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Finding Number: 2024‐003 Repeat Finding: No 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, Material Weakness Compliance Requirement: Reporting Criteria The Arizona Department of Education (ADE) requires Districts to submit a completion report through the ADE grants management system. Completion reports are required for all grants, must be submitted to ADE within 90 days after the grant end date, and must agree to the underlying accounting records. Condition Inadequate internal controls existed over the preparation of the completion report for the American Rescue Plan ‐ Elementary and Secondary School Emergency Relief (ARP ESSER) grant within the Education Stabilization Fund. Cause The District did not develop nor implement strong internal controls over reporting due to lack of training for individuals with reporting responsibilities and lack of timely management of grant expenditures. Effect The District is at risk of reporting inaccurate information. Context The District reported $10.6 million of equipment expenditures in the completion report, which agreed in total to the accounting records. However, the detail by object code presented in the completion report did not agree to the underlying accounting records. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should develop or implement strong internal controls over reporting to reduce the risk of reporting inaccurate information to ADE. Views of Responsible Officials See Corrective Action Plan.