SOLEN PUBLIC SCHOOL DISTRICT NO. 3

Criteria Per the compliance supplement for the Title I program, “For an employee who works on multiple activities or cost objectives (e.g., in part on a Federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on Federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i)The Federal program or cost objective; and (ii)Each other program or cost objective supported by consolidated Federal funds or other revenue sources. Condition Solen Public School District No. 3 had substitute teachers filling in positions that were not Title-I funded positions but were paid with Title I funds. Questioned Costs $86,171 Cause The District is subject to size and budget constraints. Time and effort for the substitute teachers was recorded using an estimated percentage of their time towards the Title I grant. However, due to the nature of the substitute teacher position, it would be more appropriate to complete daily logs as the day-to-day duties of a substitute teacher and allowable time spent towards a Title I grant would depend on the position that they would be filling each day. Effect The District had unallowable payroll costs charged to the grant. Recommendation We recommend the District track the time and effort of substitute teachers using daily logs. Views of Responsible Officials and Planned Corrective Actions This finding was resolved in FY2025 through a joint agreement between the District and NDDPI. The questioned costs of $86,171, that were discovered during a separate NDDPI monitoring process, were all returned to the state before the beginning of the 2025 audit. This issue is resolved. Indication of Repeat Finding This is a new finding in the current year.

2023–008 Enrollment Reporting – Material Weakness AL #84.010 Impact Aid Criteria Districts are required to report student enrollment information on the Impact Aid application. The administration of the Impact Aid program depends heavily on the accuracy and timeliness of the enrollment information reported by the institution. Condition Solen Public School District No. 3 was unable to provide for the student account numbers submitted on the Impact Aid application. Cause The District did not properly execute its policies and procedures for review of payroll disbursements. Effect Grant awards potentially overcharged. Recommendation We recommend the District follow and properly execute its policies and procedures it has in place related to its payroll expenditures. Views of Responsible Officials and Planned Corrective Actions The district will implement measures to enhance the accuracy and verification of data reported on the Federal Impact Aid Application. The Superintendent and Business Manager will work together in the future to implement validation checks and verification processes to ensure there is accurate documentation to verify information on the application. Indication of Repeat Finding This is a repeat finding of 2022-008.

AL #84.010 TITLE I Criteria The District 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. Condition Of the 19 payroll transactions tested, we noted 15 instances where there was no time and effort certifications. Questioned Costs $9,849 Cause The District did not properly execute its policies and procedures for review of payroll disbursements. Effect Grant awards potentially overcharged. Recommendation We recommend the District follow and properly execute its policies and procedures it has in place related to its payroll expenditures. Views of Responsible Officials and Planned Corrective Actions The district will review and update existing policies and procedures related to allowable cost principles to address deficiencies identified in this finding. The administration will ensure that staff understand the principles of allowable costs and compliance requirements. Indication of Repeat Finding This is a repeat finding of 2022-009.

Uniform Guidance 2 CFR 200.512(a) states in part: “The audit must be completed, and the data collection form must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period.” Condition Solen Public School District No. 3 did not submit its Data Collection Form to the Federal Audit Clearinghouse within nine months of its year-end. Cause Audited financial statements were not complete; therefore, the Data Collection Form could not be filed timely. Effect Solen Public School District No. 3 is not in compliance with the filing requirement deadline. Recommendation We recommend Solen Public School District No. 3 comply with the Uniform Guidance 2 CFR 200.512(a) by submitting the Data Collection Form within the allowable time requirements. Views of Responsible Officials and Planned Corrective Actions The district will complete the fiscal year 2023 audit requirement on or before the March 31, 2024 deadline. Going forward the audits will be completed on time and this finding will be resolved. Indication of Repeat Finding This is a repeat finding of 2022-011.

2022–008 Enrollment Reporting – Material Weakness AL #84.041 Impact Aid Criteria Districts are required to report student enrollment information on the Impact Aid application. The administration of the Impact Aid program depends heavily on the accuracy and timeliness of the enrollment information reported by the institution. Condition Solen Public School District No. 3 was unable to provide for the student account numbers submitted on the Impact Aid application. Cause Proper support was not kept by the District. Effect Solen Public School District No. 3 is not in compliance with enrollment reporting requirements. Recommendation We recommend Solen Public School District No. 3 keep support that verifies student count number submitted on the Impact Aid application. Views of Responsible Officials and Planned Corrective Actions The district will implement measures to enhance the accuracy and verification of data reported on the Federal Impact Aid Application. The Superintendent and Business Manager will work together in the future to implement validation checks and verification processes to ensure there is accurate documentation to verify information on the application. Indication of Repeat Finding This is a new finding

2022–009 Enrollment Reporting – Material Weakness AL #84.041 Impact Aid Criteria Districts are required to report student enrollment information on the Impact Aid application. The administration of the Impact Aid program depends heavily on the accuracy and timeliness of the enrollment information reported by the institution. Condition Solen Public School District No. 3 was unable to provide for the student account numbers submitted on the Impact Aid application. Cause The District did not properly execute its policies and procedures for review of payroll disbursements. Effect Grant awards potentially overcharged. Recommendation We recommend the District follow and properly execute its policies and procedures it has in place related to its payroll expenditures. Views of Responsible Officials and Planned Corrective Actions Indication of Repeat Finding This is a new finding.

