NEBRASKA INDIAN COMMUNITY COLLEGEHigher Education

2023 – 002: Suspension and Debarment Federal Agency: U.S. Department of Education Federal Program Name: COVID-19 Education Stabilization Fund: Higher Education Emergency Relief Funds Assistance Listing Number: 84.425K Federal Award Identification Number and Year: P425K200020-20B -Year Ended June 30, 2023 Award Period: 05/28/2020 – 06/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance; Other Matters Criteria or specific requirement: Section 200.303, Internal Controls, states that the College shall “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). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: The College had not established an effective internal control system related to the grant agreement and the Procurement, Suspension, and Debarment compliance requirement. The College’s current procurement policy includes a documented process to ensure vendors meet suspension and debarment requirements. However, there was a noted lack of documentation that the College had timely searched all applicable vendors on the System for Award Management (SAM) to ensure that the College’s vendors were not suspended or debarred. Questioned costs: None Context: Procurement policies were followed, but the documented process to ensure suspension and debarment compliance was not documented in a timely manner. Cause: The current policy and internal control structure includes a process for ensuring suspension and debarment requirements are met for all required vendors; however, the verification was not documented in a timely manner. Effect: The College may contract with or make subawards under covered transactions to parties that are suspended or debarred. Repeat Finding: Yes, 2022-003 Recommendation: We recommend that the College implement a system of internal controls over suspension and debarment that will ensure the processes are followed in a timely manner. Views of responsible officials: Management agrees with the finding.

2022 ? 002: Allowable Indirect Costs Federal Agency: U.S. Department of Interior Federal Program Name: Assistance to Tribally Controlled Community Colleges and Universities Assistance Listing Number: 15.027 Federal Award Identification Number and Year: A19AP00124 ? Year Ended June 30, 2022 Award Period: 7/1/2019 ? 6/30/2024 ____________________________________________________ Federal Agency: U.S. Department of Education Federal Program Name: COVID-19 Education Stabilization Fund: Higher Education Emergency Relief Funds Assistance Listing Number: 84.425K Federal Award Identification Number and Year: P425K200020-20B ? Year Ended June 30, 2022 Award Period: 05/28/2020 ? 06/30/2024 Type of Finding: ? Material Weakness in Internal Control over Compliance ? Material Noncompliance (Modified Opinion) Criteria or specific requirement: Section 200.303, Internal Controls, states that the College shall ?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). Indirect costs should be calculated based on modified total direct costs excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000, as stipulated by the College?s approved indirect cost rate agreement. Condition: The College applied their indirect cost rate to all direct costs of the Programs including tuition remission, scholarships, and payments to students. Questioned costs: The questioned costs have been calculated based on the recalculation of modified total direct costs multiplied by the College?s negotiated indirect cost rate. The known questioned costs for 15.027 totals $148,287. The known questioned costs for 84.425K totals $263,299. Context: As a part of the audit of allowable costs and activities, it was noted that the College was not appropriately calculating the indirect costs to be charged to the federal program in accordance with the stated criteria. Cause: The College did not appropriately calculate the modified total direct costs in accordance with the stated criteria. Effect: The College claimed indirect costs in excess of what would be allowed by the stated criteria. Repeat Finding: No Recommendation: We recommend that the College develop a process and internal controls that will mitigate the risk of incorrectly calculating the indirect costs to be charged to federal programs. Views of responsible officials: There is no disagreement with the audit finding.

