Audit 377057

Finding 2025-002 Lack of Internal Controls over Activities Allowed and or Unallowed and Allowable Costs/Activities – Cash Disbursements Federal Agency: U.S. Department of Education passed through the State of Alaska, Department of Education and Early Development (DEED) Federal Program(s): ARP Act: ESSER III Assistance Listing Number(s):84.425U Award Number(s): Federal award number(s): S425U210020, Pass through entity award number(s): ER 25.YFSD.01, AR.25.YFSD.01 Award Years: 2025 Type of Finding: Significant deficiency in internal control over compliance. Criteria: 2 CFR Part 200 Subpart E §200.400(d) dictate that the accounting practices of a recipient (or subrecipient) must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the Federal award. This includes ensuring there is proper supporting documentation for transactions as well as methods to document approval of the cost/activity to determine whether it is allowable under the funding requirements. Condition and Context: We tested a sample of twenty-five (25) cash disbursements for the program. We noted seven (7) credit card transactions that lacked adequate supporting documentation. We did not identify any transactions in the program that appeared to be unallowed based on the context of the transaction. Cause: Lack of internal controls related to supporting documentation for transactions charged to the programs. Effect: Lack of internal controls allows for the potential for unallowable costs to be charged to the programs. Repeat Finding: This is a repeat of Finding of 2024-005, and since it is a repeat finding, we believe this to be a systemic issue. Questioned Costs: None reported. Recommendation: We recommend that management implement stronger internal controls over cash disbursements, specifically to retaining supporting documentation. Management Response: Management concurs with this finding. See Corrective Action Plan.

Finding 2025-003 Lack of Internal Controls over Reporting Federal Agency: U.S. Department of Education Federal Program(s): Indian Education – Tribal Leaders of Tomorrow Assistance Listing Number(s):84.299A Award Number(s): S299A200024-24 Award Years: 2024 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: All recipients are required to submit an annual Grant Performance Report providing the most current performance and financial expenditure information that is sufficient to meet the reporting requirements of 2 CFR 200.328, 200.329 and 34 CFR 75.720. Yukon Flats is required to submit quarterly performance reports within 30 days after the end of each quarter. Condition and Context: The client was unable to locate the annual report that was submitted for the program. Additionally, they were unable to show that the annual report or the quarterly reports were submitted timely. Cause: Lack of internal controls related to reporting requirements and employee turnover at the District. Effect: Lack of internal controls over reporting could allow requirements to be missed that could in turn lead to a loss of funding. Repeat Finding: This is not a repeat finding. Questioned Costs: None reported. Recommendation: We recommend that management implement stronger internal controls over reporting, specifically to retaining supporting documentation of timely submission. Management Response: Management concurs with this finding. See Corrective Action Plan.