Finding Text
2022-005 Internal Controls and Compliance over Reporting (Significant Deficiency) Criteria or Specific Requirement:
The School is responsible for establishing and maintaining internal controls over financial reporting,
including general ledger controls and compliance requirements over federal funding that are adequate to
ensure that a material misstatement would be prevented and/or detected. Additionally, the School is
required to report cumulative program outlays and program income on the Federal Financial, SF-425 (7
CFR § 2500.046). Quarterly reports are required to be submitted no later than 30 days after the end of
each reporting period. Annual reports are required to be submitted no later than 90 days at the end of
each reporting period.
In accordance with 2 CFR 200.512, the single audit must be completed, and the data collection form and
reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor’s
report(s), or nine months after the end of the audit period.
Condition:
The School did not have adequate controls in place over financial reporting including revenues and
federal reporting compliance.
Cause:
There was turnover in School personnel and a lack of established internal controls and procedures over
the reporting process to ensure timely and accurate reporting.
Effect:
The School was not in compliance with federal regulations and guidelines. Auditor's Recommendation:
The School should ensure adequate reviews of revenue reporting are conducted to ensure amounts are
recorded in the correct fiscal year. In addition, the School should maintain documentation to support the
appropriate and timely submission of the Federal Financial Report, SF-425 and implement internal
controls to ensure timely completion of the single audit.
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.