EIN: 742821179
UEI: ZHQSU4HSNMH8
Data as of August 25, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on February 5, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by August 5, 2025 (385 days ago).
What is a management decision? →2023-001
2023-002
2023-003
FAC accepted this audit on January 30, 2024 — management decision was due July 30, 2024.
A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advanced payments as “deferred revenue”), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or Securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States. According to the Indian Child Protection and Family Violence Protection Act (25 USC 3201 etc. Sec.), the School must conduct a character investigation of each individual who is employed or is being considered for employment in a position that involves regular contact with, or control over Indian children. The investigation should be reinvestigated every five years. The Act further states that the Schools may employ individuals in those positions only if the individuals meet standards of character, no less stringent thatn those prescribed under subpart B – Minimum Standards of Character and Suitability for Employment (25 CFR part 63).
Show full finding ▾Hide full finding ▴A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advanced payments as “deferred revenue”), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or Securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States. According to the Indian Child Protection and Family Violence Protection Act (25 USC 3201 etc. Sec.), the School must conduct a character investigation of each individual who is employed or is being considered for employment in a position that involves regular contact with, or control over Indian children. The investigation should be reinvestigated every five years. The Act further states that the Schools may employ individuals in those positions only if the individuals meet standards of character, no less stringent thatn those prescribed under subpart B – Minimum Standards of Character and Suitability for Employment (25 CFR part 63).
Contact Person: Richard Edwards, Director and Veryl Begay, Business Manager Anticipated Completion Date: October 31, 2023 Planned Corrective Action: On December 19, 2017, KRCI set up an account with Atlantic Coast Life to “invest funds”. The initial investment was $388,532 and the amount was presented to the Account Representative in the form of a cashiers check. On August 8, 2018, KRCI opened a second account with Atlantic Coast Life in the amount of $74,799. The annuitant and only signatory on record is a Board member. The past three audits have indicated that these accounts are a finding because they are not insured by the FDIC or any other acceptable entity. The Director has reached out to Atlantic Coast Corporate Office to close out or surrender these accounts. The larger account has been closed out, but the smaller amount remained with Atlantic Coast as of the end of fiscal year 2023.
2022-001
The Board adopted policies that require the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider, or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR §180.220.
Show full finding ▾Hide full finding ▴The Board adopted policies that require the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider, or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR §180.220.
inding Number: FS-2023-002 Contact Person: Richard Edwards, Director and Veryl Begay, Business Manager Anticipated Completion Date: March 31, 2024 As the current administration acquires access to files and records, the investigation will be considered ongoing. No single vendor or contractor will be awarded numerous and frequent contracts without process, oversight, and investigation. We are also investigating how approval and authority was administered in this situation.
2022-002
Campus management is responsible for establishing and maintaining internal controls over disbursements that are adequate to ensure that all financial activities are properly processed and reported. Additionally, the Campus is required, except where otherwise authorized by statute, to ensure costs meet the general criteria outlined in 2 CFR 200.403 in order to be allowable under federal awards, including the costs be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. The Single Audit Reporting Package must have a report date nine months after fiscal year-end.
Show full finding ▾Hide full finding ▴Campus management is responsible for establishing and maintaining internal controls over disbursements that are adequate to ensure that all financial activities are properly processed and reported. Additionally, the Campus is required, except where otherwise authorized by statute, to ensure costs meet the general criteria outlined in 2 CFR 200.403 in order to be allowable under federal awards, including the costs be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. The Single Audit Reporting Package must have a report date nine months after fiscal year-end.
Finding Number: FS-2023-003 Contact Person: Richard Edwards, Director and Veryl Begay, Business Manager Anticipated Completion Date: March 31, 2024 Planned Corrective Action: When the Business manager left without turning over access or authority, KRCI struggled to perform even the smallest of tasks. In Addition to the obstruction and difficulty finding records, the former Business Manager with the approval of a Board Member, removed numerous records from the campus when clearing their office. A police report was made regarding the potential theft and a folder containing credit card information was returned by the former employee, but KRCI is not confident that all records belonging to the Campus were returned. No central system was established for archiving and security of procurement records. There were no backup systems or redundancy, and separation of duties did not exist due to the extremely limited staff.
2022-003
The Campus is required to report cumulative program outlays and program income on the Federal Financial Report, SF-425. Quarterly and semi-annual reports are required to be submitted no later than 30 days after the end of each reporting period.