2022–010 Allowable Costs/Costs Principals – Material Weakness AL #84.425 ESSER Criteria The District 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. Condition Of the 22 payroll transactions tested, we noted four instances where contracts were incorrectly paid out and six instances where there was no support for approved payrates. Cause Proper support was not kept by the District. Effect Solen Public School District No. 3 is not in compliance with enrollment reporting requirements. Recommendation We recommend Solen Public School District No. 3 keep support that verifies student count number submitted on the Impact Aid application. Views of Responsible Officials and Planned Corrective Actions Indication of Repeat Finding This is a new finding.

2022–011 Untimely Filing of Data Collection Form – Material Weakness Criteria Uniform Guidance 2 CFR 200.512(a) states in part: “The audit must be completed, and the data collection form must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period.” Condition Solen Public School District No. 3 did not submit its Data Collection Form to the Federal Audit Clearinghouse within nine months of its year-end. Cause Audited financial statements were not complete; therefore, the Data Collection Form could not be filed timely. Effect Solen Public School District No. 3 is not in compliance with the filing requirement deadline. Recommendation We recommend Solen Public School District No. 3 comply with the Uniform Guidance 2 CFR 200.512(a) by submitting the Data Collection Form within the allowable time requirements. Views of Responsible Officials and Planned Corrective Actions Indication of Repeat Finding This is a repeat finding of 2021-019

2021-014 IMPACT AID GRANT ? INTERNAL CONTROLS AND WAGE RATE REQUIREMENTS - ALN 84.041 ? MATERIAL WEAKNESS AND MATERIAL NON-COMPLIANCE FINDING TYPE: Material Weakness ? Material Noncompliance Finding 2021-014 Federal Program: Impact Aid ALN: 84.041 Federal Award Number(s) and Year(s): S041B203650, 2021 Federal Agency: U.S. Department of Education Questioned Cost: $0 Condition Solen Public School District No. 3 did not comply with the Wage Rate Requirements applicable to the Impact Aid Grant funds for the construction of the new school. Further, Solen Public School District No. 3 did not implement procedures to ensure certified payrolls are consistently received from the construction manager at risk. Effect Solen Public School District No. 3 was not in compliance with the Wage Rate Requirements for Impact Aid. In addition, laborers may not have been paid the prevailing wage rates. Solen Public School District No. 3 may have also charged unallowable expenditures to the grant. Cause Solen Public School District No. 3 may not have been aware of the Wage Rate Requirements applicable to construction contracts in excess of $2,000 financed by federal assistance funds. Solen Public School District No. 3 may not have been aware of the requirement to document and develop internal controls related to the federal programs. 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 no less than those established for the locality of the project (prevailing wage rates) by the Department of Labor - 40 USC 3141-3144, 3146, and 3147. "Standards for Internal Control in the Federal Government" (Green Book) requires management to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. Management is to design appropriate types of control activities for the entity's internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system. Uniform Guidance 2 CFR 200.303(a) states ?The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Questioned Costs None. Prior Recommendation No. Recommendation We recommend Solen Public School District No. 3 implement procedures to ensure compliance with the Wage Rate Requirements of 40 USC 3141-3144, 3146, and 3147 and Uniform Guidance 2 CFR 200.303(a). Solen Public School District?s Response See Corrective Action Plan

2021 - 015 IMPACT AID GRANT ? BOARD APPROVAL OF EXPENDITURES - ALN 84.041 ? MATERIAL WEAKNESS FINDING TYPE: Material Weakness Finding 2021-015 Federal Program: Impact Aid ALN: 84.041 Federal Award Number(s) and Year(s): S041B203650, 2021 Federal Agency: U.S. Department of Education Questioned Cost: $0 Condition Solen Public School District No. 3?s Board did not have proper board approval for 4 construction invoices, totaling $1,095,590, out of 9 tested. Context The audit team randomly selected 9 invoices from a sample of 33 invoices with a population totaling $5,737,926. Of the 9 invoices selected randomly, 4 of the invoices with a population of $1,095,590, did not have proper board approval. When sampling was performed, nonstatistical sampling was performed. Effect Solen Public School District No. 3 may be subject to an increased risk of errors, fraudulent financial reporting, asset misappropriation, and corruption. Cause Solen Public School District No. 3 has not established policies and procedures to ensure all invoices are included in the listing for board approval. Criteria "Standards for Internal Control in the Federal Government" (Green Book) requires management to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. Management is to design appropriate types of control activities for the entity's internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system. Questioned Costs None. Prior Recommendation Yes. Recommendation We recommend Solen Public School District No. 3 establish policies and procedures to ensure all invoices are included in the listing for board approval. Solen Public School District?s Response See Corrective Action Plan

2021 - 016 TITLE I ? LACK OF SUPPORTING DOCUMENTAION - ALN 84.010 ? MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE FINDING TYPE: Material Weakness and Material Noncompliance Finding 2021-016 Federal Program: Title I ALN: 84.010 Federal Award Number(s) and Year(s): S010A200034, 2021 Federal Agency: U.S. Department of Education Pass Through Agency: North Dakota Department of Public Instruction Questioned Cost: $37,857 Condition Solen Public School District No. 3 did not obtain adequate supporting documentation for expenditures charged to the Title I grant program resulting in a total questioned cost of $37,857. Context The audit team randomly selected 60 invoices from a sample of 431 invoices with a population totaling $1,082,004. Of the 60 invoices selected randomly, 30 of the invoices with a population of $37,857 and projected questioned cost of $289,026, did not have proper supporting documentation. When sampling was performed, nonstatistical sampling was performed. Effect Solen Public School District No. 3 may have charged unallowable expenditures to the grant program. Cause Solen Public School District No. 3 may not have been aware of the documentation requirements for costs to be considered allowable under Federal awards. Criteria Uniform Guidance 2 CFR 200.403(g) requires costs to be adequately documented. Uniform Guidance 2 CFR 200.303(a) states ?The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? "Standards for Internal Control in the Federal Government" (Green Book) requires management to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. Management is to design appropriate types of control activities for the entity's internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system. Questioned Costs $37,857. Prior Recommendation No. Recommendation We recommend Solen Public School District No. 3 ensure all supporting documentation for expenditures is obtained for all costs charged to the Title I grant program. Solen Public School District?s Response See Corrective Action Plan

2021 ? 017 TITLE I ? INTERNAL CONTROLS AND REQUEST FOR REIMBURSEMENT ? ALN 84.010 ? MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE FINDING TYPE: Material Weakness ? Material Noncompliance Finding 2021-017 Federal Program: Title I ALN: 84.010 Federal Award Number(s) and Year(s): S010A200034, 2021 Federal Agency: U.S. Department of Education Pass Through Agency: North Dakota Department of Public Instruction Questioned Cost: $97,217 Condition Solen Public School District No. 3 did not have supporting documentation for the requests for reimbursements for Title I. Further, Solen Public School District No. 3 did not establish and maintain effective internal controls to ensure expenditures were being properly approved. Context The audit team randomly selected 2 requests for reimbursements out of 7 requests for reimbursement with a population of $89,248. Additionally, 7 requests for reimbursement were judgmentally selected out of 19 request for reimbursement with a total population of $672,441. Of the 9 requests for reimbursement that were selected judgmentally and selected randomly, 5 of the requests of reimbursement in the amount of $115,602 did not have proper approval. Additionally, 1 request for reimbursement in the amount of $17,668 out of the 9 selected for testing did not have proper support. Total questioned cost is $97,217, which is made up of the $17,668 error that is projecting questioned costs of $49,632 and also $79,549 of requests for reimbursement that were not subject to sampling that were found to not have support. When sampling was performed, nonstatistical sampling was performed. Effect Solen Public School District No. 3 was not in compliance with the reporting requirements relating to the requests for reimbursement documentation. In addition, expenditures may have been incorrectly charged to the Title I program. Cause Solen Public School District No. 3 may not have been aware of the reporting requirements to document and develop internal controls related to the federal programs. Criteria Uniform Guidance 2 CFR 200.403(g) requires costs to be adequately documented. "Standards for Internal Control in the Federal Government" (Green Book) requires management to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. Management is to design appropriate types of control activities for the entity's internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system. Uniform Guidance 2 CFR 200.303(a) states ?The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? Questioned Costs $97,217 Prior Recommendation No. Recommendation We recommend Solen Public School District No. 3 implement procedures to ensure compliance with the reporting requirements. We also recommend they establish and maintain internal controls over Federal awards in compliance with the Uniform Guidance 2 CFR 200.303(a). Solen Public School District?s Response See Corrective Action Plan

