Audit 410367

2025-004 (2023-002) – Special Test and Provision – Annual Report Card, High School Graduation Rate – Material Weakness in Internal Control over Compliance/Material Noncompliance ALN and Title: 84.010 Title I Grants to Local Educational Agencies Pass-Through Entity: NM Public Education Department Identifying Number: 24101 Award Year: 2024-2025 School Year Condition: The District was not obtaining proper written documentation to substantiate the correct student withdrawal codes for 6 of 51 students tested. The withdrawal form did not have the signature of the school official for 1 of 51 students tested and did not have a withdrawal form on file for 5 of 51 students tested. The sample was not statistically valid. Progress on prior year finding: The District has not made significant progress on this finding. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Per ESEA 8101(23), to remove a student from the cohort, a school or LEA must confirm, in writing, that the student transferred out, emigrated to another country, transferred to a prison or juvenile facility, or is deceased. To confirm that a student transferred out, the school or LEA must have official written documentation that the student enrolled in another school or in an educational program that culminates in the award of a regular high school diploma. A student who is retained in grade, enrolls in a GED program, or leaves school for any other reason may not be counted as having transferred out for the purpose of calculating graduation rate and must remain in the adjusted cohort (ESEA sections 1111(h)(1(C)(iii)(II) and 8101(23), (25) (20 USC 6311(h)(1)(C)(iii)(II) and 7801(23), (25))). Per Farmington Municipal School District Board Policy, Section J Students, J-1300 Student Withdrawal from School, a withdrawal form shall be presented to the parent or legal guardian of a student who may or must withdraw from school. The withdrawal form shall include space for the reason for withdrawal and the signature of an official of the school from which the student has withdrawn. Questioned Costs: None noted. Effect: The District’s reported High School Graduation Rate for the 2024-2025 school year cannot be verified due to a lack of written documentation for students removed from the cohort. Cause: A deficiency in the internal control system to properly train and monitor the personnel who are assigned to maintain the accuracy of student records and ensure the District obtains all the necessary written documentation for student’s files. Auditor’s Recommendation: The auditor recommends the District implement controls to ensure student files are complete and accurate and conduct training for Title I personnel and school sites over the appropriate level of written documentation required for different situations. Views of Responsible Officials of Auditee: The District will implement controls to ensure student files are complete and accurate and conduct training for Title I personnel and school sites over the appropriate level of written documentation required for different situations. Responsible Party: Student Information Coordinator Anticipated Completion Date: June 30, 2026

2025-005 – Eligibility – Lack of Retention of Applications for Participants – Material Weakness in Internal Control over Compliance/Material Noncompliance ALN and Title: 10.558 Child and Adult Care Food Program Pass-Through Entity: NM Early Childhood Education & Care Department Identifying Number: 21000 Award Year: 2024-2025 School Year Condition: The District did not retain the applications substantiating eligibility of children for free or reduced meals during the year. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. Criteria (Continued): These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Per Title 7 US Code of Federal Regulations Part 226.10d, all records to support claims shall be retained for a period of three years after the date of submission of the final claim for the fiscal year to which they pertain. Questioned Costs: None noted. Effect: The appropriateness of the eligibility of students for whom the District submitted claims for the 2024-2025 school year cannot be verified due to a lack of retention of the applications used to determine student eligibility. Cause: A deficiency in the internal control system to properly train and monitor the personnel who are assigned to ensure appropriate documentation retention in line with the grant requirements. Auditor’s Recommendation: The auditor recommends the District implement controls to ensure that the applications used to determine eligibility for participation within the program be retained for three years as required by the relevant grant requirements. Views of Responsible Officials of Auditee: The District will strengthen internal controls by implementing procedures, training and monitoring to ensure all eligibility applications and supporting documentation are properly maintained and retained for a minimum of three years in accordance with grant requirements and are available for audit review. Responsible Party: Student Nutrition Supervisor Anticipated Completion Date: June 30, 2026