Audit 55907

2022 ? 002 ? Equipment and Real Property Management Federal Agency: U.S. Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Arizona Department of Education Pass-Through Number(s): All Pass-Though Numbers Present in the SEFA Award Period: March 2020 through September 2024 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and noncompliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of Subpart D ? Property Standards including retaining audit evidence to support the physical inventory taken at the minimum of every two years. The District should have internal controls designed to ensure compliance with those provisions. Condition/Context: Due to the cyberattack, we were unable to obtain evidence of the physical inventory taken. The District is working in recovering the evidence supporting the physical inventory taken. Questioned costs: None. Cause: The District was a victim of a cyberattack. Effect: Failure to retain adequate records can cause the District to be out of compliance with 2 CFR Part 200. Repeat finding: No Recommendation: We recommend the District design controls to ensure historical accounting records are properly safeguarded and backed up in the event of another future cyberattack. Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan.

2022 ? 003 ? Special Test and Provision ? Wage Rate Requirements Federal Agency: U.S. Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Arizona Department of Education Pass-Through Number(s): All Pass-Though Numbers Present in the SEFA Award Period: March 2020 through September 2024 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Construction contracts are reviewed and approved by the Director of Purchasing to ensure the completeness and accuracy of the contract including the appropriate prevailing wage rate clauses are included in the contract or subcontracts. Additionally, contractor or subcontractor are required to submit required certified payroll for each week in which work was performed. Condition/Context: We noted instances where contracts did not include the prevailing wage clauses and no certified payrolls were obtained from the contractor or subcontractors. For 5 of the 6 contracts reviewed, the required prevailing wage rate clauses were not included in the contract and there were no certified payrolls submitted by the contractor or subcontractors. Questioned costs: None. Cause: The District was not aware of the error due to a lack of established processes and internal controls in these areas during the fiscal year. Effect: Noncompliance with federal grant terms and conditions including 2 CFR Part 200 Uniform Guidance over wage rate requirements. Repeat finding: No Recommendation: We recommend the District to review its current procedures over the review of contracts to ensure prevailing wage rates clauses are included in the contract and implement a monitoring control to ensure certified payrolls are submitted by the contractor or subcontractor in a timely manner as required by the regulations. Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan.

2022 ? 004 ? Allowable Cost/Cost Principles ? Payroll Federal Agency: U.S. Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Arizona Department of Education Pass-Through Number(s): All Pass-Though Numbers Present in the SEFA Award Period: March 2020 through September 2024 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and noncompliance Criteria or specific requirement: Time and effort certifications are singed off by the employee and their supervisor/department/program. An employee who leaves the district must complete the Certification for time worked prior to departure. Additionally, authorized wage rates are approved by Human Resources (HR). Condition/Context: We noted instances where time and effort certifications were not completed or signed by the employee in accordance with District?s procedures and we noted an instance of no documentation available supporting HR approval of an employee wage rate. For 2 of the 40 payroll selections the time and effort certifications were not completed and 1 of 40 was not signed by the employee. For 1 of 40 payroll selected, we were unable to obtain evidence of HR?s approval of an authorized wage rate. Questioned costs: None. Cause: The District was not aware of the error. Effect: Noncompliance with federal grant terms and conditions including 2 CFR Part 200 Uniform Guidance. Repeat finding: No Recommendation: We recommend the District to follow its Time and Effort Procedures For Federal Grants to ensure all Certifications are completed in accordance with policy. We also recommend the District to retain evidence of HR approvals of authorized wage rates. Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan.

2022 ? 002 ? Equipment and Real Property Management Federal Agency: U.S. Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Arizona Department of Education Pass-Through Number(s): All Pass-Though Numbers Present in the SEFA Award Period: March 2020 through September 2024 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and noncompliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of Subpart D ? Property Standards including retaining audit evidence to support the physical inventory taken at the minimum of every two years. The District should have internal controls designed to ensure compliance with those provisions. Condition/Context: Due to the cyberattack, we were unable to obtain evidence of the physical inventory taken. The District is working in recovering the evidence supporting the physical inventory taken. Questioned costs: None. Cause: The District was a victim of a cyberattack. Effect: Failure to retain adequate records can cause the District to be out of compliance with 2 CFR Part 200. Repeat finding: No Recommendation: We recommend the District design controls to ensure historical accounting records are properly safeguarded and backed up in the event of another future cyberattack. Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan.

2022 ? 003 ? Special Test and Provision ? Wage Rate Requirements Federal Agency: U.S. Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Arizona Department of Education Pass-Through Number(s): All Pass-Though Numbers Present in the SEFA Award Period: March 2020 through September 2024 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Construction contracts are reviewed and approved by the Director of Purchasing to ensure the completeness and accuracy of the contract including the appropriate prevailing wage rate clauses are included in the contract or subcontracts. Additionally, contractor or subcontractor are required to submit required certified payroll for each week in which work was performed. Condition/Context: We noted instances where contracts did not include the prevailing wage clauses and no certified payrolls were obtained from the contractor or subcontractors. For 5 of the 6 contracts reviewed, the required prevailing wage rate clauses were not included in the contract and there were no certified payrolls submitted by the contractor or subcontractors. Questioned costs: None. Cause: The District was not aware of the error due to a lack of established processes and internal controls in these areas during the fiscal year. Effect: Noncompliance with federal grant terms and conditions including 2 CFR Part 200 Uniform Guidance over wage rate requirements. Repeat finding: No Recommendation: We recommend the District to review its current procedures over the review of contracts to ensure prevailing wage rates clauses are included in the contract and implement a monitoring control to ensure certified payrolls are submitted by the contractor or subcontractor in a timely manner as required by the regulations. Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan.

2022 ? 004 ? Allowable Cost/Cost Principles ? Payroll Federal Agency: U.S. Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Arizona Department of Education Pass-Through Number(s): All Pass-Though Numbers Present in the SEFA Award Period: March 2020 through September 2024 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and noncompliance Criteria or specific requirement: Time and effort certifications are singed off by the employee and their supervisor/department/program. An employee who leaves the district must complete the Certification for time worked prior to departure. Additionally, authorized wage rates are approved by Human Resources (HR). Condition/Context: We noted instances where time and effort certifications were not completed or signed by the employee in accordance with District?s procedures and we noted an instance of no documentation available supporting HR approval of an employee wage rate. For 2 of the 40 payroll selections the time and effort certifications were not completed and 1 of 40 was not signed by the employee. For 1 of 40 payroll selected, we were unable to obtain evidence of HR?s approval of an authorized wage rate. Questioned costs: None. Cause: The District was not aware of the error. Effect: Noncompliance with federal grant terms and conditions including 2 CFR Part 200 Uniform Guidance. Repeat finding: No Recommendation: We recommend the District to follow its Time and Effort Procedures For Federal Grants to ensure all Certifications are completed in accordance with policy. We also recommend the District to retain evidence of HR approvals of authorized wage rates. Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan.