MANDAREE PUBLIC SCHOOL DISTRICT NO. 36

2025-003: Activities Allowed or Unallowed / Allowable Costs / Cost Principles (15.042) Criteria A system of internal controls requires approval of employee wages. Condition: The District was unable to provide documentation supporting approval of hourly pay rates. Cause: The District did not have proper controls in place to ensure approval of employee wages. Effects: There is an increased possibility of unallowed payroll expenditures being charged to the program. Questioned Costs: None Context: Out of 29 payroll transactions tested, we were unable to verify approval of an employee’s hourly pay rate for one transaction. Repeat Finding: No Recommendation: The District should implement policies and procedures to ensure all employee wages are approved and the proper documentation is maintained. Management Response: Management agrees with this audit finding as one of the salary authorization forms sampled did not include documentation in support of one employee’s approved hourly rate.

2025-004: Special Tests and Provisions (84.010) Criteria: Under Title I, Section 1111(b)(2)(B)(iii) of the ESEA (20 USC 6311(b)(2)(B)(iii)), SEAs, in consultation with LEAs, are required to establish and maintain an assessment system that is valid, reliable, and consistent with relevant professional and technical standards. Within their assessment system, SEAs must have policies and procedures to maintain test security and ensure that LEAs implement those policies and procedures. Condition: The District has not developed and operationalized policies and procedures regarding test security for the assessments. Cause: Management oversight Effects: The District is not in compliance with Uniform Guidance requirements. Questioned Costs: None Context: During inquiry we noted the District has not developed or implemented policies and procedures for test security measures. Repeat Finding: No Recommendation: We recommend the District develop and implement policies and procedures for test security measures. Management Response: Management agrees with this audit finding that it has not developed or implemented policies and procedures for test security measures

Activities Allowed or Unallowed / Allowable Costs / Cost Principles (84.425) Criteria A system of internal controls requires approval of employee wages. Condition: The District was not able to provide approved salary authorization forms for two employees. Cause: The District did not have proper controls in place to ensure approval of employee wages. Effects: There is an increased possibility of unallowed payroll expenditures being charged to the program. Questioned Costs: None Context: The District was unable to provide two out of twelve salary authorization forms requested for testing. Repeat Finding: Yes Recommendation: The District should implement policies and procedures to ensure all employee wages are approved and the proper documentation is maintained. Management Response: The District currently does have processes and controls in place to ensure grant expenditures have been approved. Specific to this audit finding of missing salary authorization forms, the Business Manager will meet with the Human Resource Manager to review the current control and approval processes for employee salaries and make changes as appropriate.

Activities Allowed or Unallowed / Allowable Costs / Cost Principles (15.042) Criteria A system of internal controls requires approval of employee wages Condition: During our review of transactions, we noted one employee that did not have a signed salary authorization form. Cause: The District did not have proper controls in place to ensure approval of employee wages. Effects: There is an increased possibility of unallowed payroll expenditures being charged to the program. Questioned Costs: None Context: Of seven employees tested for proper wage approval, one employee was missing a signed salary authorization form. Repeat Finding: Yes Recommendation: The District should implement policies and procedures to ensure all employee wages are approved and the proper documentation is maintained. Management’s Response: The District currently does have processes and controls in place to ensure grant expenditures have been approved. Specific to this audit finding of missing salary authorization forms, the Business Manager will meet with the Human Resource Manager to review the current control and approval processes for employee salaries and make changes as appropriate.

Reporting (15.042) Criteria: Under grant reporting requirements, the District is required to submit quarterly SF-425 reports. Condition: The District was not able to provide supporting documentation for quarterly SF-425 reports. Cause: The District did not have proper controls in place to ensure compliance with grant reporting requirements. Effects: Quarterly reports may not have been submitted as required under the grant. Questioned Costs: None Context: We were not able to verify supporting documentation for quarterly SF-425 reports. Repeat Finding: Yes Recommendation: We recommend the District implement controls to ensure adequate supporting documentation is maintained for amounts reported on federal SF-425 reports. Management’s Response: The Business Manager currently maintains a file which includes documentation in support of all amounts submitted on federal quarterly SF-425 reports.

Equipment (15.042) Criteria: CFR Section 200.313 under the Uniform Guidance requires a physical inventory of property acquired with federal dollars to be conducted at least once every two years. Condition: The District does not have physical inventory procedures in place for equipment purchased with federal dollars. Cause: Management oversight Effects: There is an increased risk that funds received for disposal of equipment purchased with federal dollars would not be retained by the program. Questioned Costs: None Context: The District was unable to provide support for a physical inventory of equipment purchased with federal dollars conducted in the last two years. Repeat Finding: Yes Recommendation: We recommend the District implement policies and procedures for conducting a physical inventory of equipment purchased with federal dollars at least once every two years. Management’s Response: The District will perform a physical inventory of all equipment purchased with federal dollars.