Show full finding ▾Hide full finding ▴The Campus is required to report cumulative program outlays and program income on the Federal Financial Report, SF-425. Quarterly and semi-annual reports are required to be submitted no later than 30 days after the end of each reporting period.
Finding Number: 2023-004 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 , 84.425 Contact Person: Veryl Begay, Business Manager Anticipated Completion Date: December 31, 2023 Planned Corrective Action: KRCI Business Manager will complete SF-425 submissions by the quarterly required date.
2022-004
FAC accepted this audit on October 30, 2023 — management decision was due April 30, 2024.
CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advanced payments as “deferred revenue”), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or Securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States CONDITION The Campus had investments of federal funds that were deemed unallowable. CAUSE The Campus did not have a process in place to ensure that investment types were allowable. EFFECT The Campus was not in compliance with Indian Self-Determination and the Education Assistance Act CONTEXT The Campus had investments of $540,574 that appear to be unallowable. RECOMMENDATION The Campus should ensure its financial investments are only invested in the obligations of the United States or mutual funds registered with the SEC and which only invest in obligations of the United States
Show full finding ▾Hide full finding ▴CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advanced payments as “deferred revenue”), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or Securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States CONDITION The Campus had investments of federal funds that were deemed unallowable. CAUSE The Campus did not have a process in place to ensure that investment types were allowable. EFFECT The Campus was not in compliance with Indian Self-Determination and the Education Assistance Act CONTEXT The Campus had investments of $540,574 that appear to be unallowable. RECOMMENDATION The Campus should ensure its financial investments are only invested in the obligations of the United States or mutual funds registered with the SEC and which only invest in obligations of the United States
Contact Person: Veryl Begay, Business Manager Anticipated Completion Date: December 31, 2023 Planned Corrective Action: On December 19, 2017, KRCI set up an account with Atlantic Coast Life to “invest funds”. The initial investment was $388,532 and the amount was presented to the Account Representative in the form of a cashiers check. On August 8, 2018, KRCI opened a second account with Atlantic Coast Life in the amount of $74,799. The annuitant and only signatory on record is a Board member. The past three audits have indicated that these accounts are a finding because they are not insured by the FDIC or any other acceptable entity. The Director has reached out to Atlantic Coast Corporate Office to close out or surrender these accounts.
2021-001
CRITERIA The Board adopted policies that require the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider, or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR §180.220. CONDITION The Campus did not follow its Board adopted policies or federal regulations regarding the collection of quotes and suspension and debarment. CAUSE The Campus has not implemented controls to perform the collection of quotes and suspension and debarment checks for vendors. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with the Board adopted policies. Additionally, the Campus was not compliant with 2 CFR §180.220 and as a result could have entered into a contract with a suspended or debarred party. CONTEXT For two of two purchases reviewed within the Campus’s quote range, quotes were not maintained. In addition, the Campus did not check to see if vendors were suspended or debarred. However, it was determined that vendors were not suspended or debarred. Samples were not intended to be, and were not, statistically valid samples.
Show full finding ▾Hide full finding ▴CRITERIA The Board adopted policies that require the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider, or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR §180.220. CONDITION The Campus did not follow its Board adopted policies or federal regulations regarding the collection of quotes and suspension and debarment. CAUSE The Campus has not implemented controls to perform the collection of quotes and suspension and debarment checks for vendors. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with the Board adopted policies. Additionally, the Campus was not compliant with 2 CFR §180.220 and as a result could have entered into a contract with a suspended or debarred party. CONTEXT For two of two purchases reviewed within the Campus’s quote range, quotes were not maintained. In addition, the Campus did not check to see if vendors were suspended or debarred. However, it was determined that vendors were not suspended or debarred. Samples were not intended to be, and were not, statistically valid samples.
Contact Person: Richard Edwards, Director Anticipated Completion Date: December 31, 2023 Planned Corrective Action: KRCI will consult the Federal Excluded Parties List System (EPLS) before awarding consults or fund KRCI has reviewed and revised policy and procedure at a recent Board retreat in July 2022. KRCI is implementing a school wide accounting software that can include a trusted vendor list, a step for vetting vendors and inclusion and safekeeping of records in January 2024.
