LITTLE EAGLE GRANT SCHOOL

AL 15.042: Indian School Equalization & AL 84.010: Title I – Activities Allowed or Unallowed – Significant Deficiency Criteria Per Uniform Guidance (2 CFR Part 200.430), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls that ensures payroll costs charged to federal awards are reasonable, allocable, and properly documented. Budget estimates may be used for interim accounting purposes but must be reconciled to actual activity and adjusted as necessary. Condition During our testing of payroll expenditures, we noted that payroll costs for employees were charged based on budgeted percentage allocations rather than actual time worked on the program. The auditee did not perform periodic reconciliations of the budgeted percentages to employees’ actual activities. Additionally, budgeted payroll percentages were charged incorrectly as described below. Title I: One payroll transaction was not allocated in accordance with the budgeted percentage that was in the budget that is submitted to the grant. ISEP: One payroll transaction was not allocated in accordance with the budgeted percentage that was in the budget that is submitted to the grant. Another transaction was missing the supporting timesheet. Cause The auditee does not have adequate internal controls in place to ensure payroll costs charged to federal programs are periodically reviewed and adjusted to reflect actual work performed. Management indicated that payroll allocations were established at the beginning of the grant period and were not subsequently reconciled to actual staff activity. Effect As a result, payroll costs charged to the federal award may not accurately reflect the actual level of effort devoted to the program, resulting in a risk that costs charged to the federal program could be unallowable or not allocable under federal regulations. Questioned Costs None identified. However, due to the lack of documentation supporting actual time worked, we were unable to determine whether the payroll charges tested were fully supported. Repeat Finding This is a new finding in the current year. Recommendation We recommend that the auditee implement procedures to ensure payroll costs charged to federal awards are supported by records that accurately reflect the work performed. Such procedures should include: - Maintaining appropriate personnel activity or equivalent documentation reflecting actual work performed. - Performing periodic reconciliations between budgeted allocations and actual staff activity. - Adjusting payroll charges to federal programs when actual effort differs from budgeted percentages. View of Responsible Officials and Planned Corrective Actions Little Eagle Grant School acknowledges the finding regarding insufficient payroll documentation. To address this, the School will implement a standardized certification form to be submitted with each employee timesheet. This form will require employees to certify that their time and effort were performed in accordance with the approved budget and assigned funding source(s). This process will strengthen documentation and ensure compliance with federal requirements moving forward.

AL 84.010 Special Tests & Provisions: Test Security Measures: Significant Deficiency Criteria Per the Uniform Guidance, LEAs are required to have policies and procedures for ensuring that the LEA and its schools implement test security measures. Condition During our testing of the Title I program, we were unable to obtain the school’s policy detailing test security measures. Cause At the end of the fiscal year, there was turnover in the business manager position. The new business manager was unable to locate the test security policy. Effect The school may not have adequate security measures in place over tests and assessments. Questioned Costs None Repeat Finding This is a new finding in the current year. Recommendation We recommend that the School document and put into practice adequate security measures over tests and assessments. View of Responsible Officials and Planned Corrective Actions Little Eagle Grant School acknowledges the finding regarding being unable to provide the schools policy detailing test security measures. The school has drafted a policy regarding the entire Title I program that will be approved on March 30, 2026.

2024-004 – AL 15.042: Indian School Equalization & AL 84.010: Title I – Activities Allowed or Unallowed – Significant Deficiency Criteria The expenditure of funds is restricted to those federal programs covered by the grant. The Tribally Controlled Schools Act provides for the expenditure of funds by Indian tribes and tribal organizations under grants for education-related programs and activities, including school operations, academic, educational, residential, guidance and counseling, and administrative purposes, and support services for the school, including transportation and maintenance and repair costs (25 USC 2502). Condition Unallowable costs were identified and charged to ISEP and Title I grant funds. Cause Purchases of washers, dryers, air fryers, and other household items described as ‘Parent night door prizes’ and ‘door prizes’ were made and were funded by federal funds. Effect Unallowable costs may have been charged to the grant. Questioned Costs AL 84.010: $ 367 AL 15.042: $1,095 Repeat Finding This is a new finding in the current year. Recommendation Any door prizes or incentives for parents should be funded through general fund revenues. View of Responsible Officials and Planned Corrective Actions Management recommends the school purchasers and purchasing supervisors use IRS De Minimus standards for all gifts, including door prizes. Management also recommends school personnel get proper approval before making any purchases with school funding.

