AMERICAN INDIAN SCIENCE AND ENGINEERING SOCIETYNon-Profit

Federal Agencies: U.S. Department of Education Federal Programs: “Southeast Alaska Full Service Community Schools”: Association of Alaska School Boards ALN: 84.215J Award Numbers: S215J220051 Award Years: 2023 Type of Finding: Significant deficiency in internal control over compliance and noncompliance.   CHATHAM SCHOOL DISTRICT Federal Schedule of Findings and Questioned Costs, Continued Criteria: Internal control procedures should be in place to ensure that proper controls are in place to prevent financial misstatements due to either fraud or error. Condition and Context: During our tests of transactions for internal controls over compliance and compliance we identified one transaction with no purchase order or approval. There was also no authorization for this transaction to be coded to the grant. Cause: Lack of internal control over credit card transactions. Effect: Lack of internal controls over credit cards could result in expenditures being miscoded to the program or allow improper or unauthorized transactions to not be prevented, detected, or corrected in a timely manner. Questioned Costs: Questioned costs are under the reporting threshold of $25,000. Repeat Finding: Yes. Recommendation: We recommend the District adhere to their internal control policies to ensure accurate controls over credit card transactions. Managements Response: Management agrees with this finding. See Corrective Action Plan.

Finding 2024-003 Lack of Internal Control over Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Agencies: U.S. Department of Education Federal Programs: “Stay North”: Angoon Community Association’s NACTEP ALN: 84.101 Award Numbers: V101A210009 Award Years: 2021. Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Internal control procedures should be in place to ensure that payroll accounting system is maintained to be able to accurately record payroll transactions. Payroll transactions should be supported by approved timesheets, pay rates, coding, and deductions should be documented in the personnel files. Condition and Context: During our tests of transactions for internal controls over compliance and compliance we identified one transaction that was coded to the incorrect federal grant. Originally, it was coded to the incorrect object code per the DEED uniform chart of accounts. When the transaction was corrected, the fund number was changed to what the object code should have been resulting in the cost being charged to the incorrect program. Cause: Lack of internal control over payroll transactions. Effect: The effect is that one single transaction was coded to the incorrect program. Possible other effects from lack of internal controls could result in additional costs being incorrectly coded and not prevented, detected, or corrected in a timely manner. Questioned Costs: Questioned costs are under the reporting threshold of $25,000. Repeat Finding: No and we believe this to be an isolated incident. Recommendation: We recommend the District adhere to their internal control policies to ensure accurate reporting of payroll transactions. Managements Response: Management agrees with this finding. See Corrective Action Plan.

CURRENT YEAR FINDINGS 2023—001—Federal Financial Reporting Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services Title: Native American Programs AL #: 93.612 Award #: 90NA8371-03-01 Award Period: 9/30/2019-9/29/2023 Estimated Questioned Costs: None Statement of Condition AISES did not submit 1 of 3 tested required federal financial reports (SF-425) by the due date in accordance with the grant award agreement. Criteria As stated in the grant award agreement, SF-425 reports are due within 90 days of the project end. Effect AISES is not in compliance with grant and federal award requirements. Cause AISES experienced multiple changes in personnel at the CFO/Controller level in 2022 and 2023. The new Controller responsible for submitting the report had to reconcile multiple grants for multiple years, including the grant in question. While an extension was granted for the program report, there was not an extension for the financial report. When the report was ready to submit and certify the Controller did not have the required access to the report submission website. Due to multiple delays in obtaining access, the report wasn’t submitted for months after it was due. Recommendation We recommend AISES implement procedures to ensure compliance with grant and federal award requirements. View of Responsible Officials and Corrective Action Plan AISES does not disagree with the audit finding. AISES has noted that the turnover in the CFO and Controller functions has resulted in delays in grant reconciliations and certain reporting. AISES has put several actions in place to ensure compliance with grant reporting requirements: 1. AISES hired a fractional Vice President of Finance to bridge the communication between Finance and Programs and create additional systems and processes for grant and financial reporting. 2. AISES has established a backup resource to submit reports in the event there are access issues with the submission website. 3. An additional resource was added to the Grants Compliance team to help manage grant requirements. 4. Grant reporting deadlines are placed on the appropriate employee’s calendars and grant orientation meetings have been implemented to educate relevant personnel on their responsibilities. 5. Grant meetings are held weekly with program staff, who review the grant requirements. Finance staff attend a meeting with the Programs team monthly to review upcoming grant and grant reporting requirements and deadlines. 6. Checklists are being utilized to track a grant through its lifecycle including: a. when a grant is awarded, assigning appropriate tasks and responsibilities to appropriate personnel; b. when a grant ends, to make sure all tasks, outcomes and reports have been filed timely and completely with copies of reports filed in the grant folder. 7. An AAR (after action review) is being incorporated into the grant close out process as a final check that all reports have been completed and filed. Corrective Action Plan Timeline AISES has already implemented all seven actions. Designation of Employee Position Responsible for Meeting Deadline Donna Walker, Vice President of Finance Jeannine White, Controller Roseann McDermott, Senior Director of Grant Compliance

