UNITED TRIBES TECHNICAL COLLEGETribal Government

Significant Deficiency – Debt Service Reserve Fund – Special Tests & Provisions Federal Awards 10.766 – Community Facilities Loans and Grants Condition The loan agreement with the USDA requires a debt service reserve fund equal to at least 10% of one annual loan installment that accumulates at the rate of 10% of one annual payment per year for ten years or until the balance is equal to one annual loan payment. Funds cannot be disbursed from the debt service reserve fund without the approval of USDA beforehand. Criteria During our audit, we noted the College disbursed funds from the debt service reserve fund without the approval of USDA. Cause The College set up the fund to make annual principal payments. They did not understand that the fund was for future reserves. Effect The College was not in compliance with the loan agreement. Recommendation We recommend the College not disburse funds from the debt service reserve fund without the approval of USDA in accordance with the loan agreement. Views of Responsible Officials and Planned Corrective Actions The USDA loan was paid in full on December 10, 2025. Indication of Repeat Finding This is a repeat of finding 2024-002.

Federal Awards 10.766 – Community Facilities Loans and Grants Condition The loan agreement with the USDA requires a debt service reserve fund equal to at least 10% of one annual loan installment that accumulates at the rate of 10% of one annual payment per year for ten years or until the balance is equal to one annual loan payment. Criteria: During our audit, we noted the College did not set up a debt reserve fund. Cause: The College did not set up a debt reserve fund for the USDA loan. Effect: The College was not in compliance with the loan agreement. Recommendation: We recommend the College set up a debt reserve fund in accordance with the loan agreement. Views of Responsible Officials and Planned Corrective Actions Account has been created and payment has been made.

Significant Deficiency – Allowable Costs/Costs Principles Federal Awards 84.245A – Tribally Controlled Postsecondary Career and Technical Institutions Condition The College should charge costs to the grant which are allowable. Also, documentation should be kept that supports that employees are being paid the correct amounts based on approved rates to ensure only approved amounts are charged to the grant. Criteria: Of the 25 payroll transactions tested, we noted one instance where payroll was misallocated to the grant. Cause: The College did not properly execute its policies and procedures for review of payroll disbursements. Effect: Grant awards potentially overcharged. Questioned Costs: $9,827 Recommendation: We recommend the College follow and properly execute its procedures it has in place relating to payroll expenditures. Views of Responsible Officials and Planned Corrective Actions Training has been provided and journal entries will be reviewed prior to posting.

Significant Deficiency – Allowable Costs/Costs Principles Federal Awards 84.245 – Tribally Controlled Postsecondary Career and Technical Institutions Condition The College should charge costs to the grant which are allowable. Also, documentation should be kept that supports that disbursements are being made in the correct amounts based on invoices to ensure only approved amounts are charged to the grant. Criteria: Of the 15 non-payroll transactions tested, we noted one instance where the disbursement was misallocated to the grant. Cause: The College did not properly execute its policies and procedures for reviewing non-payroll disbursements. Effect: Grant awards potentially overcharged. Questioned Costs: $127 Recommendation: We recommend the College follow and properly execute its procedures it has in place relating to non-payroll expenditures. Views of Responsible Officials and Planned Corrective Actions Staff has been hired and trained. Journal entries will be reviewed prior to posting.

Federal Awards 15.042 – Indian School Equalization 15.060 – Indian Vocational Training United Tribes Technical College 47.070 – Computer and Information Science and Engineering 47.076 – Education and Human Resources (R&D) 84.245A – Tribally Controlled Postsecondary Career and Technical Institutions 84.299A – Indian Education – Special Programs for Indian Children 84.425F – HEERF Institutional Support 84.425K – HEERF Tribally Controlled Colleges and Universities (TCCUs) Condition The College operated its indirect cost plan during the year without an approved indirect cost rate. The final approved IDC rate was received on January 12, 2024. Criteria: The Office of Management & Budget’s Uniform Guidance requires that the College receive approval of its indirect cost recovery rate whenever federal and state funded programs are to be charged to the plan. Current year plans are required to be submitted no later than six months following the close of the prior fiscal year. These plans are sent to the U.S. Department of Interior – Interior Business Center (IBC) for approval and determination of an allowable cost recovery rate. Cause: The College has not submitted (in a timely manner) an indirect cost rate proposal / plan to the IBC for review and approval. Effect: The College was using a provisional IDC rate during the year to charge indirect costs. Recommendation: Submission of the College’s indirect cost plan in a timely manner to IBC for plan and rate approval. Views of Responsible Officials and Planned Corrective Actions The FY23 and FY24 Indirect Costs Proposals were submitted and approved in January 2024. The College adjusted the IDC collections for FY23 and is currently using the FY24 IDC approved rate. The College continues to use an outside entity to work with UTTC Finance staff to complete future IDC Proposals in a timely manner. We expect the FY 25 and FY26 IDC Proposal to be submitted by December 31, 2024. The CFO is responsible to ensure this is completed.