2024-005 – AL 15.042: Indian School Equalization & AL 15.047: Indian Education Facilities, Operations & Maintenance – Activities Allowed or Unallowed – Significant Deficiency Criteria The School’s internal controls over compliance require that an invoice and purchase order be provided and approved for all transactions that are reimbursed by grant funds. Condition There was one transaction reimbursed by AL 15.047 and one transaction reimbursed by AL 15.042 that did not have invoices to support the transaction that was recorded in the general ledger detail. Cause Invoices were not provided to support the purchase made. Effect Unallowable costs may have been charged to the grant. Questioned Costs None Repeat Finding This is a new finding in the current year. Recommendation Invoices and approved purchase orders should be presented and approved for all transactions that are reimbursed by grant funds. View of Responsible Officials and Planned Corrective Actions Management recommends all school personnel follow the purchase order process when making any purchases with school funding, as established by the School Board. Management has also started the practice of scanning all purchase documents onto every purchase transaction in order to eliminate the possibility of lost or misplaced documents.

Criteria A key control surrounding the purchase process is the retention of supporting documentation to ensure proper amounts are paid and cost is allowable. Condition Supporting documentation could not be obtained for one item of our disbursement sample of forty items. During our testing, we were unable to verify if the vendor was paid the correct amount and if the cost was allowable as the support for the transaction was unable to be located. Cause Supporting documentation was not available for review during the audit. Effect An unallowable cost could be charged to the grant. Questioned Costs CFDA 84.425 $91 Recommendation We recommend that the District maintain proper supporting documentation such as invoices to ensure proper payment and support allowable costs.

Criteria A key control surrounding the payroll process is the approval of all employee contracts to ensure employees? are being paid the proper amount. Condition Documented approval of pay rates for three individuals could not be obtained for our disbursement samples totaling fifty. During our testing, there was some extra duty and substitute pay that we were unable to verify if they were paid the correct rate as the support for the approved payrate was unable to be located. In addition, documented approval of time sheets for two individuals could not be obtained. During our testing, we were unable to verify if they were paid the correct amount as the support for the approved time sheet was unable to be located. Cause Documentation of approved pay rates and time sheets was not available for review during the audit. Effect Individuals could be paid more or less than approved. Questioned Costs CFDA 15.047 $17,499 CFDA 15.042 $77,575 Recommendation We recommend that the District maintain proper supporting documentation such as employee contracts and time sheets for all employees to ensure payment of approved salaries and payrates. View of Responsible Officials and Planned Corrective Actions The school has a strict process in place to avoid payments being made to personnel without the proper approval. All payments made for extra duties or temporary assignments should be accompanied with the proper approval as outlined in the school policy. Moving forward, a report will be provided to the Board of any requests for payment to personnel that do not have the proper approval as outlined in the policy. The requests will be denied until the appropriate approvals are made and the documentation process is completed. Indication of Repeat Finding This is a repeat of finding 2019-003 from the prior year.

Criteria All new employees, for positions requiring student interaction, are subject to a background check. Evidence should be kept in each employee?s file documenting checks on national, state,and local databases. Condition There was no supporting documentation for a search on the national sex offender database for one of five employees tested. Cause Supporting documentation is not being maintained in all employee files. Effect Individuals with criminal records could be hired to a position requiring student interaction. Questioned Costs $0 Recommendation We recommend that the District maintain proper supporting documentation of employee background checks to ensure employee?s with criminal records are not put in positions with access to children. Each employee file should contain a checklist to ensure all supporting documentation is in each employee file. View of Responsible Officials and Planned Corrective Actions It is my belief that the proper check was made at the time of hire but the document has since been misplaced, or lost. Moving forward, an additional electronic file will be kept for each new hire. A new hire checklist will be made for each staff member. This new hire checklist will be updated throughout the hiring process and signed by both the Business Office Manager and Principal. An electronic copy will be made of the completed check list along with all background checks. Indication of Repeat Finding This is a new finding in the current year.

Criteria The School should follow their documented and approved procurement policy. Condition The School has approved a formal procurement policy for purchases less than $5,000. The policy requires that three quotes from different vendors should be obtained for all equipment purchases less than $5,000. Cause During our testing, evidence documenting quotes from three different vendors was not available for the equipment purchased with grant funds in the current year. Effect Competitive pricing for equipment purchases cannot be ensured. Questioned Costs $0 Recommendation We recommend that the District maintain proper supporting documentation of equipment purchases in order to ensure competition in the procurement process. View of Responsible Officials and Planned Corrective Actions The Business Office will work with the rest of the administrative team to ensure the proper procedures are followed as stated in the school?s policy. Any purchases made without the proper supporting documentation will be reported to the Principal and Board. Any requests for payments on such purchases without proper documentation will be recommended for disapproval. Indication of Repeat Finding This is a new finding in the current year.

Criteria: A key control surrounding the payroll process is the approval of all employee contracts to ensure employees' are being paid the proper amount. Condition: Documented approval of pay rates for two individuals could not be obtained in our disbursement sample of 25. During our testing, there was some extra duty pay that we were unable to verify if they were paid the correct rate as the support for the approved payrate was unable to be located. Cause: Documentation of approved pay rates was not available for review during the audit. Effect: Individuals could be paid more or less than approved. Recommendation: We recommend that the District maintain proper supporting documentation such as employee contracts for all employees to ensure payment of approved salaries and payrates.

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