Finding 565321 (2022-103)

Finding 2022-103 Allocation of Forest Reserve Funds (Repeat Finding) (Material Weakness, Compliance Finding) Assistance Listing Number: 10.665 Cluster Title: Forest Service Schools and Roads Cluster Program Title: Schools and Roads – Grants to States Federal Agency: U.S. Department of Agriculture Award Year: 2021 Award Number: None Compliance Requirements: Special Tests and Provisions Question Costs: None Criteria: Arizona Revised Statutes (A.R.S.) 11-497 requires that the counties’ share of pass-through forest reserve monies from the United States be disbursed for the benefit of public schools and public roads at the direction of the board of supervisors. Further, a county may allocate a disproportionate amount of forest reserve monies between public schools and public roads as long as both categories receive a real benefit. Condition and context: Forest reserve monies for Apache County were not properly disbursed for the benefit of public schools and public roads in accordance with A.R.S. 11-497. The County instead disbursed the entire annual allocation of $644,597 to public school districts. This finding is similar to prior year finding 2021-103. Cause: The cause is that the Apache County Board of Supervisors decided that the County public schools had a greater need for funding than roads projects. Effect: The effect is that the County did not expend a portion of the grant monies on public roads and therefore knowingly continued to violate state statute. Recommendation: We recommend that the County stop violating state statute and distribute forest reserve monies in a manner that benefits both public schools and public roads as required by A.R.S. 11-497. County’s Response: The County’s responsible officials’ views and planned corrective action are in its corrective action plan at the end of the report.