2023-003: Activities Allowed or Unallowed / Allowable Costs / Cost Principles (84.425) Criteria A system of internal controls requires approval of employee wages, and employee timecards. Condition: During our review of transactions, we noted four employee contracts and one employee timecard that did not have the proper approvals. Cause: Management oversight Effects: There is an increased possibility of unallowed expenditures being charged to the program. Questioned Costs: None Context: Of ten employee contracts tested, four were missing school board signatures. Additionally, the District was unable to locate one of the five timecards selected for testing. Repeat Finding: No Recommendation: The District should implement policies and procedures to ensure all grant expenditures are approved. Management Response: The District currently does have processes and controls in place to ensure grant expenditures have been approved. Specific to this audit finding of employee contracts and employee timecards missing proper approvals, the Business Manager will meet with the Human Resource Manager to review the current control and approval processes for employee contracts and timecards and make changes as appropriate.

2023-004: Activities Allowed or Unallowed / Allowable Costs / Cost Principles (15.042) Criteria A system of internal controls requires approval of employee wages Condition: During our review of transactions, we noted one employee contract and six salary authorization forms that did not have the proper approvals. Cause: Management oversight Effects: There is an increased possibility of unallowed expenditures being charged to the program. Questioned Costs: None Context: Of twelve employee contracts tested, one was missing approval. Additionally, of eight salary authorization forms tested, six were missing approval by someone outside of the payroll department. Repeat Finding: No Recommendation: The District should implement policies and procedures to ensure all grant expenditures are approved. Management’s Response: The District currently does have processes and controls in place to ensure grant expenditures have been approved. Specific to this audit finding of an employee contract and salary authorization forms not having proper approvals, the Business Manager will meet with the Human Resource Manager to review the current control and approval processes for employee contracts and salary authorization forms and make changes as appropriate.

2023-005: Reporting (15.042) Criteria: A system of internal controls requires supporting documentation to be maintained for all amounts submitted on grant reporting forms. Condition: The District was not able to provide supporting documentation for all amounts submitted with federal quarterly SF-425 reports. Cause: The District did not have proper controls in place to ensure supporting documentation was maintained. Effects: Required reports could be inaccurately submitted. Questioned Costs: None Context: We were not able to verify cash receipts reported on the two quarterly SF-425 forms selected for testing. Repeat Finding: No Recommendation: We recommend the District implement controls to ensure adequate supporting documentation is maintained for amounts reported on federal SF-425 reports. Management’s Response: The Business Manager currently maintains a file which includes documentation in support of all amounts submitted on federal quarterly SF-425 reports.

2023-006: Equipment (15.042) Criteria: CFR Section 200.313 under the Uniform Guidance requires a physical inventory of property acquired with federal dollars to be conducted at least once every two years. Condition: The District does not have physical inventory procedures in place for equipment purchased with federal dollars. Cause: Management oversight Effects: There is an increased risk that funds received for disposal of equipment purchased with federal dollars would not be retained by the program. Questioned Costs: None Context: The District was unable to provide support for a physical inventory of equipment purchased with federal dollars conducted in the last two years. Repeat Finding: No Recommendation: We recommend the District implement policies and procedures for conducting a physical inventory of equipment purchased with federal dollars at least once every two years. Management’s Response: The District will perform a physical inventory of all equipment purchased with federal dollars.

2023-007: Reporting (All major programs) Criteria: As a matter of compliance, the data collection form and reporting package must be submitted to the Federal Audit Clearinghouse within 30 days after the receipt of the auditor’s report or within nine months after the end of the audit period. Condition: The June 30, 2023 data collection form was not submitted timely. Cause: There was a delay in the audit being completed. Effects: The District is not in compliance with Uniform Guidance requirements. Questioned Costs: None Context: The June 30, 2023 data collection form was not submitted timely. Repeat Finding: No Recommendation: We recommend the District take the necessary procedures to ensure that future single audits are completed within the required time periods of the Uniform Guidance. Management Response: The District hired a new Business Manager in October 2024 with the expectation that the District will return to compliance with the Uniform Guidance requirements.

