Yankton Sioux TribeTribal Government

Finding 2023 – 004: Reporting – Late Data Collection Form Submission (Repeat Finding: 2019-006, 2020-006, 2021-005 and 2022-005) Criteria: Uniform Guidance requires an entity expending more than $750,000 of federal funds within a fiscal year to have the data collection form and reporting package submitted within nine months after the end of the audit period. Condition: The Governmental Department’s audited financial statements were not submitted to the Federal Audit Clearinghouse by the due date of June 30, 2024. Cause: A lack of timely general ledger reconciliations contributed to the failure to timely file reports. Effect: The Governmental Department is not in compliance with the reporting requirements set forth in the Compliance Supplement which could lead to sanctions by the funding sources. Recommendation: We recommend that the Governmental Department implement procedures to ensure submission of the data collection form and reporting package to the federal audit clearinghouse within the nine-month due date. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2023 – 005: Procurement (Compliance; Internal Controls Over Compliance) (Repeat Finding: 2015-004, 2016-003, 2017-005, 2018-004, 2019-005, 2020-005, 2021-004 and 2022-006) Material Weakness ALN 20.205 Highway Planning & Construction Criteria: Uniform Guidance §200.318 through §200.327 outlines the federal procurement standards for non-federal entities (such as local governments) when using federal funds. These procurement standards should be followed for each federal program the Governmental Department expends funds on. Condition: During the testing of the Highway Planning and Construction Program (ALN 20.205), we reviewed two transactions selected to assess compliance with procurement standards. However, the Governmental Department was unable to provide procurement documentation for one of these transactions, including evidence of procurement planning, bid evaluations, or contract award decisions. Furthermore, no documentation was available to confirm that the Governmental Department had conducted searches for suspended or debarred vendors, as required under federal regulations. This lack of documentation prevented us from verifying compliance with federal procurement and vendor eligibility requirements for these transactions. Questioned Costs: $350,887 Cause: The purchasing department and program director are not following established policies and procedures for procurement and suspension and debarment as outlined in the Governmental Department’s procurement policy and Uniform Guidance §200.318 through §200.327. Effect: The Governmental Department’s procurement policy, as well as, Uniform Guidance §200.318 through §200.327 are not being followed. This could lead to sanctions by the funding agency. Recommendation: We recommend the Governmental Department become familiar with the procurement regulations and standards identified in Uniform Guidance §200.318 through §200.327 and follow established procurement policies and procedures to minimize any unauthorized or unallowable purchases as it relates to procurement. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2023 – 006: Reporting (Compliance; Internal Controls Over Compliance) (Repeat Finding: 2014-004, 2015-008, 2016-005, 2017-006, 2018-005, 2019-006, 2020-006, 2021-005 and 2022-007) Significant Deficiency ALN 21.027 Coronavirus State and Local Fiscal Recovery Funds (ARPA) Criteria: Per the Compliance Supplement for ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds, the Governmental Department was required to submit the Project and Expenditure Report as of September 30, 2023. Condition: During the testing of the reporting compliance requirement for ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds, we noted that the necessary reports were filed timely; however, no general ledger backup was provided to verify the accuracy of the reported numbers. Questioned Costs: None. Cause: The Governmental Department did not maintain sufficient appropriate documentation related to the reporting requirements for ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds. Effect: The Governmental Department is not in compliance with the reporting requirements set forth by the Uniform Guidance Compliance Supplement as it relates to ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds. Recommendation: We recommend that the Governmental Department establish procedures to ensure that all reports submitted to funding agencies are accurate, complete, and supported by reconciled documentation. These procedures should include reconciling financial information to the general ledger and verifying the accuracy of the Project and Expenditure Report as required for ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds. Additionally, we recommend that the Governmental Department review and incorporate program-specific reporting requirements into a formal policy to maintain compliance with federal guidelines. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2023 – 007: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA), (Repeat Finding: 2019-007, 2020-007, 2021-006 and 2022-008) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Governmental Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2023, the Governmental Department did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Governmental Department’s general ledger. