Finding Text
2022-004 Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Material Weakness in
Internal Controls over Compliance) - Modified and Repeated (Prior Year Finding 2021-004) Criteria or Specific Requirement:
To help ensure that expenditures charged to the programs are allowed:
By the grant agreements and to comply with 2 Code of Federal Regulations (CFR) §225,
Appendix B, the School should maintain all supporting documentation, including reviewed and
approved invoices.
All costs should support the objectives of the grant.
Condition:
During our testwork over expenditures we noted the following deficiencies:
Indian School Equalization Program (Basic Ops) and Indian School Equalization Program (Basic
Dorms) (ALN 15.042) - For 3 of the 20 transactions tested, adequate supporting documents
were not provided to substantiate the payments.
Administrative Cost Grant for Indian Schools (ALN 15.046) – For 10 of the 35 transactions
tested, adequate supporting documents were not provided to substantiate the payments.
Coronavirus Response and Relief Supplemental Appropriations, Act 2021 (CRRSA Act) and
American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP) (ALN
84.425) – For 8 of the 14 transactions tested, adequate supporting documents were not
provided to substantiate the payments. Questioned Costs:
Indian School Equalization Program (Basic Ops) and Indian School Equalization Program (Basic
Dorms) (ALN 15.042) - $761.
Administrative Cost Grant for Indian Schools (ALN 15.046) - $173,843.
Coronavirus Response and Relief Supplemental Appropriations, Act 2021 (CRRSA Act) and
American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP) (ALN
84.425) - $280,136.
Cause:
The School did not follow its policies and procedures.
Effect:
There is an increased risk of payments being made for goods or services not received and of unallowable
charges to the federal programs or with complying with federal program requirements for claiming
administrative costs.
Auditor's Recommendations:
To help ensure that expenditures are allowable and to help maintain an effective internal control
environment over expenditures, the School should require personnel to follow the existing policies and
procedures for obtaining, reviewing and approving expenditure transactions. In addition, the School
should ensure that all supporting documentation is properly maintained and that expenditures are based
on actual costs.
Management Response:
Management agrees with the auditor's finding. Internal Controls did not exist during the audit period due
to lack of staff in the business office and lack of understanding in the administration staff. The school has
since hired a consulting firm to assist with following the existing policies and procedures. The school also
has hired an experienced Principal to oversee the operations of the business office.
Anticipated Completion Date:
June 30, 2023.
Responsible Party:
Delores Noble, Principal.
Amber Wauneka, Consultant with Homeland Business Services.