FAC Explorer

Finding 529195 (2024-002)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-03-20
Audit: 347177
Organization: Many Farms Community School, Inc. (AZ)
Auditor: Cwdl Certified Public Accountants

AI Summary

  • Core Issue: The School failed to conduct timely character investigations for employees with regular contact with Indian children.
  • Impacted Requirements: This violates the Indian Child Protection and Family Violence Protection Act, which mandates background checks every five years.
  • Recommended Follow-Up: Review and update human resources procedures to ensure compliance with character investigation requirements for all relevant employees.

Finding Text

Finding Number: 2024-002 Repeat Finding: No. Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A23AV00836 Questioned Costs: None Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Criteria: According to the Indian Child Protection and Family Violence Protection Act (25 USC §3201 et. Sec.), the School must conduct a character investigation of each individual who is employed or is being considered for employment in a position that involves regular contact with, or control over, Indian children. The investigation should be reinvestigated every five years. The Act further states that the School may employee individuals in those positions only if the individuals meet standards of character, no less stringent than those prescribed under subpart B – Minimum Standards of Character and Suitability for Employment (25 CFR part 63). Condition: The School did not have timely character investigations performed for all employees. Effect: Noncompliance with federal regulation. Cause: Management oversight. Context: For two of 7 employees tested, the School did not maintain a current and full background check and character investigation on file. Recommendation: The School should review its human resources procedures to ensure that current character investigations are maintained for all required employees. Response: The School’s responses are presented in a separate document. Contact person: Ernest Sakeva, Business Manager

Corrective Action Plan

CORRECTIVE ACTION PLAN U.S. Department of the Interior Many Farms Community School, Inc. respectfully submits the following corrective action plan for the year ended June 30, 2024. Audit period: July 1, 2023 – June 30, 2024 The findings from the schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. FINDINGS—FINANCIAL STATEMENT AUDIT 2024-001 Internal Control Over Financial Reporting Type of Finding: Material Weakness in Internal Control Over Financial Reporting Condition: According to generally accepted accounting principles (GAAP), School management is responsible for establishing and maintaining internal controls over financial reporting, to include controls over the School’s accounting records and general ledger transactions. These internal control procedures should include ensuring expenditures are recorded within the correct fiscal year and that revenue and expenditure transactions are properly recorded within the General Ledger. Context: During our review of the School’s accounting records, we noted the following:  The School erroneously recorded $215,173 in expenditures on a fiscal year 2023-2024 encumbrance voucher. This was due to an issue in the financial reporting software with the purchase order not rolling to fiscal year 2024-2025.An audit adjustment was recorded to reverse the expenditures.  An audit adjustment was recorded to accrue an E-Rate reimbursement of $112,919 that was received within the encumbrance period.  The School does not currently have access to its investment account; due to turnover the School does not currently have an authorized signer for the account. The June 2024 statement shows a balance of $2,772,353. The School is currently in litigation to get access to the account. Repeat Finding: Repeated and modified. Action planned in response to finding: The School will implement additional procedures to review revenues and expenditures to ensure that they are recorded in the proper accounting period. Additionally, the School will complete the litigation process to regain access to its investment account. Planned completion date for corrective action plan: For the period ending June 30, 2025. Name of the contact person responsible for corrective action: Ernest Sakeva, Business Manager

Categories

Special Tests & Provisions Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1105637 2024-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
15.042 Indian School Equalization $4.26M
15.047 Indian Education Facilities, Operations, and Maintenance $1.24M
15.046 Administrative Cost Grants for Indian Schools $1.04M
84.010 Title I Grants to Local Educational Agencies $911,937
84.027 Special Education Grants to States $490,676
15.044 Indian Schools Student Transportation $482,575
15.043 Indian Child and Family Education $353,502
10.555 National School Lunch Program $241,506
84.287 Twenty-First Century Community Learning Centers $160,416
84.336 Teacher Quality Partnership Grants $147,442
10.553 School Breakfast Program $111,779
84.425 Education Stabilization Fund $96,251
84.377 School Improvement Grants $45,990
84.060 Indian Education Grants to Local Educational Agencies $40,524
84.196 Education for Homeless Children and Youth $11,524
84.424 Student Support and Academic Enrichment Program $1,614