Audit 385240

Finding #2025-003; Distance Learning and Telemedicine – ALN No. 10.855; Year Ended June 30, 2025 CONDITION: Grant funds advanced to the District were not disbursed by the District in a timely manner. CRITERIA: In accordance with the Uniform Guidance Compliance Supplement, Part III, Section C “Cash Management”, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement for direct program or project costs. CAUSE: The District delayed payment of invoices due to receipt of faulty and incorrect products in order to ensure correction by the company. EFFECT: The retention of grant funds led to interest earned on federal funds in excess of $500. QUESTIONED COSTS: None PROPER PERSPECTIVE (SAMPLING): The District received funds in advance of payment of invoices twice during fiscal year 2024-25. 100% of the receipts were tested for compliance. The audit sample was statistically valid. REPEAT FINDING: No RECOMMENDATION: We recommend management contact the Grantor to determine necessary actions in response to the excess interest earned on federal funds, including the potential return of earnings to the grant agency. MANAGEMENT RESPONSE: Management agrees with the recommendation and will contact the grant agency to determine required corrective actions, if any.

Finding #2025-004; Distance Learning and Telemedicine – ALN No. 10.855; Year Ended June 30, 2025 CONDITION: The District’s internal control over compliance failed to ensure timely distribution of advanced federal grant funds. CRITERIA: Internal controls over federal programs and adherence to the District’s policies are to be sufficient to ensure compliance with grant requirements, as discussed in Compliance Finding 2025-003. CAUSE: The cause of the internal control deficiency over compliance was the failure to adhere to the District’s established cash management policy. EFFECT: The effect of this deficiency is that internal controls over cash management are not functioning as designed, and grant funds were held for an excessive period of time prior to disbursement for payment of invoices. RECOMMENDATION: We recommend that the District follow its established cash management policy to attempt to expend all advances of federal funds within seventy-two (72) hours of receipt. Further, advances of funds should be requested only when payment is anticipated and after discrepancies with products received have been corrected to mitigate the amount of time grant funds are held prior to disbursement. MANAGEMENT RESPONSE: Management agrees with the recommendation. The District will follow the cash management policy and ensure timely disbursement of advanced federal funds. Further, the District will monitor the submission of requests for funds to correspond with anticipated payment of invoices.