Finding: The original schedule of expenditures of federal awards (SEFA) incorrectly reported $183,323 of expenditures as assistance listing number 84.425D, Education Stabilization Fund. Criteria: Under Uniform Guidance, an auditee shall prepare a complete and accurate schedule of expenditures of federal awards for the period covered by the auditee?s financial statements. Condition: The expenditures related to the COVID-19 funding provided by the Bureau of Indian Affairs (BIA) under the current year grant agreement were reported as assistance listing number 84.425D but should have been reported as assistance listing number 15.042, Indian School Equalization Program, on the SEFA. The SEFA was subsequently adjusted to report the expenditures under the proper assistance listing number. Context: $183,323 of expenditures under the Indian School Equalization Program. Questioned Costs: None. Cause: The grant agreement received from the BIA did not clearly identify the assistance listing number for the COVID funding and the District did not obtain clarification on the assistance listing number prior to the audit. Effect: Improper reporting of federal expenditures can result in actions taken by oversight agencies which could impact future funding. Recommendation: We recommend the District implement procedures to properly ensure all expenditures reported on the SEFA have their assistance listing numbers reviewed and checked against applicable guidance and communications from the granting agency. Views of responsible officials: Management has reviewed the finding and agrees.

Finding: The District did not maintain documentation of small purchase procurement procedures for four purchases above the micro-purchase threshold. Criteria: In accordance with 2 CFR section 200.320(a)(2), an auditee must obtain price or rate quotations from an adequate number of qualified sources for any purchases exceeding the micro-purchase threshold. Condition: For COVID-19-related aid received under the Indian School Equalization Program, four purchases exceeded the micro-purchase threshold and documentation over price or rate quotations obtained was not maintained. Context: $148,168 of COVID-19-related expenditures under the Indian School Equalization Program. Questioned Costs: None. Cause: A lack of maintaining documentation. Effect: Improper procurement procedures over federal expenditures can result in actions taken by oversight agencies which could impact future funding. Recommendation: We recommend the District implement procedures to properly ensure all expenditures of federal funds have the appropriate procurement procedures performed over them and that all documentation over procurement procedures performed is maintained. Views of responsible officials: Management has reviewed the finding and agrees.

Finding: The District did not maintain documentation of small purchase procurement procedures for four purchases above the micro-purchase threshold. Criteria: In accordance with 2 CFR section 200.320(a)(2), an auditee must obtain price or rate quotations from an adequate number of qualified sources for any purchases exceeding the micro-purchase threshold. Condition: For COVID-19-related aid received under the Indian School Equalization Program, four purchases exceeded the micro-purchase threshold and documentation over price or rate quotations obtained was not maintained. Context: $148,168 of COVID-19-related expenditures under the Indian School Equalization Program. Questioned Costs: None. Cause: A lack of maintaining documentation. Effect: Improper procurement procedures over federal expenditures can result in actions taken by oversight agencies which could impact future funding. Recommendation: We recommend the District implement procedures to properly ensure all expenditures of federal funds have the appropriate procurement procedures performed over them and that all documentation over procurement procedures performed is maintained. Views of responsible officials: Management has reviewed the finding and agrees.

Finding: The District did not maintain the proper documentation of background checks for individuals who required background checks. Criteria: In accordance with 25 CFR section 63.17 and 63.18 character investigations must be conducted in the last 5 years and documentation maintained to ensure individuals are fit to work with the students. Condition: For the Indian School Equalization Program, three individuals did not have proper documentation of the adjudicating officials conducting the investigations, two individuals did not have a security investigation, two individuals did not have local law enforcement record searches, two individuals did not have fingerprint charts. For Title I, Part A, two individuals did not have proper documentation of the adjudicating officials conducting the investigations, three individuals did not have a security investigation. Context: Seven of the 15 employees tested had at least one required item missing. Effect: Potential loss of funding. Cause: A lack of maintaining documentation. Recommendation: The District should implement review procedures to ensure that background checks are being properly document. The District should also implement procedures to ensure all character investigation information is copied and maintained in secure locations. Management?s response: Management agrees with the finding.

Finding: The District did not maintain the proper documentation of background checks for individuals who required background checks. Criteria: In accordance with 25 CFR section 63.17 and 63.18 character investigations must be conducted in the last 5 years and documentation maintained to ensure individuals are fit to work with the students. Condition: For the Indian School Equalization Program, three individuals did not have proper documentation of the adjudicating officials conducting the investigations, two individuals did not have a security investigation, two individuals did not have local law enforcement record searches, two individuals did not have fingerprint charts. For Title I, Part A, two individuals did not have proper documentation of the adjudicating officials conducting the investigations, three individuals did not have a security investigation. Context: Seven of the 15 employees tested had at least one required item missing. Effect: Potential loss of funding. Cause: A lack of maintaining documentation. Recommendation: The District should implement review procedures to ensure that background checks are being properly document. The District should also implement procedures to ensure all character investigation information is copied and maintained in secure locations. Management?s response: Management agrees with the finding.

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