2022 ? 003: Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Name: Rural Business Development Grant Assistance Listing Number: 10.351 Federal Award Identification Number and Year: Borrower ID: 32-087-295542779 - Year Ended June 30, 2022 Award Period: 7/1/2021 ? 6/30/2022 ____________________________________________________ Federal Agency: U.S. Department of Interior Federal Program Name: Assistance to Tribally Controlled Community Colleges and Universities Assistance Listing Number: 15.027 Federal Award Identification Number and Year: A19AP00124 ? Year Ended June 30, 2022 Award Period: 7/1/2019 ? 6/30/2024 ____________________________________________________ Federal Agency: U.S. Department of Education Federal Program Name: COVID-19 Education Stabilization Fund: Higher Education Emergency Relief Funds Assistance Listing Number: 84.425K Federal Award Identification Number and Year: P425K200020-20B -Year Ended June 30, 2022 Award Period: 05/28/2020 ? 06/30/2024 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Section 200.303, Internal Controls, states that the College shall ?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). Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. Condition: The College had not established a policy or an effective internal control system related to the grant agreements and the Procurement, Suspension, and Debarment compliance requirement. The College?s current procurement policy does not include a documented process to ensure vendors meet suspension and debarment requirements. In addition, there was no documentation that the Authority had searched all applicable vendors on the System for Award Management (SAM) to ensure that the College?s vendors were not suspended or debarred. Questioned costs: None Context: Procurement policies were followed, but no documented process to ensure suspension and debarment noted. Cause: The current policy and internal control structure does not include a process for ensuring suspension and debarment requirements are met for all required vendors. Effect: The College may contract with or make subawards under covered transactions to parties that are suspended or debarred. Repeat Finding: No Recommendation: The College should consider updating their current procurement policy to include suspension and debarment processes and implement appropriate internal controls to ensure the processes are followed. Views of responsible officials: The College agrees with the auditor?s comments and has taken corrective action to ensure suspension and debarment consideration is added to policies and procedures.

2022 ? 004: Program Income - Federal Agency: U.S. Department of Interior Federal Program Name: Assistance to Tribally Controlled Community Colleges and Universities Assistance Listing Number: 15.027 Federal Award Identification Number and Year: A19AP00124 ? Year Ended June 30, 2022 Award Period: 7/1/2019 ? 6/30/2024 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Section 200.303, Internal Controls, states that the College shall ?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). If interest in excess of $500 per year is earned on federal cash draws, the College is required to consider annual remittance to the granting agency in absence of other direction from the granting agency. Condition: The College has taken advance draws from the granting agency without incurring qualifying expenditures. These advance draws are reported as unearned revenues in the College?s financial statements in the amount originally drawn. Interest being earned on these funds have not been remitted to the granting agency. Questioned costs: None Context: As part of the audit of the College?s cash management process, it was noted that the College was not appropriately tracking and remitting program income being earned on advance draws in accordance with compliance requirements. Cause: The College did not appropriately track and remit program income earned on advance draws. Effect: The College earned interest income that was not appropriately tracked or remitted back to the granting agency. Repeat Finding: No Recommendation: We recommend that the College develop a process and internal controls to draw federal funds when qualifying expenditures have been incurred or scheduled to be incurred. We recommend that the College develop a process and internal controls to track program income earned when funds are drawn in advance of qualifying expenditures being incurred or scheduled to be incurred. Views of responsible officials: The College agrees with the auditor?s comments and has taken corrective action to ensure program income and cash management consideration is added to policies and procedures.

2022 ? 005: Reporting - Federal Agency: U.S. Department of Education Federal Program Name: COVID-19 Education Stabilization Fund: Higher Education Emergency Relief Funds Assistance Listing Number: 84.425E & F Federal Award Identification Number and Year: P425K200020-20B -Year Ended June 30, 2022 Award Period: 05/28/2020 ? 06/30/2024 ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: Section 200.303, Internal Controls, states that the College shall ?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). An institution is required to publicly post its Quarterly Reporting Form for the Student (84.425E) and Institutional (84.425F) funding within ten (10) days of the end of the quarter. Annual reporting for all fund expended January 1, 2021 through December 31, 2021 was due May 6, 2022 Condition: The College did not maintain supporting documentation to illustrate timely posting of its quarterly reports. The annual report was submitted on May 9, 2022. Questioned costs: None Context: During our audit of the reporting requirements, submission of quarterly and annual reports was completed in accordance with the required deadlines. Cause: The College did not submit its quarterly and annual reports prior to the reporting deadlines. Effect: The College published quarterly reports after ten (10) days after the end of the quarter. The annual report was completed after the May 6, 2022 deadline. Repeat Finding: No Recommendation: We recommend that the College develop a process and internal controls to ensure timely publication and submission of required reports and maintain supporting documentation to verify compliance. Views of responsible officials: The College agrees with the auditor?s comments and has taken corrective action to ensure reporting consideration is added to policies and procedures.

