Audit 395714

Finding #2025-001: Internal Controls over Payroll Federal Program Affected: Title I ALN #84.010A Compliance Requirement: Allowable Costs/Activities Allowed Questioned Costs: None Condition and Cause: Two employees were not paid for overtime hours worked because of an error in payroll processing. Criteria and Effect: The error resulted in an underpayment of $281 to the employees. Repeat Finding from Prior Year: No Recommendation: The School should review and reconcile timesheets to payroll registers prior to processing payroll. Response/Corrective Action Plan: The School agrees with the above Finding. See Correction Action Plan.

Finding #2025-002: Allowable Costs Charged to Administrative Cost Grants for Indian Schools Federal Program Affected: Administrative Cost Grants for Indian Schools, ALN 15.046 Compliance Requirement: Allowable Costs/Activities Allowed Questioned Costs: Yes. See table below for amounts charged to Board Services for the year ended June 30, 2025. Stipend $165,119 Bonus 51,435 Social Security/Medicare 16,582 Health Insurance 1,684 2% Fee 5 Board Expenses 20,619 Travel/Training 69,805 Total $325,249 Condition and Cause: During our engagement, we were made aware of expenditures to board members that were charged to Administrative Cost Grants for Indian Schools that may not be reasonable and necessary under applicable cost principles contained in 2 CFR Part 200, Subpart E. Specifically, the School charged $325,249 of payments to the federal program, consisting of board stipends, travel reimbursements, per diem payments, bonus, and fringe benefits. The School’s internal policy is to pay board members $250 per board meeting. Total expenditures under the Administrative Cost Grants for Indian School for the year ended June 30, 2025 were $994,330. We tested $152,104 of expenditures based audit sampling guidance. All expenditures tested were supported by underlying documentation such as approved payroll registers or invoices. Additionally, all payroll registers or invoices indicated multiple levels of review and approval. Criteria and Effect: Uniform Guidance, in 2 CFR Part 200, Subpart E establishes the rules for determining allowability of costs chargeable to federal awards, ensuring they are necessary, reasonable, allocable, and documented. Repeat Finding from Prior Year: No Recommendation: Expenditures made to board members should be reviewed for compliance under the Uniform Guidance, specifically, 2 CFR Part 200, Subpart E. Additionally, training for those reviewing and approving board payments should be provided. The board may also consider an anonymous whistleblower reporting hotline to provide employees or others with an option to anonymously report impropriety. Response/Corrective Action Plan: The School agrees with the above Finding. See Correction Action Plan.