2021 ? 018 TITLE I ? BOARD APPROVAL OF EXPENDITURES - ALN 84.010 ? SIGNIFICANT DEFICIENCY FINDING TYPE: Significant Deficiency Finding 2021-018 Federal Program: Title I ALN: 84,010 Federal Award Number(s) and Year(s): S010A200034, 2021 Federal Agency: U.S. Department of Education Pass Through Agency: North Dakota Department of Public Instruction Questioned Cost: $0 Condition Solen Public School District No. 3?s Board did not have proper board approval for 11 invoices, totaling $12,823, out of 60 tested. Context The audit team randomly selected 60 invoices from a sample of 431 invoices with a population totaling $1,043,640. Of the 60 invoices selected randomly, 11 of the invoices with a population of $12,823, did not have proper board approval. When sampling was performed, nonstatistical sampling was performed. Effect Solen Public School District No. 3 may be subject to an increased risk of errors, fraudulent financial reporting, asset misappropriation, and corruption. Cause Solen Public School District No. 3 has not established policies and procedures to ensure all invoices are included in the listing for board approval. Criteria "Standards for Internal Control in the Federal Government" (Green Book) requires management to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. Management is to design appropriate types of control activities for the entity's internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system. Questioned Costs None. Prior Recommendation No. Recommendation We recommend Solen Public School District No. 3 establish policies and procedures to ensure all invoices are included in the listing for board approval. Solen Public School District?s Response See Corrective Action Plan

2021 ? 019 UNTIMELY FILING OF THE DATA COLLECTION FORM ? OTHER NONCOMPLIANCE FINDING TYPE: Other Noncompliance Finding 2021-019 Federal Program: Impact Aid. Title I ALN: 84.041, 84,010 Federal Award Number(s) and Year(s): S041B203650, S010A200034, 2021 Federal Agency: U.S. Department of Education Pass Through Agency: North Dakota Department of Public Instruction Questioned Cost: $0 Condition Solen Public School District No. 3 did not submit its Data Collection Form to the Federal Audit Clearinghouse within nine months of its year-end. Effect Solen Public School District No. 3 is not in compliance with the filing requirement deadline. Cause Audited financial statements were not complete; therefore, the Data Collection Form could not be filed timely. Criteria Uniform Guidance 2 CFR 200.512(a) states in part: ?The audit must be completed, and the data collection form must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period.? Questioned Costs None. Prior Recommendation No. Recommendation We recommend Solen Public School District No. 3 comply with the Uniform Guidance 2 CFR 200.512(a) by submitting the Data Collection Form within the allowable time requirements. Solen Public School District?s Response See Corrective Action Plan

2019-010 IMPACT AID BOARD APPROVAL OF EXPENDITURES ? CFDA 84.041 ? MATERIAL WEAKNESS Condition The Solen Public School District Board did not have proper board approval for 2 construction invoices, totaling $266,919, out of 14 tested. Effect Solen Public School District may be subject to an increased risk of errors, fraudulent financial reporting, asset misappropriation, and corruption. Cause Solen Public School District does not have an adequate process to ensure all invoices are included in the listing for board approval. Criteria "Standards for Internal Control in the Federal Government" (Green Book) requires management to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. Management is to design appropriate types of control activities for the entity's internal control system. Control activities help management fulfill responsibilities and address identified risk responses in the internal control system. Questioned Costs None. Prior Recommendation No. Recommendation We recommend Solen Public School District assess and implement a process to ensure proper board approval of all invoices. Solen Public School District?s Response See Corrective Action Plan

2019-011 LACK OF IMPACT AID DOCUMENTED POLICIES ? CFDA 84.041 ? MATERIAL WEAKNESS Condition The Solen Public School District does not have documented policies and procedures of its internal control system pertaining to the Impact Aid program. Effect The lack of documented policies and procedures may increase the risk of material noncompliance with grant requirements and increase the loss of institutional knowledge in the event of turnover at the school. Cause The Solen Public School District has not considered the importance of documented policies and procedures pertaining to the Impact Aid Program. Criteria "Standards for Internal Control in the Federal Government" (Green Book) states: ? 3.09 Management develops and maintains documentation of its internal control system. ? 3.10 Effective documentation assists management's design of internal control by establishing and communicating the who, what, when, where, and why of internal control execution to personnel. Documentation also provides a means to retain organizational knowledge and mitigate the risk of having that knowledge limited to a few personnel, as well as a means to communicate that knowledge as needed to external parties, such as external auditors. Questioned Costs None. Prior Recommendation No. Recommendation We recommend the Solen Public School District develop and document policies and procedures of its internal control system pertaining to the Impact Aid program. Solen Public School District?s Response See Corrective Action Plan

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