant budgets are not overexpended going forward. The District should also have more consistent and timely oversight of grants by higher level management. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: Yes – 2023‐001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Title I Grants to Local Educational Agencies 84.010 S010A230003 $0 Education Stabilization Fund 84.425C S425D200038 $0 Education Stabilization Fund 84.425D S425D200038 $0 Education Stabilization Fund 84.425D S425D210038 $0 Education Stabilization Fund 84.425U S425U210038 $2,477 Education Stabilization Fund 84.425W S425W210003 $0 Federal Agency: U.S. Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria In accordance with 2 CFR Part 200.303, the District is responsible for establishing and maintaining effective internal control over the Federal award 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 The District did not maintain effective internal control over activities allowed or unallowed and allowable costs/cost principles for several grants. Cause The District’s grant budgets were not approved until well after the beginning of each grant’s period of performance. Additionally, the District did not verify actual spending was within approved budgets, and, therefore, did not submit for budget revisions or manage available resources in a timely or effective manner. Effect The District was not in compliance with 2 CFR Part 200.303.Context Journal entries reviewed for the Title I Grants to Local Educational Agencies program and the American Rescue Plan ‐ Elementary and Secondary School Emergency Relief (ARP ESSER) grant within the Education Stabilization Fund were to correct consistent, pervasive, and material grant overexpenditures. In particular, for ARP ESSER, the District posted 533 adjusting journal entries totaling in excess of $25.0 million during fiscal year 2023‐24 moving expenditures to and from the grant, and at times, not identifying specific underlying transactions during such movement. The volume and dollar value of the entries indicate a severe internal control deficiency this late in the lifecycle of the ARP ESSER grant. There was no consistent plan, budget, or management of the ARP ESSER monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should provide training for those with grants management responsibilities. In particular, the District should provide training on the relationship between the District’s accounting records and the State’s grants management enterprise to ensure grant budgets are not overexpended going forward. The District should also have more consistent and timely oversight of grants by higher level management. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: Yes – 2023‐001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Title I Grants to Local Educational Agencies 84.010 S010A230003 $0 Education Stabilization Fund 84.425C S425D200038 $0 Education Stabilization Fund 84.425D S425D200038 $0 Education Stabilization Fund 84.425D S425D210038 $0 Education Stabilization Fund 84.425U S425U210038 $2,477 Education Stabilization Fund 84.425W S425W210003 $0 Federal Agency: U.S. Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria In accordance with 2 CFR Part 200.303, the District is responsible for establishing and maintaining effective internal control over the Federal award 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 The District did not maintain effective internal control over activities allowed or unallowed and allowable costs/cost principles for several grants. Cause The District’s grant budgets were not approved until well after the beginning of each grant’s period of performance. Additionally, the District did not verify actual spending was within approved budgets, and, therefore, did not submit for budget revisions or manage available resources in a timely or effective manner. Effect The District was not in compliance with 2 CFR Part 200.303.Context Journal entries reviewed for the Title I Grants to Local Educational Agencies program and the American Rescue Plan ‐ Elementary and Secondary School Emergency Relief (ARP ESSER) grant within the Education Stabilization Fund were to correct consistent, pervasive, and material grant overexpenditures. In particular, for ARP ESSER, the District posted 533 adjusting journal entries totaling in excess of $25.0 million during fiscal year 2023‐24 moving expenditures to and from the grant, and at times, not identifying specific underlying transactions during such movement. The volume and dollar value of the entries indicate a severe internal control deficiency this late in the lifecycle of the ARP ESSER grant. There was no consistent plan, budget, or management of the ARP ESSER monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should provide training for those with grants management responsibilities. In particular, the District should provide training on the relationship between the District’s accounting records and the State’s grants management enterprise to ensure grant budgets are not overexpended going forward. The District should also have more consistent and timely oversight of grants by higher level management. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: Yes – 2023‐001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Title I Grants to Local Educational Agencies 84.010 S010A230003 $0 Education Stabilization Fund 84.425C S425D200038 $0 Education Stabilization Fund 84.425D S425D200038 $0 Education Stabilization Fund 84.425D S425D210038 $0 Education Stabilization Fund 84.425U S425U210038 $2,477 Education Stabilization Fund 84.425W S425W210003 $0 Federal Agency: U.S. Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria In accordance with 2 CFR Part 200.303, the District is responsible for establishing and maintaining effective internal control over the Federal award 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 The District did not maintain effective internal control over activities allowed or unallowed and allowable costs/cost principles for several grants. Cause The District’s grant budgets were not approved until well after the beginning of each grant’s period of performance. Additionally, the District did not verify actual spending was within approved budgets, and, therefore, did not submit for budget revisions or manage available resources in a timely or effective manner. Effect The District was not in compliance with 2 CFR Part 200.303.Context Journal entries reviewed for the Title I Grants to Local Educational Agencies program and the American Rescue Plan ‐ Elementary and Secondary School Emergency Relief (ARP ESSER) grant within the Education Stabilization Fund were to correct consistent, pervasive, and material grant overexpenditures. In particular, for ARP ESSER, the District posted 533 adjusting journal entries totaling in excess of $25.0 million during fiscal year 2023‐24 moving expenditures to and from the grant, and at times, not identifying specific underlying transactions during such movement. The volume and dollar value of the entries indicate a severe internal control deficiency this late in the lifecycle of the ARP ESSER grant. There was no consistent plan, budget, or management of the ARP ESSER monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should provide training for those with grants management responsibilities. In particular, the District should provide training on the relationship between the District’s accounting records and the State’s grants management enterprise to ensure grant budgets are not overexpended going forward. The District should also have more consistent and timely oversight of grants by higher level management. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: Yes – 2023‐001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Title I Grants to Local Educational Agencies 84.010 S010A230003 $0 Education Stabilization Fund 84.425C S425D200038 $0 Education Stabilization Fund 84.425D S425D200038 $0 Education Stabilization Fund 84.425D S425D210038 $0 Education Stabilization Fund 84.425U S425U210038 $2,477 Education Stabilization Fund 84.425W S425W210003 $0 Federal Agency: U.S. Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria In accordance with 2 CFR Part 200.303, the District is responsible for establishing and maintaining effective internal control over the Federal award 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 The District did not maintain effective internal control over activities allowed or unallowed and allowable costs/cost principles for several grants. Cause The District’s grant budgets were not approved until well after the beginning of each grant’s period of performance. Additionally, the District did not verify actual spending was within approved budgets, and, therefore, did not submit for budget revisions or manage available resources in a timely or effective manner. Effect The District was not in compliance with 2 CFR Part 200.303.Context Journal entries reviewed for the Title I Grants to Local Educational Agencies program and the American Rescue Plan ‐ Elementary and Secondary School Emergency Relief (ARP ESSER) grant within the Education Stabilization Fund were to correct consistent, pervasive, and material grant overexpenditures. In particular, for ARP ESSER, the District posted 533 adjusting journal entries totaling in excess of $25.0 million during fiscal year 2023‐24 moving expenditures to and from the grant, and at times, not identifying specific underlying transactions during such movement. The volume and dollar value of the entries indicate a severe internal control deficiency this late in the lifecycle of the ARP ESSER grant. There was no consistent plan, budget, or management of the ARP ESSER monies. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should provide training for those with grants management responsibilities. In particular, the District should provide training on the relationship between the District’s accounting records and the State’s grants management enterprise to ensure grant budgets are not overexpended going forward. The District should also have more consistent and timely oversight of grants by higher level management. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐002 Repeat Finding: Yes ‐ 2023‐002 Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Agency: U.S. Department of Education Federal Award Number: S425U210038 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Reporting Criteria Districts that received Education Stabilization Fund funding were required by the Arizona Department of Education to complete the “LEA Uses of ESSER I, II, & III – Use of Funds Detail” report by May 10, 2024. The report was based on fiscal year 2022‐23 financial information and full‐time equivalency (FTE) information. Condition Inadequate internal controls existed over the Education Stabilization Fund reporting processes. Cause The District did not develop nor implement strong internal controls over reporting due to lack of training for individuals with reporting responsibilities. Effect The District is at risk of reporting inaccurate information. Context The District was unable to provide supporting documentation for the allocation of expenditures to the four categories listed in the report. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should develop or implement strong internal controls over reporting to reduce the risk of reporting inaccurate information. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐003 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Agency: U.S. Department of Education Federal Award Number: S425U210038 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Reporting Criteria The Arizona Department of Education (ADE) requires Districts to submit a completion report through the ADE grants management system. Completion reports are required for all grants, must be submitted to ADE within 90 days after the grant end date, and must agree to the underlying accounting records. Condition Inadequate internal controls existed over the preparation of the completion report for the American Rescue Plan ‐ Elementary and Secondary School Emergency Relief (ARP ESSER) grant within the Education Stabilization Fund. Cause The District did not develop nor implement strong internal controls over reporting due to lack of training for individuals with reporting responsibilities and lack of timely management of grant expenditures. Effect The District is at risk of reporting inaccurate information. Context The District reported $10.6 million of equipment expenditures in the completion report, which agreed in total to the accounting records. However, the detail by object code presented in the completion report did not agree to the underlying accounting records. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should develop or implement strong internal controls over reporting to reduce the risk of reporting inaccurate information to ADE. Views of Responsible Officials See Corrective Action Plan.