Finding Text
Finding Number: 2024‐001
Repeat Finding: No
Program Names/Assistance Listing Titles:
Assistance
Listing
Numbers:
Federal Award
Numbers:
Questioned
Costs:
Emergency Connectivity Fund 32.009 ECF202208394 $141,445
Education Stabilization Fund 84.425 S425U210038 141,445
Federal Agencies: Department of Education and USAC
Pass‐Through Agencies: Arizona Department of Education and USAC
Type of Finding: Noncompliance, Significant Deficiency
Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Criteria
Management is responsible for establishing and maintaining internal controls over its accounting
records. Further, in accordance with 2 CFR 200.510, the District is responsible for the design and
implementation of controls over the preparation of the Schedule of Expenditures of Federal Awards
(SEFA) each fiscal year. Additionally, 2 CFR 200.303 requires the District establish and maintain
internal control over the federal awards that provides reasonable assurance that the District is
managing the federal awards in compliance with federal statutes, regulations, and the terms and
conditions of federal awards.
Condition
The District was awarded several new Federal grants in response to the COVID‐19 pandemic, which
made proper preparation of the SEFA challenging and the District failed to include the new grant on
the fiscal year 2022 SEFA. The District also submitted the same expenditures for reimbursement for
two federal programs.
Cause
The District did not account for the Emergency Connectivity Fund (ECF) properly as the program was
unique and not part of the District’s normal federal program operations. It was not known that the
program was subject to Single Audit. In addition, there was a lack of financial oversight of the ECF
grant application submitted by the Technology Department during fiscal year 2022.
Effect
The District received reimbursements for two federal grants, one for the Education Stabilization Fund
in fiscal year 2022 and the other for the ECF grant in fiscal year 2024, for expenditures totaling
$141,445. In addition, the fiscal year 2022 SEFA was incorrect as the ECF expenditures were not
included on the SEFA; however, it was determined the error did not have an effect on the selection
of major federal programs.
Context
During fiscal year 2021‐22, the District applied for and was approved for funding under the Universal
Service Company (USAC)'s Emergency Connectivity Fund (ECF). The District, in conjunction with its
consultant, submitted expenditures from two purchase orders to USAC's ECF for purchases made in
fiscal year 2021‐22, one of which was paid for and previously reimbursed under the Education
Stabilization Fund. The District received the USAC ECF reimbursement in fiscal year 2023‐24. The
sample was not intended to be, and was not, a statistically valid sample.
Recommendation
The District should ensure all federal programs are properly reviewed prior to submitting any
applications or expenditures for reimbursements. The expenditures should be included in the SEFA
for the fiscal year in which the expenditures occurred. In addition, the District should strengthen
controls over the accounting records to ensure reimbursements are not submitted for multiple
programs.
Views of Responsible Officials
See Corrective Action Plan.