Finding Number: 2025‐001 Repeat Finding: Yes, 2024‐001, 2023‐001 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Federal Agency(ies): U.S. Department of Interior Federal Award Number: A24AV00760 Pass‐Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Criteria According to the Indian Child Protection and Family Violence Prevention Act 925 USC §3201 et. sec.), the School must conduct a character investigation of each individual who is employed or is being considered for employment in a position that involves regular conduct with, or control over, Indian children. The individual should be reinvestigated every five years. In addition, individuals in those positions must meet the required standards of character no less stringent than those prescribed under subpart B – Minimum Standards of Character and Suitability for Employment (25 CFS part 63). Condition The School did not complete character reinvestigations timely for all employees. In addition, the School did not properly document completed character reinvestigations for all employees. Cause School policies were not always followed and controls were not in place to ensure character reinvestigations were performed timely and properly documented. Effect The School was not in compliance with the Indian Child Protection and Family Violence Prevention Act. Context During our review of the School’s character investigations, we noted the following: - For four of 25 character investigations reviewed, the five year reinvestigation was not completed within five years. Of the four character investigations, two were a repeat finding from the prior year audit. - For three of 25 character investigations reviewed, the School did not maintain evidence that the suitability determination was conducted. Although a character investigation was performed by the FBI and favorable results were communicated to the School, the Certification of Investigation and Adjudication form were not completed and signed by an appropriate adjudicating official until being informed by auditors. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The School should ensure character investigations are performed in a timely manner to achieve full compliance with the School’s policies and the Indian Child Protection and Family Violence Prevention Act. Views of Responsible Officials See Corrective Action Plan.
Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization 15.042 A23AV00813 N/A Administrative Cost Grants for Indian Schools 15.046 A23AV00813 N/A Special Education Cluster (IDEA) 84.027 A24AV00760 N/A Federal Agency(ies): U.S. Department of Interior Pass‐Through Agency(ies): Bureau of Indian Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Procurement and Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making sub awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. Additionally, the School should adhere to procurement methods outlined in 2 CFR §200.320. Condition The School’s internal controls over procurement of goods and services were not adequate. Cause The School has procures in place to perform procurement, suspension, and debarment in accordance with federal regulations and guidelines, however, they were not followed. Effect The School was not in compliance with federal regulations and guidelines related to suspension and debarment or procurement. Context - The School did not maintain documentation that a review to determine that vendors with whom the School spent greater than $25,000 were not suspended and debarred. The deficiency applied to two vendors with the Special Education Cluster (IDEA) and one vendor with the Administrative Cost Grants for Indian Schools. - For three non‐cooperative‐purchase vendors paid in excess of the small purchase threshold ($10,000), the School did not prepare and maintain documentation for at least 3 written quotes from qualified sources. The deficiency applied to two vendors with the Administrative Cost Grant, and one vendor with the Special Education Cluster (IDEA). -For all eight vendors procured via sole source reviewed, the School did not prepare and maintain documentation in accordance with School policy that there was only one sole source and that the determination was reasonable. Additionally, the School did not present the procurement to the Board for approval as a sole source for all eight vendors. The deficiency applied to five vendors procured through funding from the Administrative Cost Grant for Indian Schools, two vendors procured through funding from the Indian School Equalization Program, and one vendor which was procured through various sources of federal funding. -For the first of three vendors reviewed with whom the School had purchases exceeding $50,000 during the fiscal year, the School did not perform a sealed procurement. For the second of three vendors reviewed with whom the School had purchases exceeding $50,000 during the fiscal year, the School did not retain evidence that a sealed procurement was performed. Finally, for the third of three vendors reviewed with whom the School had purchases exceeding $50,000, the School did not maintain evidence that bids were solicited from an adequate known suppliers, were opened at the prescribed time and place, and that the award was made to the lowest responsive/responsible bidder. All three deficiencies applied to the Special Education Cluster (IDEA). The sample was not intended to be, and was not, a statistically valid sample. Recommendation The School should review documented policies and implement them in school procedures to ensure compliance with federal procurement requirements. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2025‐003 Repeat Finding: Yes, 2024‐003, 2023‐003 Program Name/Assistance Listing Title: COVID‐19 Education Stabilization Fund Assistance Listing Number: 84.425 Federal Agency(ies): U.S. Department of Interior Federal Award Number: A23AV00813 Pass‐Through Agency(ies): Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Equipment and Real Property Management Criteria Local governments and Indian tribes shall follow 2 CFR 200 for equipment acquired under federal awards received directly from a federal awarding agency. Institutions of higher education, hospitals, and other non‐profit organizations shall follow the provisions of Uniform Guidance. The Uniform Guidance requires that equipment be used in the program for which it was acquired or, when appropriate, other federal programs. Equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every two years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequatelymaintained. Condition The School lacked adequate internal controls over its accounting of capital assets and inventory processes. Cause The School has not been able to devote proper resources and training to ensure capital assets are accurate and up to date. Effect The School’s internal controls over capital assets were not adequate to ensure that a misstatement would be prevented and/or detected. The School was not in compliance with requirements set by the federal government. Context During our review of the School’s capital asset schedules we noted the following: - The capital asset listing does not include identification numbers for individual assets. - Capital asset policies appear outdated and need to be updated; this includes adding policies related to finance purchases and lease recognition thresholds. - Physical inventory procedures are not documented, and it is unable to be determined if inventories are done periodically for all items on the School’s capital asset listing. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The School should design and implement effective internal control procedures to ensure the capital assets schedules are prepared in accordance with GAAP and School policy. The School’s personnel should obtain additional training as needed. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2025‐004 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization Program 15.042 A24AV00760 N/A Special Education Cluster (IDEA) 84.027 A24AV00760 N/A Administrative Costs Grant for Indian School 15.046 A24AV00760 N/A Federal Agency(ies): U.S. Department of Interior Pass‐Through Agency(ies): Bureau of Indian Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Indian tribes and tribal organizations may, without the approval of the Bureau of Indian Affairs (BIA), expend funds provided under a self‐determination contract for purposes identified in 25 USC 450j‐l(k), to the extent that the expenditure of the funds is supportive of a contracted program (25 USC 450j‐l(k)). These guidelines require internal controls over expenditures of federal monies, including the use of requisitions or purchase orders, to ensure expenditures comply with federal regulations and guidelines (25 CFR 39; 25 CFR 900). Uniform Guidance requires that non‐federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with laws, regulations, and program compliance requirements. Control activities should include proper authorization of expenditures and reviews of operating performance. Further, School management is responsible for establishing and maintaining internal controls over payroll that are adequate to ensure that all payroll disbursements are properly processed and recorded in accordance with Internal Revenue Service (IRS) regulations. Condition The School did not always follow its disbursement, payroll, and financial reporting process. Additionally, employees were not paid in accordance with contracts and time cards. Cause The School lacked adequate internal controls over disbursements, journal entries, and payroll. Controls in place did not always operate effectively and were not followed. Effect The School was not in compliance with federal regulations and guidelines. The School’s internal controls over disbursements, payroll, and journal entries were not adequate to ensure that all financial activities were properly processed, recorded and supported. Context - For one of 16 journal entries reviewed, the School did not maintain documentation to support the transaction for adjusting a cost initially charged to the Administrative Costs Grant to the Indian School Equalization Program. - For one of 45 disbursements reviewed, the purchase order was created after the invoice was received. - For one of 45 disbursements reviewed, the School could not provide supporting documentation including the purchase order, receiving report, and canceled check. - For three of 45 disbursements reviewed, there was no evidence of client clerical checks or cancellation of supporting documentation, and no evidence documenting receipt of services. - For two of 40 employee payroll records reviewed, the employee pay could not be recalculated. - For one of 10 credit card transactions reviewed, supporting documentation for the receipt was not maintained by the School. - The School miscoded $481,980 in expenditures of the Indian School Equalization Program to the Special Education Cluster (IDEA). The sample was not intended to be, and was not, a statistically valid sample. Recommendation The School should develop and implement stronger internal controls over its accounting records, specifically those of disbursements and payroll to ensure that all financial activities are properly processed and recorded. The School should maintain documentation to support all disbursements and ensure disbursements are allowable. The School should follow its established procedures for processing payroll and not circumvent the process by suppressing payroll. Additionally, the School must take care to ensure employee pay is properly calculated and that journal entries are properly supported. The School’s personnel should obtain additional training as needed. Additionally, the School should take more care to ensure they are in compliance with federal regulations and guidelines, as put forth in 25 CFR 39; 25 CFR 900 and in 25 USC 450j‐l(k). Views of Responsible Officials See Corrective Action Plan.