Finding Text
Program Information: U.S. Department of the Interior AL # Award Number Award Period Program Name 15.042 A19AV00888 7/1/2021-6/30/2022 Indian School Equalization Program Criteria: Per the compliance supplement: A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advance payments as “deferred revenue”) before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission and which only invest in obligations of the United States or securities that are guaranteed or insured by the United States; or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the advance funds, even in the event of a bank failure (25 USC 450e-3). Per 2 CFR § 200.303, recipients must establish and maintain effective internal controls over federal awards to ensure compliance with applicable regulations. Condition/Context: For 3 of the 3 samples selected for testing, the School did not provide support for review and approval of the monthly bank reconciliations. [ ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: Lack of internal controls and management oversight. Effect: Without an effective internal control system an entity’s objective: operations, reporting, and compliance cannot be achieved. Questioned Costs: N/A - No questioned costs were identified because the finding relates to the lack of documented review and approval of monthly bank reconciliations rather than specific unsupported or unallowable federal expenditures. Repeat Finding: No. Recommendation: We recommend that the School establish effective internal controls for the monthly bank reconcialtions and adhere to the internal controls. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.