Hunters Point Boarding School, Inc.

Finding Number: 2023‐001 Repeat Finding: Yes, 2022‐001 Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A22AV00856 Pass‐Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment Criteria Non‐federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR §§200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Condition Adequate internal controls over its procurement procedures to ensure compliance with federal regulations and guidelines and School policies were not in place. The School did not establish complete written procurement standards. In addition, the School did not follow federal guidelines for purchases exceeding the small purchases threshold. Cause The School’s internal controls over procurement of goods and services were not adequate. Effect The School was not in compliance with Federal regulations and guidelines related to procurement. Context During our review of purchasing, we noted the following: - Sealed bids were not performed in accordance with School policies. However, these purchases did not rise above the Simplified Acquisition Threshold. - For eight of 10 vendors reviewed with total expenditures below the Simplified Acquisition threshold, no documentation of quotes was maintained. - The School's policy did not include any language regarding quotes and thresholds. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The School should develop and implement policies and procedures to ensure compliance with federal procurement requirements. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2023‐002 Repeat Finding: Yes, 2022‐002 Program Name/Assistance Listing Title: COVID‐19 Education Stabilization Fund Assistance Listing Number: 84.425U Federal Agency: U.S. Department of Education Federal Award Number: A19AV00937 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Criteria All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC §§3141‐3144, 3146, and 3147). Condition The School did not determine whether laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds were paid equal to or in excess of the prevailing wage rate for the locality. Cause The School was unaware that a project completed during the year was subject to prevailing wage rate requirements. Effect The School could not demonstrate that prevailing wage rates were paid on all applicable projects during the year. Context For three projects funded by the federal grant, the School did not include required prevailing wage rate clauses in the contract or subcontract and did not obtain copies of certified payroll for each week work was performed. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The School should review all federally‐funded projects and determine which are subject to prevailing wage rate requirements. When applicable, the School should obtain certified payrolls from contractors and subcontractors to determine that prevailing wage rate requirements are met. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2023‐003 Repeat Finding: Yes, 2022‐003 Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A22AV00856 Pass‐Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting Criteria The School is required to file the Federal Financial Report, SF‐425 to report program outlays and program income as prescribed by the Federal Awarding Agency. Condition Financial reporting obligations were not met during the year. Cause Adequate review systems were not in place for management to monitor compliance with these requirements and agree amounts reported to the general ledger. Effect The School was not always in compliance with federal regulations and guidelines. Context During our review of the School's SF‐425 reports, we noted the following: - The first quarter SF‐425 report included cash receipts and disbursements from July 1, 2022, through October 22, 2022, as opposed to July 1, 2022, through September 30, 2022. - The second quarter SF‐425 report included cash receipts and disbursements from July 1, 2022, through January 27, 2023, as opposed to July 1, 2022, through December 31, 2022. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The School should implement review procedures to ensure the information reported on the Federal Financial Report, SF‐425, is accurate and appropriate. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2023‐004 Repeat Finding: No Program Name/Assistance Listing Title: COVID‐19 Education Stabilization Fund Assistance Listing Number: 84.425U Federal Agency: U.S. Department of Education Federal Award Number: A19AV00937 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Reporting Criteria The School is required to file Form 941, Employer’s Quarterly Federal Tax Returns, to report taxable wages as prescribed by the Internal Revenue Service. Further, School management is responsible for establishing and maintaining internal controls over payroll to ensure that all payroll disbursements are properly processed and recorded in accordance with the Fair Labor Standards Act (FLSA) and Internal Revenue Service (IRS) regulations. Condition The School did not have adequate internal controls over payroll processing and reporting. Cause The School’s internal controls over Form 941 reporting and payroll processing were not adequately established and implemented. Effect Reported taxable wages on the School’s fiscal year 2022‐23 Form 941 were understated. The School was not in compliance with Federal regulations and guidelines related to payroll. Context During our review of the School's Form 941 filed quarterly and the general ledger, it was determined that the School had under‐reported approximately $170,000 of taxable wages ($116,900 paid from the federal grant). In addition, for one of 40 employees reviewed, the employee was not paid for one hour of overtime. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The School should report all stipends paid on its Form 941. In addition, the School should process payroll withholdings/deductions properly from all wages, including stipends. Finally, the School should ensure that employees are paid for all time worked. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2022-001 Repeat Finding: Yes, 2021-001 Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00937 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR ?180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity (2 CFR ?180.300). CONDITION Adequate internal controls over its procurement procedures to ensure compliance with federal regulations and guidelines and School policies were not in place. The School did not establish complete written procurement standards. In addition, the School did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Lastly, the School did not follow federal guidelines for purchases exceeding the small purchases threshold. CAUSE The School?s internal controls over procurement of goods and services were not adequate. EFFECT The School was not in compliance with Federal regulations and guidelines related to suspension and debarment or procurement. CONTEXT The sample was not intended to be, and was not, a statistically valid sample. During our review of purchasing, we noted the following: - For six of seven procurements over $25,000 reviewed, documentation demonstrating a vendor check for suspension and debarment was not retained. - Sealed bids were not performed in accordance with School policies. However, these purchases did not rise above the Simplified Acquisition Threshold. - For eight of 10 vendors reviewed with total expenditures below the Simplified Acquisition threshold, no documentation of quotes was maintained. - The School's policy did not include any language regarding quotes and thresholds. RECOMMENDATION The School should develop and implement policies and procedures to ensure compliance with federal procurement requirements. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2022-002 Repeat Finding: No Program Name/Assistance Listing Title: COVID-19 Education Stabilization Fund Assistance Listing Number: 84.425U Federal Agency: U.S. Department of Education Federal Award Numbers: A19AV00937 Pass-Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions CRITERIA All laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds must be paid wages not less than those established for the locality of the project (prevailing wage rates) by the Department of Labor (DOL) (40 USC ??3141-3144, 3146, and 3147). CONDITION The School did not determine whether laborers and mechanics employed by contractors or subcontractors to work on construction contracts in excess of $2,000 financed by federal assistance funds were paid equal to or in excess of the prevailing wage rate for the locality. CAUSE The School was unaware that a project completed during the year was subject to prevailing wage rate requirements. EFFECT The School could not demonstrate that prevailing wage rates were paid on all applicable projects during the year. CONTEXT For one project funded by the federal grant, the School did not include required prevailing wage rate clauses in the contract or subcontract and did not obtain copies of certified payroll for each week work was performed. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION The School should review all federally-funded projects and determine which are subject to prevailing wage rate requirements. When applicable, the School should obtain certified payrolls from contractors and subcontractors to determine that prevailing wage rate requirements are met. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2022-003 Repeat Finding: Yes, 2021-003 Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00937 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting CRITERIA The School is required to file the Federal Financial Report, SF-425 to report program outlays and program income as prescribed by the Federal Awarding Agency. CONDITION Financial reporting obligations were not met during the year. CAUSE Adequate review systems were not in place for management to monitor compliance with these requirements and agree amounts reported to the general ledger. EFFECT The School was not always in compliance with federal regulations and guidelines. CONTEXT The sample was not intended to be, and was not, a statistically valid sample. During our review of the School's SF-425 reports, we noted the following: - The first quarter SF-425 report included cash receipts and disbursements from July 1, 2021 through October 28, 2021 as opposed to July 1, 2021 through September 30, 2021. - The third quarter SF-425 report included cash receipts and disbursements from July 1, 2021 through April 14, 2022 as opposed to July 1, 2021 through March 31, 2022. - The third quarter SF-425 federal cash receipts reported ($3,822,579) did not agree to financial support ($3,806,395) by $16,184. - The fourth quarter SF-425 report included $42,048 of non-federal revenues and $30,736 of non-federal disbursements related to quarters maintenance. RECOMMENDATION The School should implement review procedures to ensure the information reported on the Federal Financial Report, SF-425, is accurate and appropriate. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2022-004 Repeat Finding: Yes, 2021-004 Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00937 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advance payments as ?deferred revenue?) before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission and which only invest in obligations of the United States or securities that are guaranteed or insured by the United States; or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the advance funds, even in the event of a bank failure (25 USC 450e-3). CONDITION Cash balances were not fully collateralized to ensure protection of the advance funds. CAUSE Adequate review systems were not in place for management to monitor compliance with these requirements. EFFECT The School was not always in compliance with federal regulations and guidelines. CONTEXT During our review of the School?s bank accounts, a bank balance amount subject to collateralization of $5.7 million existed at June 30, 2022. The School was unable to provide collateralization documentation from the banking institution for this time period. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION Internal controls should be implemented to ensure that all cash balances are collateralized by banking institutions. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2021-001 Repeat Finding: No Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00937 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Additionally, non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR ?180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity (2 CFR ?180.300). CONDITION Adequate internal controls over its procurement procedures to ensure compliance with federal regulations and guidelines and School policies were not in place. The School did not establish complete written procurement standards. In addition, the School did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. Lastly, the School did not follow federal guidelines for purchases exceeding the small purchases threshold. CAUSE The School?s internal controls over procurement of goods and services were not adequate. EFFECT The School was not in compliance with Federal regulations and guidelines related to suspension and debarment or procurement. CONTEXT The sample was not intended to be, and was not, a statistically valid sample. During our review of purchasing, we noted the following: For procurements over $25,000 reviewed, documentation demonstrating a vendor check for suspension and debarment was not retained. Sealed bids were not performed in accordance with School policies. However, these purchases did not rise above the Simplified Acquisition Threshold. For all vendors reviewed with total expenditures below the Simplified Acquisition threshold, no documentation of quotes was maintained. The School policy did not include any language regarding quotes. The School did not prepare and maintain documentation in accordance with School policy for the determination that there was only one source and that the determination was reasonable. RECOMMENDATION The School should develop and implement policies and procedures to ensure compliance with federal procurement requirements. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2021-002 Repeat Finding: No Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00937 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions CRITERIA According to the Indian Child Protection and Family Violence Protection Act (25 USC 3201 et seq.), the School must conduct a character investigation of each individual who is employed or is being considered for employment in a position that involves regular conduct with, or control over, Indian children. The investigation should be reinvestigated every five years. In addition, individuals in those positions must meet the required standards of character no less stringent than those prescribed under subpart B ? Minimum Standards of Character and Suitability for Employment (25 CFR part 63). CONDITION Current and timely character investigations were not retained for all employees. For individuals with items noted on their character investigation, documentation was not retained for the analysis and determination of said items. CAUSE Due to staff turnover, School policies were not always followed and controls were not in place to ensure character reinvestigations were performed timely. EFFECT The School was not in compliance with the Indian Child Protection and Family Violence Protection Act. CONTEXT During our review of the School?s character investigations, we noted for two of 27 character investigations reviewed, the five year reinvestigation was not completed timely. Additionally, for two of 27 character investigations reviewed, there were items noted in the character investigation but no documentation of the analysis and determination that items did not prevent the employee from being an appropriate hire. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION Internal controls should be implemented to ensure that all employees have a current background investigation in effect at all times. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2021-003 Repeat Finding: No Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00937 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting CRITERIA The School is required to file the Federal Financial Report, SF-425 to report program outlays and program income as prescribed by the Federal Awarding Agency. CONDITION Financial reporting obligations were not met during the year. CAUSE Adequate review systems were not in place for management to monitor compliance with these requirements and agree amounts reported to the general ledger. EFFECT The School was not always in compliance with federal regulations and guidelines. CONTEXT The sample was not intended to be, and was not, a statistically valid sample. During our review of federal compliance, we noted the following: Amounts reported on the SF-425 reports did not agree to the underlying School financial records. Two of the four quarterly SF-425 reports were not submitted timely. RECOMMENDATION The School should implement review procedures to ensure the information reported on the Federal Financial Report, SF-425, is accurate and appropriate, and submitted timely. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2021-004 Repeat Finding: No Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00937 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advance payments as ?deferred revenue?) before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission and which only invest in obligations of the United States or securities that are guaranteed or insured by the United States; or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the advance funds, even in the event of a bank failure (25 USC 450e-3). CONDITION Cash balances were not fully collateralized to ensure protection of the advance funds. CAUSE Adequate review systems were not in place for management to monitor compliance with these requirements. EFFECT The School was not always in compliance with federal regulations and guidelines. CONTEXT During our review of the School?s bank accounts, we noted a bank balance amount subject to collateralization of $4.9 million. The School was unable to provide any collateralization documentation from the banking institution. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION Internal controls should be implemented to ensure that all cash balances are collateralized by banking institutions. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

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