Finding 2020-001: Material audit adjustments and changes to the financial statement disclosures ? Material Weakness Criteria: The College is required to have effective internal controls that are designed and in place to provide for preparation of the financial statements and related footnotes in accordance with generally accepted accounting principles (GAAP) in the United States. Condition: As a result of audit procedures, material audit adjustments were identified and proposed by management and posted to the general leger. Changes to the financial statement footnote disclosures were also made. These changes would not have been identified as a result of the College?s existing internal controls, and could have resulted in a misstatement of the financial statements. Cause: The College?s internal controls over financial reporting did not identify entries necessary to properly report the correct amount of fixed asset additions and specific note disclosure requirements. Effect: Lack of compliance with designed controls over financial reporting could result in the likelihood that the College would not be able to draft financial statements that are materially correct. Recommendation: We recommend management continually be aware of the financial reporting of the College and the internal controls that impact financial reporting and work to have the necessary level of experience and staffing to accomplish this. View of Responsible Officials: Management and the board agree with the finding and will review their policies regarding the preparation of the financial statements to reduce their need for changes in the future. They are confident that with their current staff and third-party accountant they can accomplish this.

Finding 2020-002: Procurement policy and documentation on procurement ? Material Weakness Criteria: The College is required to have effective internal controls in place that are designed to ensure they are in compliance with the Uniform Guidance related to procurement. Condition: The College began the year with a procurement policy that meets the dollar thresholds of the Uniform Guidance, but did not include written standards related to conflicts of interest, avoiding acquisition of unnecessary or duplicative items, the methods of procurement and specific dollar amounts for those methods, and the required documentation to be kept to support procurement decisions. It was determined that while their internal policy was followed, documentation to support procurement decisions was not readily available. Cause: The College?s internal controls over procurement were not documented in a procurement policy that is consistent with the Uniform Guidance. Effect: Lack of policies and procedures consistent with Uniform Guidance procurement standards could result in the College being non-compliant on purchases made with federal funds. Recommendation: We recommend management draft a revised procurement policy to address all of the requirements of the Uniform Guidance. We recommend that documentation related to procurement decisions be kept for all purchases according to the dollar threshold requirements. View of Responsible Officials: Management and the board agree with the finding and drafted a revised procurement policy that addressed all of the areas required to be addressed in the Uniform Guidance. This policy was approved and implemented during the year.

Finding 2019-001: Changes to the financial statement disclosures and to the Schedule of Expenditures of Federal Awards ? Material Weakness Criteria: The College is required to have effective internal controls that are designed and in place to provide for preparation of the financial statements and related footnotes in accordance with generally accepted accounting principles (GAAP) in the United States, as well as accurate preparation of the schedule of expenditures of federal awards (SEFA). Condition: As a result of audit procedures, changes to the financial statement footnote disclosures were made. The audit also identified changes to the SEFA that were required to make it accurate. These changes would not have been identified as a result of the College?s existing internal controls, and could have resulted in a misstatement of the financial statements. Cause: The College?s internal controls over financial reporting did not identify specific note disclosure requirements and specific items required to be reported on the SEFA. Effect: Lack of compliance with designed controls over financial reporting could result in the likelihood that the College would not be able to draft financial statements that are materially correct. Recommendation: We recommend management continually be aware of the financial reporting of the College and the internal controls that impact financial reporting and work to have the necessary level of experience and staffing to accomplish this. View of Responsible Officials: Management and the board agree with the finding and will review their policies regarding the preparation of the financial statements to reduce their need for changes in the future. They are confident that with their current staff and third-party accountant they can accomplish this.

Finding 2019-002: Procurement policy and documentation on procurement ? Material Weakness Criteria: The College is required to have effective internal controls in place that are designed to ensure they are in compliance with the Uniform Guidance related to procurement. Condition: The College has a procurement policy that meets the dollar thresholds of the Uniform Guidance, but does not include written standards related to conflicts of interest, avoiding acquisition of unnecessary or duplicative items, the methods of procurement and specific dollar amounts for those methods, and the required documentation to be kept to support procurement decisions. It was determined that while their internal policy was followed, documentation to support procurement decisions was not readily available. Cause: The College?s internal controls over procurement were not documented in a procurement policy that is consistent with the Uniform Guidance. Effect: Lack of policies and procedures consistent with Uniform Guidance procurement standards could result in the College being non-compliant on purchases made with federal funds. Recommendation: We recommend management draft a revised procurement policy to address all of the requirements of the Uniform Guidance. We recommend that documentation related to procurement decisions be kept for all purchases according to the dollar threshold requirements. View of Responsible Officials: Management and the board agree with the finding and will draft a revised procurement policy that addresses all of the areas required to be addressed in the Uniform Guidance.

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