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Governmental Department could not produce an accurate and timely SEFA, which required additional effort and resources by the Governmental Department and auditor during the audit process. Recommendation: We recommend that the Governmental Department becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2023 – 008: Activities Allowed and Unallowed, Allowable Costs, Period of Performance (Compliance; Internal Controls Over Compliance) (Repeat Finding: 2018-006, 2019-008, 2020-008, 2021-007 and 2022-009) Significant Deficiency ALN 93.441 Indian Self Determination ALN 20.205 Highway Planning & Construction ALN 93.575 Child Care and Development Block Grant Criteria: Uniform Guidance 2 CFR, Part §200.313(a) requires that non-federal entities 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 following 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). Condition: During compliance requirement testing for Activities Allowed and Unallowed, Allowable Costs and Period of Performance for the above noted major programs, we selected 120 transactions for testing from each major program. The following number of transactions were not provided for review during the audit: ALN 93.441 – Indian Self Determination – 18 transactions ALN 20.205 – Highway Planning and Construction – 16 transactions ALN 93.575 – Child Care and Development Block Grant – 7 transactions Questioned Costs: ALN 93.441 – Indian Self Determination – $9,236 ALN 20.205 – Highway Planning and Construction - $8,367 ALN 93.575 – Child Care and Development Block Grant – $22,832 Cause: The Governmental Department did not maintain sufficient appropriate documentation for audit review. Effect: The Governmental Department is not in compliance with Activities Allowed and Unallowed, Allowable Costs and Period of Performance compliance requirements for the three major programs mentioned above. This could lead to sanctions by the funding agencies. Recommendation: We recommend the Governmental Department becomes familiar with the requirements of 2 CFR, Part §200.313(a) and establish appropriate internal control policies and procedures to ensure compliance with the requirements of Uniform Guidance and each major program. In addition, all staff should be trained in those policies and procedures, so they are familiar with the requirements. We further recommend the Governmental Department does not process payment for disbursements that do not contain sufficient, appropriate supporting documentation and necessary approvals. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 005: Reporting – Late Data Collection Form Submission (Repeat Finding: 2019-006, 2020-006 and 2021-005) Criteria: Uniform Guidance requires an entity expending more than $750,000 of federal funds within a fiscal year to have the data collection form and reporting package submitted within nine months after the end of the audit period. Condition: The Governmental Department’s audited financial statements were not submitted to the Federal Audit Clearinghouse by the due date of June 30, 2023. Cause: A lack of timely general ledger reconciliations contributed to the failure to timely file reports. Effect: The Governmental Department is not in compliance with the reporting requirements set forth in the Compliance Supplement which could lead to sanctions by the funding sources. Recommendation: We recommend that the Governmental Department implement procedures to ensure submission of the data collection form and reporting package to the federal audit clearinghouse within the nine-month due date. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 006: Procurement (Compliance; Internal Controls Over Compliance) (Repeat Finding: 2008-007, 2015-004, 2016-003, 2017-005, 2018-004, 2019-005, 2020-005 and 2021-004) Material Weakness ALN 20.205 Highway Planning & Construction Criteria: Uniform Guidance §200.318 through §200.327 outlines the federal procurement standards for non-federal entities (such as local governments) when using federal funds. These procurement standards should be followed for each federal program the Governmental Department expends funds on. Condition: During our testing of the Highway Planning and Construction Program (ALN 20.205), we reviewed three transactions selected to assess compliance with procurement standards. However, the Governmental Department was unable to provide procurement documentation for any of these transactions, including evidence of procurement planning, bid evaluations, or contract award decisions. Furthermore, no documentation was available to confirm that the Governmental Department had conducted searches for suspended or debarred vendors, as required under federal regulations. This lack of documentation prevented us from verifying compliance with federal procurement and vendor eligibility requirements for these transactions. Questioned Costs: $1,307,872 Cause: The purchasing department and program director are not following established policies and procedures for procurement and suspension and debarment as outlined in the Governmental Department’s procurement policy and Uniform Guidance §200.318 through §200.327. Effect: The Governmental Department’s procurement policy, as well as, Uniform Guidance §200.318 through §200.327 are not being followed. This could lead to sanctions by the funding agency. Recommendation: We recommend the Governmental Department become familiar with the procurement regulations and standards identified in Uniform Guidance §200.318 through §200.327 and follow established procurement policies and procedures to minimize any unauthorized or unallowable purchases as it relates to procurement. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 007: Reporting (Compliance; Internal Controls Over Compliance) Material Weakness ALN 15.030 Indian Law Enforcement ALN 21.027 Coronavirus State and Local Fiscal Recovery Funds (ARPA) Criteria: Per the Compliance Supplement for ALN 15.030 – Indian Law Enforcement, Federal Financial Reports (SF-425, Federal Financial Report) should be reconciled to the general ledger and reported on a quarterly basis to the funding agency. Additionally, according to the Compliance Supplement for ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds, the Governmental Department was required to submit the Project and Expenditure Report and the Recovery Plan Performance Report as of September 30, 2022. Condition: During the testing of the reporting compliance requirement for ALN 15.030 – Indian Law Enforcement, 1 of the 2 quarterly Federal Financial Reports selected for testing did not reconcile with the general ledger and upon discussion with management, no reconciliation or evidence for the disagreement was provided. During the testing of the reporting compliance requirement for ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds, we requested the Project and Expenditure Report and the Recovery Plan Performance Report, neither of which were provided for our audit review. Questioned Costs: None. Cause: The Governmental Department did not maintain sufficient appropriate documentation supporting amounts being reported on the quarterly Federal Financial Reports as it relates to ALN 15.030 – Indian Law Enforcement. The Governmental Department did not understand the reporting requirements or did not maintain sufficient appropriate documentation related to the reporting requirements for ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds. Effect: The Governmental Department is not in compliance with the reporting requirements set forth by the Uniform Guidance Compliance Supplement as it relates to ALN 15.030 – Indian Law Enforcement and ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds. Recommendation: We recommend that the Governmental Department establish procedures to ensure that all reports submitted to funding agencies are accurate, complete, and supported by reconciled documentation. These procedures should include reconciling Federal Financial Reports (SF-425) to the general ledger on a quarterly basis, as required by ALN 15.030 – Indian Law Enforcement, and verifying the accuracy of the Project and Expenditure Report and the Recovery Plan Performance Report as required for ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds. Additionally, we recommend that the Governmental Department review and incorporate program-specific reporting requirements into a formal policy to maintain compliance with federal guidelines. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 008: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Repeat Finding: 2019-007, 2020-007 and 2021-006) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Governmental Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the Governmental Department did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance, and it was discovered that certain adjustments for grants receivable, unearned revenues and grant revenue had not been made in order to properly report total federal expenditures. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Governmental Department’s general ledger. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Governmental Department was not able to produce an accurate and timely SEFA, which required additional effort and resources by the Governmental Department and auditor during the audit process. Recommendation: We recommend that the Governmental Department becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2022 – 009: Activities Allowed and Unallowed, Allowable Costs, Period of Performance (Compliance; Internal Controls Over Compliance) (Repeat Finding: 2018-006, 2019-008, 2020-008 and 2021-007) Significant Deficiency ALN 93.441 Indian Self Determination ALN 20.205 Highway Planning & Construction ALN 15.030 Indian Law Enforcement ALN 93.575 Child Care and Development Block Grant ALN 21.027 Coronavirus State and Local Fiscal Recovery Funds (ARPA) Criteria: Uniform Guidance 2 CFR, Part §200.313(a) requires that non-federal entities 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). Condition: During compliance requirement testing for Activities Allowed and Unallowed, Allowable Costs and Period of Performance for the above noted major programs, we selected 120 transactions for testing from each major program. The following number of transactions were not provided for our review during the audit: ALN 93.441 – Indian Self Determination – 47 transactions ALN 20.205 – Highway Planning and Construction - 11 transactions ALN 15.030 – Indian Law Enforcement – 8 transactions ALN 93.575 – Child Care and Development Block Grant – 22 transactions ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds – 9 transactions Questioned Costs: ALN 93.441 – Indian Self Determination – $18,572 ALN 20.205 – Highway Planning and Construction - $9,133 ALN 15.030 – Indian Law Enforcement – $9,844 ALN 93.575 – Child Care and Development Block Grant – $6,713 ALN 21.027 – Coronavirus State and Local Fiscal Recovery Funds – $6,497 Cause: The Governmental Department did not maintain sufficient appropriate documentation for audit review. Effect: The Governmental Department is not in compliance with Activities Allowed and Unallowed, Allowable Costs and Period of Performance compliance requirements for the 5 major programs mentioned above. This could lead to sanctions by the funding agencies. Recommendation: We recommend the Governmental Department becomes familiar with the requirements of 2 CFR, Part §200.313(a) and establish appropriate internal control policies and procedures to ensure compliance with the requirements of Uniform Guidance and each major program. In addition, all staff should be trained on those policies and procedures so they are familiar with the requirements. We further recommend the Governmental Department does not process payment for disbursements that does not contain sufficient, appropriate supporting documentation and necessary approvals. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2019 ? 