Audit 413260

2021-002 Procurement, Suspension and Debarment – Material Weakness in Internal Control over Financial Reporting and Federal Awards and Noncompliance Identification of federal programs: 14.862 Indian Community Development Block Grant Program Criteria: Title 2 U.S. Code Part 200.320 requires a nonfederal entity to adhere to certain procurement methods when spending federal awards. Condition: The Council was not able to provide adequate documentation to ensure contracts and procurements complied with federal requirements and the Council’s own financial statement policies and procedures. Cause: The Council was adjusting to challenges created by the COVID-19 pandemic. Effect or potential effect: The Council may not have been in compliance with federal requirements necessary for administering federal grants awarded. Questioned Costs: None Context: The auditor noted 2 contractors in the expenditure population that would have been subject to procurement standards; however, neither one had procurement documentation that could be located to demonstrate compliance with Title 2 U.S. Code Part 200.320 or the Council’s procurement policies. Identification of Repeat Finding: This finding was also reported in the prior year as Finding 2020-002. Recommendations: We recommend Council review its financial policies and procedures over procurement requirements and implement internal controls to conform with federal spending. Views of Responsible Officials: Management agrees with this finding. See Corrective Action Plan.

2021-003 Allowable Costs/Cost Principles – Material Weakness in Internal Control over Compliance Identification of federal programs: 14.862 Indian Community Development Block Grant Program Criteria: Title 2 U.S. Code Part 200.403(g) requires that for costs charged to a federal program to be allowable, they must be adequately documented. Condition: Payroll related costs charged to the program did not have Personnel Action Forms to document the rate of pay for the employee in accordance with the Council’s own financial policies and procedures. Cause: The Council was adjusting to challenges created by the COVID-19 pandemic. Effect or potential effect: Although charges were still approved and supported, not following established financial policies and procedures increases the risk that internal control failures, questioned costs and noncompliance could arise in the future over major federal programs. Questioned Costs: None Context: During our sample testing for allowable costs of the 14.862 Indian Community Development Block Grant Program major program, we noted that the 19 payroll samples we selected did not have their approved payrate support in the form of a Personnel Action Form as required by the Council’s own financial policies and procedures. Identification of Repeat Finding: This is a repeat finding, previously identified as Finding 2020-003. However, it has been elevated to a material weakness in the current year due as a material amount of payroll expenditures were charged to the major program. Recommendations: We recommend the Council review its financial policies and procedures and implement and/or revise accordingly to ensure they conform to both uniform guidance and internal policies and procedures to satisfy adequate internal controls. Views of Responsible Officials: Management agrees with this finding. See Corrective Action Plan. See Corrective Action Plan.

2021-004 Reporting - Significant Deficiency in Internal Control over Compliance and Other Matter Identification of federal programs: 14.862 Indian Community Development Block Grant Program Criteria: Each prime recipient of the grant shall provide a quarterly SF-425 Federal Financial Report that contains 14.862 Indian Community Development Block Grant costs incurred during the covered period (the period beginning on January 1, 2021 and ending on December 31, 2021) to the Department of Housing and Urban Development. Condition: It appears required reporting was submitted; however, the fourth quarter report was submitted on March 31, 2022, 60 days past the deadline. The report was due no later than January 31, 2022. Cause: The Council was adjusting to challenges created by the COVID-19 pandemic. Effect or potential effect: It could not be determined that the Council complied with reporting requirements applicable to the major program. Questioned Costs: None Context: A copy of the quarterly reports was provided; however, the Quarter 4 report was submitted after the deadline. Identification of Repeat Finding: This finding was also reported in the prior year as Finding 2020-004. Recommendations: We recommend the Council design and implement internal controls to comply with reporting over federal awards. Views of Responsible Officials: Management agrees with this finding. See Corrective Action Plan.