2021-002
CRITERIA Campus management is responsible for establishing and maintaining internal controls over disbursements that are adequate to ensure that all financial activities are properly processed and reported. Additionally, the Campus is required, except where otherwise authorized by statute, to ensure costs meet the general criteria outlined in 2 CFR 200.403 in order to be allowable under federal awards, including the costs be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. The Single Audit Reporting Package must have a report date nine months after fiscal year-end. CONDITION The Campus did not follow its Board adopted policies for federal regulations regarding disbursements to ensure all financial activities were properly processed, recorded in the appropriate fiscal year, and supported. The Campus did not provide all of the audit information for fiscal year 2021-22 in a timely manner to allow sufficient time for the audit to be completed by the deadline. CAUSE The Campus has not implemented controls over disbursement transactions. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with Board adopted policies for federal regulations and guidelines. CONTEXT The following items were noted during our review of disbursement transactions: For four of 40 disbursements reviewed, supporting documentation was not maintained. The Campus did not maintain credit card statements for all credit cards. The Campus did not maintain a complete list of credit card users to ensure possession was monitored. For six of 40 disbursements reviewed, dual signatures were not obtained when issuing the check.
Show full finding ▾Hide full finding ▴CRITERIA Campus management is responsible for establishing and maintaining internal controls over disbursements that are adequate to ensure that all financial activities are properly processed and reported. Additionally, the Campus is required, except where otherwise authorized by statute, to ensure costs meet the general criteria outlined in 2 CFR 200.403 in order to be allowable under federal awards, including the costs be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. The Single Audit Reporting Package must have a report date nine months after fiscal year-end. CONDITION The Campus did not follow its Board adopted policies for federal regulations regarding disbursements to ensure all financial activities were properly processed, recorded in the appropriate fiscal year, and supported. The Campus did not provide all of the audit information for fiscal year 2021-22 in a timely manner to allow sufficient time for the audit to be completed by the deadline. CAUSE The Campus has not implemented controls over disbursement transactions. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with Board adopted policies for federal regulations and guidelines. CONTEXT The following items were noted during our review of disbursement transactions: For four of 40 disbursements reviewed, supporting documentation was not maintained. The Campus did not maintain credit card statements for all credit cards. The Campus did not maintain a complete list of credit card users to ensure possession was monitored. For six of 40 disbursements reviewed, dual signatures were not obtained when issuing the check.
Contact Person: Begay, Business Manager Anticipated Completion Date: December 31, 2023 KRCI policy and procedure was reviewed and revised beginning November 2021 and completed in July 2022 at a Board retreat. The KRCI Business Office was reorganized to ensure separation and segregation of duties in August 2022. KRCI is fully staffed and returned staff that were not working during the closure to return the Campus to full improvement. KRCI now employs a Clerk for Accounts Receivable, a Business/HR Tech for Human Resources and Accounts Payable, a Facilities/Property Tech for receiving and inventory, and a Business Manager in July 2022.
2021-003
CRITERIA The Campus is required to report cumulative program outlays and program income on the Federal Financial Report, SF-425. Quarterly and semi-annual reports are required to be submitted no later than 30 days after the end of each reporting period. CONDITION Federal Financial Reports SF-425 were not always submitted on a timely basis. CAUSE The Campus’s procedures were not always followed due to turnover at the Campus. EFFECT The Campus was not always in compliance with federal regulations and guidelines for SF-425 submission. CONTEXT The second and fourth quarter Federal Financial Report, SF-425 was not filed within 30 days of the end of the reporting period.
Show full finding ▾Hide full finding ▴CRITERIA The Campus is required to report cumulative program outlays and program income on the Federal Financial Report, SF-425. Quarterly and semi-annual reports are required to be submitted no later than 30 days after the end of each reporting period. CONDITION Federal Financial Reports SF-425 were not always submitted on a timely basis. CAUSE The Campus’s procedures were not always followed due to turnover at the Campus. EFFECT The Campus was not always in compliance with federal regulations and guidelines for SF-425 submission. CONTEXT The second and fourth quarter Federal Financial Report, SF-425 was not filed within 30 days of the end of the reporting period.
Contact Person: Veryl Begay, Business Manager Anticipated Completion Date: December 31, 2023 Planned Corrective Action: KRCI Business Manager will complete SF-425 submissions by the quarterly required date.
