Audit 53029

SECTION II ? FINANCIAL STATEMENT FINDINGS 2022-001 Internal Control over Financial Close and Reporting (Material Weakness) ? Modified and Repeated (Prior Year Finding 2021-001) Condition: Account reconciliations were not performed timely and/or did not agree to the general ledger when performed. Accounts Payable and Accrued liabilities There were unsupported accounts payable and accrued liabilities balances for the School at year-end. The School lacks controls to ensure that accounts payable and accrued payroll liabilities are reconciled during the year or at year-end. During our review of the search for unrecorded liabilities and general disbursements, we noted cut-off exceptions for 7 out of 15 disbursements tested, totaling $122,874, the School booked expenses related to the current year in the next fiscal year. Fund Balance The School has recorded adjustments to correct ending balances for these accounts. Criteria: The School is responsible for maintaining adequate internal controls over its accounting records, account balances, and financial statement disclosures. Accounting records should include a complete, balanced general ledger that records all transactions that is supported by appropriate subsidiary records so that accurate financial statements can be prepared. Procedures should be in place to ensure that balance sheet accounts are independently reviewed and reconciled to the subsidiary records in a timely and effective manner. Cause: There was a lack of established internal controls and processes over the financial reporting process to ensure timely and accurate financial reporting. Effect: Without established and adequate internal controls and reconciliation procedures, the School?s balances lack certainty about the accuracy of the balances. Also, the probability that fraud or material errors will occur and go undetected generally increases. Auditor's Recommendation: We recommend management evaluate all aspects of the financial close and reporting process as well as the account reconciliation process and establish adequate internal controls and procedures to ensure timely and accurate financial statements and supporting schedules and to ensure timely compliance requirements are met. View Of Responsible Officials: The School agrees with this finding and has a plan in place to correct this.

Condition: During our test work over special tests and provisions, we noted that employee background investigations were outdated. Criteria: The Indian Child Protection and Family Violence Prevention Act (25 USC 3201 et seq.) requires Indian tribes and tribal organizations that receive funds under the ISDEAA or the Tribally Controlled Schools Act to conduct an investigation of the character of each individual who is employed or is being considered for employment by such Indian tribe or tribal organization in a position that involves regular contact with, or control over, Indian children. The Act further states that the Indian tribe or tribal organization may employ individuals in those positions only if the individual meet standards of character, no less stringent than those prescribed under subpart B ? Minimum Standards of Character and Suitability for Employment (25 CFR part 63), as the Indian tribe or tribal organization establishes. Cause: Turnover with School personnel led to a lapse in the required performance and documentation of background investigations. Effect: The School is not in compliance with the special tests and provisions requirements. Auditor's Recommendation: We recommend that the School ensure that employees follow the policies and procedures that are in place along with the compliance requirements for the Indian School Equalization Program and ensure that the compliance requirement is being followed. Views of Responsible Officials: The School agrees with this finding and has a plan in place to correct this.

SECTION II ? FINANCIAL STATEMENT FINDINGS 2022-001 Internal Control over Financial Close and Reporting (Material Weakness) ? Modified and Repeated (Prior Year Finding 2021-001) Condition: Account reconciliations were not performed timely and/or did not agree to the general ledger when performed. Accounts Payable and Accrued liabilities There were unsupported accounts payable and accrued liabilities balances for the School at year-end. The School lacks controls to ensure that accounts payable and accrued payroll liabilities are reconciled during the year or at year-end. During our review of the search for unrecorded liabilities and general disbursements, we noted cut-off exceptions for 7 out of 15 disbursements tested, totaling $122,874, the School booked expenses related to the current year in the next fiscal year. Fund Balance The School has recorded adjustments to correct ending balances for these accounts. Criteria: The School is responsible for maintaining adequate internal controls over its accounting records, account balances, and financial statement disclosures. Accounting records should include a complete, balanced general ledger that records all transactions that is supported by appropriate subsidiary records so that accurate financial statements can be prepared. Procedures should be in place to ensure that balance sheet accounts are independently reviewed and reconciled to the subsidiary records in a timely and effective manner. Cause: There was a lack of established internal controls and processes over the financial reporting process to ensure timely and accurate financial reporting. Effect: Without established and adequate internal controls and reconciliation procedures, the School?s balances lack certainty about the accuracy of the balances. Also, the probability that fraud or material errors will occur and go undetected generally increases. Auditor's Recommendation: We recommend management evaluate all aspects of the financial close and reporting process as well as the account reconciliation process and establish adequate internal controls and procedures to ensure timely and accurate financial statements and supporting schedules and to ensure timely compliance requirements are met. View Of Responsible Officials: The School agrees with this finding and has a plan in place to correct this.

Condition: During our test work over special tests and provisions, we noted that employee background investigations were outdated. Criteria: The Indian Child Protection and Family Violence Prevention Act (25 USC 3201 et seq.) requires Indian tribes and tribal organizations that receive funds under the ISDEAA or the Tribally Controlled Schools Act to conduct an investigation of the character of each individual who is employed or is being considered for employment by such Indian tribe or tribal organization in a position that involves regular contact with, or control over, Indian children. The Act further states that the Indian tribe or tribal organization may employ individuals in those positions only if the individual meet standards of character, no less stringent than those prescribed under subpart B ? Minimum Standards of Character and Suitability for Employment (25 CFR part 63), as the Indian tribe or tribal organization establishes. Cause: Turnover with School personnel led to a lapse in the required performance and documentation of background investigations. Effect: The School is not in compliance with the special tests and provisions requirements. Auditor's Recommendation: We recommend that the School ensure that employees follow the policies and procedures that are in place along with the compliance requirements for the Indian School Equalization Program and ensure that the compliance requirement is being followed. Views of Responsible Officials: The School agrees with this finding and has a plan in place to correct this.