NARRAGANSETT INDIAN TRIBETribal Government

Internal Controls and Compliance over Allowable Cost and Allowable Activity - Expenditures Federal Program Information: Funding agency: Department of the Interior Department of Treasury Department of Health and Human Services Title: Aid to Tribal Government Consolidated Tribal Government Programs Coronavirus State and Local Fiscal Recovery Funds Child Care and Development Block Grant & Child Care Mandatory and Matching Funds of the Child Care and Development Fund - Clusters AL number: 15.020; 15,021; 21.027; 93.575 & 93.596 Award year and number: A08AV0089; SLT0380 and 21PARICDC6 & 22PARICCDF Criteria or Specific Requirement: Effective internal controls over the expenditure process should be properly designed to provide assurance of meeting compliance requirements and should operate effectively. All disbursements should have proper written authorization supported with adequate documentation. Disbursement policies and procedures require the signature of the Finance Director and Tribal Administrator or Chief Sachem for authorization. If the Finance Director is unavailable, his signing authority is delegated to Chief Sachem via a delegation of authority form, who is already a required signer. Condition: During our testing of controls over expenditures and capital asset additions, the following exceptions were noted: AL 15.020 The Tribe paid one individual a total of $2,300 for expenditures related to the public health emergency with respect to Covid-19 without adequate approval. They were missing the Finance Director approval. In addition, because of the inadequate support provided we were unable to determine whether the expenditures were allowable costs or allowable activities. On the capital asset additions testing, two samples totaling $19,588 were missing the Finance Director approval and the required three bids with council approval. AL 15.021 On the expenditure testing, out of thirty samples tested, ten samples totaling $10,166 had supporting documentation that was inadequate and we were unable to determine whether the expenditures were an allowable cost or allowable activity. Without any documented delegation support, we were unable to determine the delegation authority of the Finance Director for two samples totaling $3,573 of the thirty samples tested. On the capital asset additions testing, one sample of $1,981 was missing the Finance Director approval and the required three bids with council approval. AL 21.027 On the expenditure testing, out of thirty samples, nine samples totaling $22,000 had inadequate supporting documentation. Therefore, we were unable to determine whether the expenditures were an allowable cost or allowable activity. The Tribe paid one individual a total of $600 for an expenditure related to the public health emergency with respect to Covid-19 without the Finance Director approval. On the capital asset additions testing, out of five samples tested, three samples totaling $14,175 were missing the Finance Director approval and one sample of $5,175 was missing the required three bids with council approval. AL 93.575 & 93.596 On the expenditure testing, out of thirty samples selected we were not provided any supporting documents for four samples totaling $4,857. In addition, four samples totaling $3,454 had inadequate supporting documentation. Therefore, we were unable to determine whether the expenditures were an allowable cost or allowable activity. Two samples totaling $810 were missing the Finance Director approval. On the capital asset additions testing, out of four samples tested, three samples totaling $84,217 were missing the Finance Director approval and one sample of $14,568 was missing the required three bids with council approval. Follow up on 2021 AL 21.019 finding On the expenditure testing, out of the twenty five samples tested, five samples totaling $11,873 were missing supporting documentation. Six samples totaling $10,990 had supporting documentation provided that was inadequate. Therefore, we were unable to determine whether the expenditures were an allowable cost or allowable activity. The Tribe paid one individual a total of $1,500 for expenditures related to the public health emergency with respect to Covid-19 without adequate supporting documentation. Therefore, we were unable to determine whether the expenditures were allowable costs or allowable activities. On the capital asset additions testing, two samples totaling $15,000 had supporting documentation that was inadequate. Therefore, we were unable to determine whether the expenditures were an allowable cost or an allowable activity. Three samples tested totaling $28,400 were missing the Finance Director approval. Context: We inquired with management and tested two hundred and nine expenditure samples. Questioned Costs: AL 15.020 $600 and prior year follow up AL 21.019 $1,500. Effect: The lack of effective and consistent internal controls exposes the Tribe to a greater risk of fraudulent activities. Cause: Internal control procedures are not properly designed to ensure transactions are authorized prior to payments. Repeat: Yes - Years as Repeat Finding: Three 2021-004 Auditor's Recommendation: We recommend the Tribe strengthen its implementation on controls over disbursement. View of Responsible Officials: Management agrees with the audit finding and they have a plan in place to correct the finding.

Allowable Costs - Premium/Hazard Pay Federal Program Information: Funding agency: Department of Treasury Title: Coronavirus State and Local Fiscal Recovery Funds AL number: 21.027 Award year and number: 2021 Criteria or Specific Requirement: The Coronavirus State and Local Fiscal Recovery Funds may be used to provide premium pay to eligible workers performing essential work during the Covid-19 public health emergency. The American Rescue Plan Act defines premium pay as an amount up to $13 per hour, in addition to wages or remuneration the worker otherwise receives. Premium pay is limited to an aggregate amount not to exceed $25,000 per eligible worker during the program. Condition: Twenty seven employees received more than $25,000 as of December 31, 2022. The total amount exceeded $25,000 is $161,250. Context: We reviewed seventy eight employees who were paid premium/hazard pay. Questioned Costs: $161,250. Effect: Noncompliance with requirements may result in negative impacts on funding. Cause: Management did not monitor the requirements to ensure premium/hazard pay did not exceed $25,000 per eligible worker during the program. Repeat: No Auditor's Recommendation: We recommend management monitor its premium/hazard pay to ensure the amount paid out did not exceed $25,000 per eligible worker during the program. View of Responsible Officials: Management agrees with the audit finding and they have a plan in place to correct the finding.

Matching, Level of Effort, Earmarking Federal Program Information: Funding agency: Department of Health and Human Services Title: Child Care and Development Block Grant & Child Care Mandatory and Matching Funds of the Child Care and Development Fund - Clusters AL number: 93.575 & 93.596 Award year and number: 21PARICDC6 & 22PARICCDF Criteria or Specific Requirement: AL 93.596 award was approved for cost sharing or matching. The Tribe is allowed 15% of the amount expended under AL 93.596 for administrative costs. Condition: During our compliance testing the following exceptions were noted: AL 93.575 We were not given copies of the award in its entirety to determine what is approved for cost sharing or matching. AL 93.596 We were not given copies of the award in its entirety to determine if there is the 15% administrative costs and we were not able to determine if there is any matching. Context: We had discussions with management and examined award letters that were provided to us. Questioned Costs: None. Effect: Noncompliance with requirements may result in negative impacts on funding. Cause: Management did not properly implement matching and administrative costs requirements. Repeat: No Auditor's Recommendation: We recommend management gain a better understanding of program matching and administrative costs and follow through with implementation. View of Responsible Officials: Management agrees with the audit finding and they have a plan in place to correct the finding.