Finding 1201390 (2025-002)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2025
Accepted
2026-03-30

AI Summary

  • Core Issue: The District lacks a reliable system to track time worked on federal projects, leading to discrepancies in payroll reporting.
  • Impacted Requirements: Payroll expenses must be documented accurately to reflect hours worked on approved federal activities.
  • Recommended Follow-up: Implement a process where a second employee verifies and approves time sheets for federal project work.

Finding Text

2025-002 Title I Payroll Federal Assistance Listing Number: 84.010 Program Title: Title I LEA Federal Agency: U.S. Department of Education Passthrough Entity: Arizona Department of Education Passthrough Number: 25FT1TTI-511183-01A Compliance Requirement: B. Allowable Cost/Cost Principles Award Period: July 1, 2024 – June 30, 2025 Finding Type: Noncompliance, Significant Deficiency in Internal Control Questioned Costs: N/A Repeat Finding: No. Condition/Context: The District does not have a system in internal control to properly track the time worked in federal projects. For four out of 25 Title I payroll transactions tested, the employees were completely paid using Title I monies, however the hours reported on the timecard for grant activities did not agree with the total hours worked. Criteria: Payroll made with federal project fund should be supported by documentation showing the hours worked with the activities approved as for the federal project. Effect: Without proper internal controls over time tracking and approval for federal programs, the District could overpay or underpay the portion of payroll for the federal program without detecting the error. Cause: Management oversight. Recommendation: We recommend the District have a second employee verify and approve time sheets for works related to federal projects. Views of Responsible Officials: There is no disagreement with this finding.

Corrective Action Plan

CORRECTIVE ACTION PLAN U.S. Department of Education | Arizona Department of Education Tuba City Unified School District No. 15 respectfully submits the following corrective action plan for the year ended June 30, 2025. Audit period: July 1, 2024 – June 30, 2025 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINANCIAL STATEMENT FINDINGS 2025-001 INFORMATION TECHNOLOGY Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition/Context: The District did not establish internal control procedures over information technology systems to ensure proper protection of District and student data. The following control deficiencies were noted regarding the District’s information technology policies and procedures: • The District did not limit access within the District’s accounting software to only those areas in each employee’s job function. Several employees had full administrative access to the accounting software, including third-party consultants, without compensating manual controls. • The District did not have a formal written policy regarding system or software changes. • Data-sharing agreements with third party provides that had access to the District’s data were not provided. • Documentation was not provided to support that the IT systems generated electronic audit trail reports or change logs were being reviewed or analyzed. This would include systemgenerated incident or error reports. • Disaster recovery and contingency plans were not provided. Recommendation: To strengthen internal controls, the District should evaluate its procedures regarding information technology security. The District should review and establish IT policies and procedures to protect the District’s data, train employees, establish backup plans, disaster recover or contingency plans, and 3rd party security and data confidentiality agreements. System general irregularity reports, including incident or error reports should be reviewed on an ongoing basis. Corrective Action: The District will evaluate its procedures regarding information technology security. The District will review and establish IT policies and procedures to protect the District’s data, disaster recovery or contingency plans, and 3rd party security and data confidentiality agreements. Additionally, the District will review system generated irregularity reports, including incident or error reports on an ongoing basis. Planned completion date for corrective action plan: For the period ending June 30, 2026. Name of the contact person responsible for corrective action: Leah Begay, Business Manager

Categories

Allowable Costs / Cost Principles Internal Control / Segregation of Duties Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.041 IMPACT AID $17.50M
84.425 EDUCATION STABILIZATION FUND $400,000
84.027 SPECIAL EDUCATION GRANTS TO STATES $398,971
10.553 SCHOOL BREAKFAST PROGRAM $290,776
84.060 INDIAN EDUCATION GRANTS TO LOCAL EDUCATIONAL AGENCIES $286,729
84.367 SUPPORTING EFFECTIVE INSTRUCTION STATE GRANTS (FORMERLY IMPROVING TEACHER QUALITY STATE GRANTS) $259,682
15.130 INDIAN EDUCATION ASSISTANCE TO SCHOOLS $142,177
10.555 NATIONAL SCHOOL LUNCH PROGRAM $128,786
84.424 STUDENT SUPPORT AND ACADEMIC ENRICHMENT PROGRAM $117,402
84.048 CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES $111,573
10.559 SUMMER FOOD SERVICE PROGRAM FOR CHILDREN $61,858
84.358 RURAL EDUCATION $48,405
84.173 SPECIAL EDUCATION PRESCHOOL GRANTS $14,085
84.010 TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES $5,189
84.365 ENGLISH LANGUAGE ACQUISITION STATE GRANTS $1,471
10.665 SCHOOLS AND ROADS - GRANTS TO STATES $385