Audit 396606

Findings and Questioned Costs Related to Federal Awards Finding Number: 2025‐002 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Federal Agency: U.S Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Cash Management Criteria School management is responsible for establishing and maintaining internal controls over disbursements that are adequate to ensure that all financial activities are properly processed and recorded. Further, Indian tribes and tribal organizations may without the approval of the BIE expend funds provided under a self‐determination contract for purposes identified in 25 USC 450j 1(k), to the extent that the expenditure of the funds is supportive of a contracted program. The School must ensure sufficient cash is available in cash‐controlled funds prior to authorizing expenditures (2 CFR §215.22). Condition The School lacked adequate internal controls to ensure funds were available in cash‐controlled funds before authorizing expenditures. Cause The School was not monitoring the cash balance for each fund individually. Effect The School was not in compliance with federal regulations and guidelines. Context At year end, the School had a negative cash balance of $252,109 for the ISEP Food Service Fund. Recommendation The School should monitor the cash balance for each fund individually and verify cash exists before authorizing expenditures. Views of Responsible Officials See Corrective Action Plan.

Findings and Questioned Costs Related to Federal Awards Finding Number: 2025‐001 Repeat Finding: Yes, 2024‐002 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Federal Agency: U.S Department of Interior Federal Award Number: A24AV00758 Pass‐Through Agency: Bureau of Indian Education Questioned Costs: $2,279 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria According to Uniform Guidance 2 CFR 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 control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition Employees were not always paid in accordance with contracts. Cause The School lacked adequate internal controls over payroll. The School's process did not include a review of that payroll data entered into the system and did not include a review of the payroll register before the pay was processed. Effect The School’s internal controls over payroll were not adequate to ensure employees are paid in accordance with their contracts. Context For two of 40 employees reviewed, employees were not paid in accordance with their approved contracts resulting in a net overpayment of $1,811. One employee was overpaid $2,279, and the second employee was underpaid $468. Recommendation The School should implement review procedures and controls to ensure employees are paid in accordance with their contracts. Views of Responsible Officials See Corrective Action Plan.