Finding Text
Finding Number: 2024‐001
Repeat Finding: Yes, 2023‐001
Program Names/Assistance Listing Titles:
Assistance Listing Numbers:
Federal Award Numbers:
Questioned Costs:
Indian School Equalization 15.042 A23AV00864 N/A
Title I Grants to Local Educational Agencies 84.010 A23AV00864 N/A
Federal Agency(ies): U.S. Department of the Interior; U.S. Department of Education
Pass‐Through Agency: Bureau of Indian Education
Type of Finding: Noncompliance, Material Weakness
Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles
Criteria
School management is responsible for establishing and maintaining internal controls over travel
reimbursements, credit card transactions, journal entries, and disbursements that are adequate to
ensure that all financial activities are properly processed and recorded. Further, Indian tribes and
tribal organizations, may without the approval of the BIA, expend funds provided under a selfdetermination
contract for purposes identified in 25 USC 5325, to the extent that the expenditure of
the funds is supportive of a contracted program (25 USC 5325). These guidelines require internal
controls over expenditures of federal monies to ensure expenditures comply with federal regulations
and guidelines. (25 CFR 39; 25 CFR 900).
Condition
The School did not follow its Board adopted policies regarding disbursements to ensure all financial
activities were properly processed.
Cause
The School has not implemented sufficient controls over disbursement transactions. There has been
turnover in various key positions.
Effect
The School was not in compliance with Board adopted policies for federal regulations and guidelines.
Context
The sample was not intended to be, and was not, a statistically valid sample. During our review of
disbursement transactions, we noted the following:
• For one of 10 travel reimbursements reviewed, the School did not maintain supporting
documents.
• For four of 10 travel reimbursements reviewed, the School did not reimburse the expense
using the correct rates established by GSA, resulting in a net overpayment of $152.
Context
• For one of 10 travel reimbursements reviewed, meals were reimbursed with no overnight
stay or substantial sleep/rest, and the reimbursement was not reported as a taxable
employee benefit.
• For seven of 40 disbursements reviewed, no dated receiving report was retained; therefore,
we were unable to determine if the School paid goods before they were received.
Additionally, we were unable to agree the description and quantity to the purchase order.
• For 12 of 40 disbursements reviewed, the School ordered and received goods/services before
a purchase order was in place.
• For two of 40 disbursements reviewed, the expenditures exceed the authorized purchase
order amounts, resulting in total exceeded costs of $151.
• For one of 40 disbursements reviewed, the goods were received after the payment was made
to vendor.
• The School does not have a signed credit card user agreements that acknowledges the receipt
of the School credit card use policies and procedures.
• For one of 15 credit card transactions reviewed, documentation to verify the receipt of the
prepaid item was not maintained.
• Credit card statements were not always paid timely, resulting in late fees of $2,086 and
finance charges of $2,317.
• For one cutoff transaction tested, it was determined that the expenditure should have been
assessed as Construction‐in‐Process and tracked with the capital asset listing. The School did
not track how much of the project had been completed at year‐end.
• For one of 25 journal entries reviewed, the School did not maintain sufficient supporting
documentation.
• For one of five cutoff transactions reviewed, it was determined that the expenditure should
have been paid in the current fiscal year instead of the subsequent fiscal year.
• For one of five credit card purchases reviewed, there was no receipt retained.
• For 15 of 25 journal entries reviewed, the journal entry was not approved by someone other
than the preparer.
• For one of 40 disbursements reviewed, the purchase requisition was dated after the purchase
and no purchase order was provided.
• The School did not properly close out 13 open purchase orders.
Recommendation
The School should improve and adhere to its Board adopted policies and federal regulations. The
School should ensure multiple employees understand the policies and procedures, so they can
continue if there is turnover.
Views of Responsible Officials