Audit 395765

AL 15.042: Indian School Equalization & AL 84.010: Title I – Activities Allowed or Unallowed – Significant Deficiency Criteria Per Uniform Guidance (2 CFR Part 200.430), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls that ensures payroll costs charged to federal awards are reasonable, allocable, and properly documented. Budget estimates may be used for interim accounting purposes but must be reconciled to actual activity and adjusted as necessary. Condition During our testing of payroll expenditures, we noted that payroll costs for employees were charged based on budgeted percentage allocations rather than actual time worked on the program. The auditee did not perform periodic reconciliations of the budgeted percentages to employees’ actual activities. Additionally, budgeted payroll percentages were charged incorrectly as described below. Title I: One payroll transaction was not allocated in accordance with the budgeted percentage that was in the budget that is submitted to the grant. ISEP: One payroll transaction was not allocated in accordance with the budgeted percentage that was in the budget that is submitted to the grant. Another transaction was missing the supporting timesheet. Cause The auditee does not have adequate internal controls in place to ensure payroll costs charged to federal programs are periodically reviewed and adjusted to reflect actual work performed. Management indicated that payroll allocations were established at the beginning of the grant period and were not subsequently reconciled to actual staff activity. Effect As a result, payroll costs charged to the federal award may not accurately reflect the actual level of effort devoted to the program, resulting in a risk that costs charged to the federal program could be unallowable or not allocable under federal regulations. Questioned Costs None identified. However, due to the lack of documentation supporting actual time worked, we were unable to determine whether the payroll charges tested were fully supported. Repeat Finding This is a new finding in the current year. Recommendation We recommend that the auditee implement procedures to ensure payroll costs charged to federal awards are supported by records that accurately reflect the work performed. Such procedures should include: - Maintaining appropriate personnel activity or equivalent documentation reflecting actual work performed. - Performing periodic reconciliations between budgeted allocations and actual staff activity. - Adjusting payroll charges to federal programs when actual effort differs from budgeted percentages. View of Responsible Officials and Planned Corrective Actions Little Eagle Grant School acknowledges the finding regarding insufficient payroll documentation. To address this, the School will implement a standardized certification form to be submitted with each employee timesheet. This form will require employees to certify that their time and effort were performed in accordance with the approved budget and assigned funding source(s). This process will strengthen documentation and ensure compliance with federal requirements moving forward.

AL 84.010 Special Tests & Provisions: Test Security Measures: Significant Deficiency Criteria Per the Uniform Guidance, LEAs are required to have policies and procedures for ensuring that the LEA and its schools implement test security measures. Condition During our testing of the Title I program, we were unable to obtain the school’s policy detailing test security measures. Cause At the end of the fiscal year, there was turnover in the business manager position. The new business manager was unable to locate the test security policy. Effect The school may not have adequate security measures in place over tests and assessments. Questioned Costs None Repeat Finding This is a new finding in the current year. Recommendation We recommend that the School document and put into practice adequate security measures over tests and assessments. View of Responsible Officials and Planned Corrective Actions Little Eagle Grant School acknowledges the finding regarding being unable to provide the schools policy detailing test security measures. The school has drafted a policy regarding the entire Title I program that will be approved on March 30, 2026.