2020?001 ? Control Deficiency ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal agency: National Science Foundation Federal program title: Research and Development (R&D) Cluster CFDA Number: 47.070 Award Period: June 15, 2019 ? July 31, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance; Compliance Criteria or specific requirement: According to ?200.430 Compensation-personal services of 2 CFR Part 200, budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: Payroll charges to federal awards did not agree to approved documentation of time and effort. Questioned costs: $82.72 Context: During our payroll disbursement testing, 1 of 9 payroll periods tested did not agree to approved documentation of time and effort for selected employees. Payroll allocations for the period in question were sent to third-party payroll provider for processing, but were not updated by the provider, and were not verified by AISES staff after the payroll run. Cause: AISES has a formal process for reconciling payroll allocations provided to the third-party payroll provider and general ledger on a regular basis, but the employee responsible for this payroll period failed to perform the reconciliation. Effect: Payroll allocations did not agree to underlying time and effort. Repeat Finding: No Recommendation: CLA recommends management implement a formal review and approval process over this reconciliation prior to drawdown. Views of responsible officials: AISES has a process after each payroll to reconcile allocation percentages against timesheets for the respective payroll period and verified this was the only payroll period where allocations were incorrect. The individual responsible for reconciling the payroll period in question is no longer with the organization. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Actions planned in response to finding: In addition to the existing process for reconciling payroll allocations, each payroll packet will be accompanied by a cover sheet with AISES staff member name and signature confirming the allocations provided to third-party payroll provider match the respective timesheets for review and approval prior to drawdown. Responsible party: Chief Executive Officer and Chief Financial Officer Planned completion date for corrective action plan: August 31, 2021 Plan to monitor completion of corrective action plan: AISES? Finance Committee will monitor the completion of the corrective action plan.

2019?001 ? Control Deficiency ? Cash Management and Allowable Costs/Cost Principles Federal agency: National Science Foundation Federal program title: Research and Development (R&D) Cluster CFDA Number: 47.041, 47.074, 47.076 Award Period: August 15, 2014 ? September 30, 2020 Type of Finding: Significant Deficiency in Internal Control over Compliance; Compliance Criteria or specific requirement: According to ?200.302 Financial management of 2 CFR Part 200, the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of ?200.305 Payment. Also, according to ?200.303 Internal controls of 2 CFR Part 200, the non-Federal 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. According to the AISES Manual of Accounting Policies and Procedures Adopted 2001 Revised 2018, the AISES CEO, or a designee authorized by the agency, will approve the drawdown request prior to submission to the agency. Condition: No formal documentation of review and approval of the drawdown request prior to submission to the agency. Questioned costs: None Context: We noted corrective action, as outlined in management?s response to prior year audit findings, was taken and completed as of the planned date of August 31, 2019. Inherently, during cash management and indirect cost testing, we noted 4 out of 11 drawdown requests did not have a formally documented review and approval prior to submission to the agency. CLA noted these exceptions were isolated to the months prior to the planned date for corrective action and that there were no exceptions identified in drawdown requests after the planned date for corrective action. Cause: Lack of formal documentation of review and approval prior to completion date for corrective action plan. Effect: Noncompliance with Federal requirement; If review and approval is not formally documented, there is no evidence that it occurred prior to submission to the agency, consistent with internal policies and procedures. Section III ? Findings and Questioned Costs ? Major Federal Programs (Continued) Repeat Finding: Repeat, Modification, and Resolution of prior year finding 2018-002. Recommendation: We recommend management continue to follow its written procedures for payment and formally document review and approval of drawdown requests prior to submission to agency. Views of responsible officials: Management has completed the corrective action associated with this finding. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Actions planned in response to finding: Management has completed the corrective action associated with this finding. Responsible party: N/A Planned completion date for corrective action plan: N/A Plan to monitor completion of corrective action plan: N/A

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