Finding Text
Finding Number: 2024-003 Repeat Finding: Repeated and modified, prior year finding 2023-003. Program Name/Assistance Listing Title: Indian Schools Student Transportation, Administrative Cost Grants for Indian Schools Assistance Listing Number: 15.044, and 15.046 Federal Agency: U.S. Department of the Interior Federal Award Number: A23AV00827 Questioned Costs: 15.044: $1,418 | 15.046: $475 Type of Finding: Noncompliance, Material Weakness Compliance Requirement: A. Activities Allowed or Unallowed, B. Allowable Costs/Cost Principles. Criteria: Indian tribes and tribal organizations may, without the approval of the Bureau of Indian Affairs (BIA), expend funds provided under a self-determination contract for purposes identified in 25 USC 450j-l(k), to the extent that the expenditure of the funds is supportive of a contracted program (25 USC 450j-l(k)). These guidelines require internal controls over expenditures of federal monies, including the use of requisitions or purchase orders, to ensure expenditures comply with federal regulations and guidelines (25 CFR 39; 25 CFR 45; 25 CFR 900). Office of Management and Budget requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with laws, regulations, and program compliance requirements. Control activities should include ensuring proper authorization of expenditures and reviews of operating performance. The School must ensure sufficient cash is available in cashcontrolled funds prior to authorizing expenditures. Condition: The School lacked adequate internal controls over its accounting of disbursements to ensure that a) all financial activities were properly processed and recorded and b) the School remained in compliance with federal requirements. Effect: Noncompliance with federal regulation that led to a qualified audit opinion over the listed federal programs as noted above. Cause: Management was unwilling to provide the requested documentation. Context: During our review of the School’s accounting records and internal controls, as well as through inquiry of management, we noted the following: • For three of 25 accounts payable transactions tested out of the 15.044 grant, the School did provide adequate documentation to support the allowability of the expenditure. • For two of 25 accounts payable transactions tested out of the 15.046 grant, the School did provide adequate documentation to support the allowability of the expenditure. Recommendation: The School should develop and implement stronger internal controls over its accounting of disbursements to ensure that all financial activities are properly processed, recorded, and supported, and provide the requested documentation to the audit firm when requested. View of Responsible Official: The School’s corrective action plan presented in a separate document includes the views and planned corrective action of its responsible officials. We are not required to and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.