Audit 384012

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 new procedures to track and maintain an inventory list adequately. However, the infrastructure items bought were not inventoried. Only non-infrastructure items were being inventoried and tracked. Cause: The internal control-related infrastructure items for the Education Stabilization Fund are nonexistent. Effect: There is noncompliance and a lack of internal control regarding the infrastructure items for the Education Stabilization Fund. Recommendations: The District should include infrastructure items in the current inventory system. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See the 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 to 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 nonexistent. Effect: There is a noncompliance and a 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 in place that require contractors performing contract work valued at more than $2,000 and paid with federal funds 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 the separate document for planned corrective actions.