Finding Text
Condition: During the fiscal year ended June 30, 2024, the District was unable to provide a report that supported the accuracy of the verification report sample. This lack of documentation prevented us from verifying that the sample was appropriately selected and representative of the population, as required under federal regulations. Effect: The inability to confirm the accuracy and validity of the verification report sample compromises the reliability of compliance testing results. This creates a risk of noncompliance with federal program requirements and potential misreporting. Cause: The District transitioned to new software during the fiscal year and relied on the software to produce the sample without verifying the accuracy of the population data. Staff lacked an understanding of how the software selected samples and did not independently validate the sampling process. Criteria: Per 2 CFR § 200.333 (Retention requirements for records), recipients of federal awards must maintain adequate documentation to support financial and compliance-related activities. Additionally, accurate and reliable sampling procedures are critical for compliance with federal program requirements. Questioned Costs: None Recommendation: We recommend that the District implement a record retention policy that requires all supporting documentation for verification reports and samples to be maintained and reviewed for accuracy. We recommend that the District provide training to staff responsible for federal program compliance, emphasizing the importance of verifying population data and sampling processes. Obtain training from the software provider to ensure staff understand how the software generates samples and verify its accuracy. Establish a process for periodic internal reviews to confirm that all required documentation is retained and readily available for audit purposes. Management Response: This finding was also reported as Finding 2024-001 in the prior year’s audit. The District agrees with the finding as it was issued after verification for year ending June 30, 2025 had been completed. The District will be conducting manual verification for the year ending June 30, 2026 and forward to resolve the finding.