Audit 398129

2023-002 – Equipment and Real Property Management Finding Type: Material Noncompliance/Material Weakness in Internal Control over Compliance (Equipment and Real Property Management) Program: Formula Grants for Rural Areas (ALN 20.509) Criteria: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant award on or after December 26, 2014 to track equipment acquired with federal funding in its capital asset records. Condition: Equipment records do not include source of funding which includes the federal award identification number, who holds the title, the federal participation rate, and the location, use and condition of the asset to be in accordance with the Uniform Guidance. Cause: This condition appears to be the result of a lack of internal controls designed to ensure compliance with Uniform Guidance. Effect: As a result of this condition, the District did not fully comply with the Uniform Guidance applicable to the above noted grants. Recommendation: We recommend that the District develop policies to ensure that assets acquired with federal funds are properly identified in capital assets records. View of Responsible Officials: Management agrees with the recommendation and has developed a procedure to list capital assets that are acquired with federal funds. Management has also developed a policy to ensure that this procedure is followed. In addition, management has established written policies and procedures to track and monitor equipment purchased with federal funding throughout its lifecycle. These procedures include maintaining a detailed inventory record that identifies the funding source, acquisition date, cost, location, and condition of each asset. Management has also implemented periodic inventory reviews and reconciliation processes to ensure that equipment acquired with federal funds is properly recorded, safeguarded, and reported in accordance with applicable federal requirements. Repeat Finding: 2022-003

2023-003 – Procurement, Suspension, and Debarment Finding Type: Material Weakness in Internal Control over Compliance (Procurement, Suspension, and Debarment) Program: Formula Grants for Rural Areas (ALN 20.509) Criteria: The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant award on or after December 26, 2014 to document verification that vendors are in good standing or are not suspended or debarred prior to entering into a covered transaction. Condition: The District does not have an established policy or procurement protocol in place to ensure vendor verification through one of the three methods defined in federal compliance requirements. Cause: This condition appears to be the result of a lack of internal controls designed to ensure compliance with Uniform Guidance. Effect: As a result of this condition, the District did not fully comply with the Uniform Guidance applicable to the above noted grants. Recommendation: We recommend that the District update their procurement policies and processes to ensure that suspension and debarment compliance requirements are being met and effective internal controls are in place. View of Responsible Officials: Management agrees with the recommendation and has updated the procurement policies and procedures to verify vendor status of suspension and debarment. In February 2026, management implemented a policy requiring staff to verify that vendors are not suspended or debarred prior to entering into any contract funded with federal funds. In addition, management will document the verification process by retaining evidence of the review, such as confirmation from the appropriate federal databases, in the procurement or contract file. These procedures are intended to ensure compliance with applicable federal regulations and to provide proper documentation demonstrating that vendors have been reviewed and determined to be eligible prior to contract execution.