Audit 400355

Finding Number: 2025‐001 Repeat Finding: Yes, 2024‐001 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Impact Aid 84.041 N/A N/A Education Stabilization Fund 84.425 S425U210038 N/A Federal Agency: U.S Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance Compliance Requirements: Reporting Criteria In accordance with 2 CFR 200.512, the single audit must be completed, and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. Condition The District does not have adequate controls in place over federal reporting compliance. Cause The District does not have adequate controls over financial reporting and records retention. Effect The District was not in compliance with federal regulations and guidelines. Context The sample was not intended to be, and was not, a statistically valid sample. The District’s Single Audit Report was not completed and submitted within nine months of fiscal year‐end. Recommendation The District should implement better controls over financial reporting and records retention to ensure all documents are prepared and available for the completion of the financial reports. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2025‐002 Repeat Finding: Yes, 2024‐002 Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425U Federal Agency: U.S Department of Education Federal Award Number: S425U210038 Pass‐Through Agency: Arizona Department of Education Questioned Costs: n/a Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Equipment and Real Property Management Criteria District management is responsible for establishing and maintaining internal control over the District’s accounting records and financial reporting in order to meet financial reporting objectives of the District. CFR 200.313 requires a physical inventory, of property purchased with federal funds, must be completed and reconciled with the property records every two years. The Uniform System of Financial Records (USFR) prescribes required procedures in the areas of capital assets including an inventory at least every three years. Condition The District lacked adequate controls over capital assets purchased with federal funds. Cause District and federal policies and internal controls in place were not always operating effectively or were not always followed. Effect The District was not in compliance with CFR 200.313. Context During our review of the District’s capital assets, we noted that the District has not performed a physical inventory and reconciliation over stewardship and capital assets since fiscal year 2017. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should appoint an individual to ensure that a physical inventory of property purchased with federal funds is conducted and reconciled back to the property records every two years. Views of Responsible Officials See Corrective Action Plan.