Finding Text
Finding Number: 2022-004 Repeat Finding: Yes, 2021-004 Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00937 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions CRITERIA 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). CONDITION Cash balances were not fully collateralized to ensure protection of the advance funds. CAUSE Adequate review systems were not in place for management to monitor compliance with these requirements. EFFECT The School was not always in compliance with federal regulations and guidelines. CONTEXT During our review of the School?s bank accounts, a bank balance amount subject to collateralization of $5.7 million existed at June 30, 2022. The School was unable to provide collateralization documentation from the banking institution for this time period. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION Internal controls should be implemented to ensure that all cash balances are collateralized by banking institutions. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.