SISSETON-WAHPETON COLLEGE

Federal Program Research and Development Cluster AL #47.076, AL #47.083, AL #93.859 Criteria The College is required to comply with grant cash management requirements. Condition It was noted the College drew down more cash than they had expenditures to cover. As the grant requirements state that the grant operates on a reimbursement basis, the College was not in compliance with cash management requirements. Questioned Costs None Context We reviewed the College’s drawdown requests and compared them to expenditures incurred, noting more drawdown monies requested than expenditures. Effect The College drew down excess grant funds during the year ended June 30, 2023. Cause Review procedures over grant drawdowns have not been effectively designed and implemented. Repeat Finding Not a repeat finding. Recommendation We recommend the College reviews its policy for reviewing drawdown requests to ensure that an appropriate level of review before the drawdown is submitted. Views of Responsible Officials Management recognizes the deficiency and plans to change the process for how the College calculates the drawdown.

2022-003 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The College is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. 2 CFR 200.403(h) establishes that costs must be incurred during the approved budget period. Condition: In our sample of expenditures selected for testing, we noted the following items; a) Through testing of operational expenditures of the College, it was determined; a. Payroll expenditures charged to the award were not for costs newly associated with the coronavirus, a requirement communicated within the supplemental guidance in the Higher Education Emergency Relief Fund III Frequently Asked Questions published May 11, 2021 and updated May 24, 2021. b) Through testing of disbursements to students, it was determined; a. No support could not be provided to substantiate a secondary level of review was completed prior to disbursement of funds. b. 26 instances identified in which the College directly controlled how student?s use their emergency financial aid grant. c. 8 instances identified in which college discharged outstanding balance on student account for costs incurred prior to March 13, 2020. d. 2 instances identified in which the College charged coronavirus vaccine incentive payments under the student portion of HEERF award. Cause: The College did not have a full understanding of the federal program requirements between HEERF I, II and III as it relates to Activities Allowed, Allowable Costs, and Period of Performance. Effect: The College?s controls did not detect or correct the errors identified, which resulted in disallowed costs charged to the federal awards. Questioned Costs: Total questioned costs of $2,219,674Context/Sampling: a) For operational expenditures of the College a nonstatistical sample of 60 expenditures was selected for testing, including 7 non-payroll expenditures out of approximately 50 non-payroll transactions, accounting for approximately $143,000 of $245,000 total non-payroll costs charged to the federal program, and 53 payroll expenditures out of approximately 6,700 payroll transactions, accounting for approximately $74,000 of $1,920,000 total payroll costs charged to the federal program. b) For disbursements to students of the College a nonstatistical sample of 60 expenditures was selected for testing, including 43 disbursements funded from institutional portion out of approximately 600, accounting for approximately $53,000 of $711,000 total disbursements to students funded through institutional portion charged to the federal program, and 17 disbursements funded from student portion out of approximately 400, accounting for approximately $74,000 of $246,000 total disbursements to students funded through student portion charged to the federal program. Repeat Finding from Prior Year: No Recommendation: We recommend management review procedures and control processes to comply with federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.

2022-004 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.327 and 2 CFR 200.328 require the auditee to collect financial information and monitor its activities under federal awards to assure compliance with applicable federal requirements and performance expectations are being achieved and report these items in accordance with the program requirements. Condition: In our sample of reports selected for testing, we noted the following items; a) No support could be provided to substantiate a secondary level of review was completed for student and institutional portion quarterly reports for the quarters ended 12/31/2021 and 3/31/2022 and the year two annual report. b) Student portion quarterly reports ending 12/31/2021 and 3/31/2022 reported cumulative expenditures incurred from the inception of the federal program rather than expenditures incurred within the quarter, resulting in an error of $105,202 in the first report and $165,154 in the second report. Cause: There was a lapse in oversight of the internal control process ensuring expenditures reported were accurate and reconciled to supporting documentation. The College failed to identify the change in reporting requirements between HEERF awards. Effect: The College?s controls did not detect or correct the errors identified, which resulted in inaccurate expenditures reported within HEERF quarterly reports. Additionally, not having a formal oversight process over reporting results in a reasonable possibility that reports that are inaccurate or incomplete could be submitted. Questioned Costs: None reported. Context/Sampling: Four out of eight quarterly reports were reviewed along with one annual report. Repeat Finding from Prior Year: Yes, prior year finding 2021-003. Recommendation: We recommend that management implement procedures and control processes to comply with the federal requirements noted above and ensure documentation is retained supporting a secondary level of review is completed prior to submission of required reports. Views of Responsible Officials: Management is in agreement with the finding.

2022-005 Department of Education Federal Financial Assistance Listing 84.425E, 84.425F, 84.425K Federal Award Numbers P425E201501, P425E201757, P425E200021, award year 2021 COVID-19 Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Procurement, Suspension and Debarment Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The nonfederal entity?s documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200 Appendix II requires certain provisions be included in contracts if criteria are met. As outlined in 2 CFR 180, recipients must not utilize any vendor who is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The College?s procurement policy did not include all the required elements as outlined in the Uniform Guidance. Additionally, two vendors were not verified against the central contractor registry prior to expenses incurred to ensure that the vendor was not suspended or debarred. Cause: The College?s procurement policy does not include all the required elements as outlined in the Uniform Guidance. There was a lapse in oversight of the internal control process ensuring vendors are verified against the central contractor registry. Effect: Without a written procurement policy in accordance with the Uniform Guidance, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Failing to verify vendors against the central contractor registry may result in the College contracting for services with ineligible parties Questioned Costs: None reported. Context/Sampling: The College had two transactions totaling $120,822 equaling or exceeding $25,000 that were selected for suspension and debarment testing. Those two contracts selected for testing totaled $120,822. Repeat Finding from Prior Year: No Recommendation: We recommend that management implement procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement with the finding.

Reporting Material Noncompliance and Material Weakness in Internal Control over Compliance Department of Education 84.425E, 84.425F, 84.425K Higher Education Emergency Relief Fund Criteria: PL 116-136 Title VIII Coronavirus Aid, Relief, and Economic Security Act established the HEERF program and implemented reporting requirements that the Department of Education established under 2 CFR sections 200.328 and 200.329 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Additionally, the Uniform Guidance requires in 2 CFR 200.303 that the auditee establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The College misreported expenditures on the quarterly reports, as well as submitted reports outside of the ten-day required time frame following quarter end. Cause: The College does not have an internal control system designed to provide for a review of the quarterly reports, to ensure both accuracy and timely submission. Effect: The results in the College potentially failing to detect or prevent a material error in reporting. Questioned Costs: None reported. Context/Sampling: The entirety of the four quarterly reports were tested. Repeat Finding from Prior Year(s): No Recommendation: It is the responsibility management and those charged with governance to develop a system of internal control that will ensure that the expenditures incurred are accurately reported within required time frame. Views of Responsible Officials: There is no disagreement with the audit finding.