005: Procurement (Compliance; Internal Controls Over Compliance) (Repeat Findings: 2008-007, 2015-004, 2016-003, 2017-005 and 2018-004) Significant Deficiency CFDA 20.205 Highway Planning & Construction CFDA 93.441 Indian Self-Determination Criteria: Indian tribal governments and local governments that are not subrecipients of state governments will use their own procurement procedures provided they conform to applicable federal laws and regulations and standards identified in Title 2 CFR ?200 (d). Condition: Of the two transactions tested for procurement, no proof of search for suspended and debarred vendors was provided. Questioned Costs: None Cause: The purchasing department and program directors are not following established policies and procedures for procurement and suspension and debarment. The Governmental Departments? procurement policy has not been reviewed or revised for several years. Effect: The expenditures for purchases of goods and services may be disallowed. Recommendation: Established procurement policies and procedures should be followed to minimize any unauthorized or unallowable purchases. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2019 ? 006: Reporting (Compliance; Internal Controls Over Compliance) (Repeat Findings: 2014-004, 2015-008, 2016-005, 2017-006 and 2018-005) Material Weakness CFDA 20.205 Highway Planning & Construction CFDA 93.441 Indian Self-Determination CFDA 15.030 Indian Law Enforcement Criteria: Federal financial reports should be completed on a cumulative basis from the beginning through the conclusion and close out of the award and should be reconciled with the general ledger. Additionally, the audited financial statements should be submitted to the Federal Audit Clearinghouse within nine months after year end. Condition: While performing our testing, we were unable to obtain copies of filed federal financial reports to reconcile to the general ledger, or to confirm timely filing. The Governmental Departments did not complete and submit their audit to the Federal Audit Clearinghouse prior to June 30, 2020, which is nine months subsequent to their fiscal year end. Questioned Costs: None. Cause: A lack of timely general ledger reconciliation and absence of grant documentation contributed to the failure to timely file reports. Lack of training may have led to the inaccurate completion of the required quarterly financial reports and adherence to the filing deadlines. Effect: The Governmental Departments are not in compliance with the reporting requirements of the Compliance Supplement. Recommendation: We recommend that the Governmental Departments become familiar with reporting requirements for each award and implement procedures to ensure reports submitted are completed timely and accurately. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

2019 ? 007. Finding: Preparation of the Schedule of Expenditures and Federal Awards (SEFA) ? Material Weakness Criteria: Uniform Guidance (2 CFR 200) Section 200.510 requires an auditee to ?prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee?s financial statements [that]? at a minimum shall?list individual Federal programs by Federal agency? [and] provide total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available.? In accordance with Uniform Guidance, the Tribe is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2019, the Tribe did not have sufficient controls to ensure the SEFA accurately reflected each award?s federal expenses. There were differences noted in reconciling expenditures from the original SEFA to the trial balance, and it was discovered that certain adjustments for grants receivable, unearned revenues and grant revenue had not been made to properly reported total federal expenditures. These errors were reconciled and corrected as part of the audit process and the final version of the SEFA is supported by grant documents and the Tribe?s general ledger detail to ensure accurate reporting. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Tribe was not able to produce an accurate and timely SEFA, which required additional effort and resources by the Tribe and auditor during the audit process. Recommendation: We recommend that the Tribe develop and implement a review process to ensure compliance with SEFA reporting requirements as outlined in Uniform Guidance. These processes and controls should include reconciling SEFA federal expenses to the current year general ledger expenses and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.

Finding 2019 ? 008: Activities Allowed and Unallowed, Allowable Costs, Period of Availability (Compliance; Internal Controls Over Compliance) (Repeat Finding: 2018-006) Material Weakness CFDA 20.205 Highway Planning & Construction CFDA 93.441 Indian Self-Determination CFDA 15.030 Indian Law Enforcement Criteria: Proper internal controls related to compliance for Activities Allowed and Unallowed, Allowable Costs, and Period of Availability require established policies and procedures to be followed. For disbursement and payroll processing, that requires a documented approval process and applicable backup/receipts for all transactions. Condition: During our review of internal controls related to the major programs listed above we tested 40 disbursements for each major program, resulting in a combined review of 120 disbursements. Of the 120 items selected for testing, 61 transactions had no backup provided. During our testing of wage rate requirements for Highway Planning & Construction no documentation was provided. Of the 19 payroll files tested, the pay rate on the check did not match the pay rate on the employee action form. The sampling was a statistically valid sample. Questioned Costs: Unknown Cause: There were not sufficient controls implemented to appropriately review and monitor activity and ensure amounts were properly recorded in the general ledger. Effect: Disbursement transactions are being processed without proper documentation, and employees could be paid more than an authorized amount, resulting in a misappropriation of funds. Recommendation: We recommend that the Governmental Departments utilize an approval form to accurately document expenses and that the general ledger coding agree with the coding used in the accounting software. Additionally, we recommend that Governmental Departments employees indicate their review and approval for all transactions to ensure they are properly authorized and allocable to the federal program, including payroll. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.