2021-004
FAC accepted this audit on January 24, 2023 — management decision was due July 24, 2023.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2021-001 Repeat Finding: Yes, 2020-001, 2019-001 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A190AV00858 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Special Tests and Provisions CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advanced payments as ?deferred revenue?), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or Securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States. According to the Indian Child Protection and Family Violence Protection Act (25 USC ?3201 etc. Sec.), the School must conduct a character investigation of each individual who is employed or is being considered for employment in a position that involves regular contact with, or control over, Indian children. The investigation should be reinvestigated every five years. The Act further states that the Schools may employee individuals in those positions only if the individuals meet standards of character, no less stringent than those prescribed under subpart B ? Minimum Standards of Character and Suitability for Employment (25 CFR part 63). CONDITION The Campus had investments of federal funds that were deemed unallowable. In addition, the Campus did not have adequate character investigations on file for all employees. CAUSE The Campus did not have a process in place to ensure that investment types were allowable. In addition, policies were not always followed or controls were not in place to ensure timely character investigations are performed and all adequate documentation is maintained. EFFECT The Campus was not in compliance with Indian Self-Determination and the Education Assistance Act. In addition, the Campus was not in compliance with the Indian Child Protection and Family Violence Prevention Act. CONTEXT The Campus had investments of $524,106 that appear to be unallowable. In addition, during our review of the Campus's character investigations, for seven of 15 background investigations reviewed no investigation was on file. The sample was not intended to be, and was not a statistically valid sample. RECOMMENDATION The Campus should ensure its financial investments are only invested in the obligations of the United States or mutual funds registered with the SEC and which only invest in obligations of the United States. In addition, the Campus should. ensure adequate character investigations are performed and documentation is maintained in a timely manner to achieve full compliance with the Campus?s policies and the Indian Child Protection and Family Violence Prevention Act. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Show full finding ▾Hide full finding ▴FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2021-001 Repeat Finding: Yes, 2020-001, 2019-001 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A190AV00858 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Special Tests and Provisions CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advanced payments as ?deferred revenue?), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or Securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States. According to the Indian Child Protection and Family Violence Protection Act (25 USC ?3201 etc. Sec.), the School must conduct a character investigation of each individual who is employed or is being considered for employment in a position that involves regular contact with, or control over, Indian children. The investigation should be reinvestigated every five years. The Act further states that the Schools may employee individuals in those positions only if the individuals meet standards of character, no less stringent than those prescribed under subpart B ? Minimum Standards of Character and Suitability for Employment (25 CFR part 63). CONDITION The Campus had investments of federal funds that were deemed unallowable. In addition, the Campus did not have adequate character investigations on file for all employees. CAUSE The Campus did not have a process in place to ensure that investment types were allowable. In addition, policies were not always followed or controls were not in place to ensure timely character investigations are performed and all adequate documentation is maintained. EFFECT The Campus was not in compliance with Indian Self-Determination and the Education Assistance Act. In addition, the Campus was not in compliance with the Indian Child Protection and Family Violence Prevention Act. CONTEXT The Campus had investments of $524,106 that appear to be unallowable. In addition, during our review of the Campus's character investigations, for seven of 15 background investigations reviewed no investigation was on file. The sample was not intended to be, and was not a statistically valid sample. RECOMMENDATION The Campus should ensure its financial investments are only invested in the obligations of the United States or mutual funds registered with the SEC and which only invest in obligations of the United States. In addition, the Campus should. ensure adequate character investigations are performed and documentation is maintained in a timely manner to achieve full compliance with the Campus?s policies and the Indian Child Protection and Family Violence Prevention Act. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Findings and Questioned Costs Related to Federal Awards Finding Number: 2021-001 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Contact Person: Richard Edwards, Director and Veryl Begay, Business Manager Anticipated Completion Date: December 31, 2022 Planned Corrective Action: On December 19, 2017, KRCI set up an account with Atlantic Coast Life to ?invest funds?. The initial investment was $388,532 and the amount was presented to the Account Representative in the form of a cashiers check. The Account is set to hit maturity on December 19, 2022. On August 8, 2018, KRCI opened a second account with Atlantic Coast Life in the amount of $74,799. The annuitant and only signatory on record is a Board member. The past two audits have indicated that these accounts are a finding because they are not insured by the FDIC or any other acceptable entity. The Director reached out to Atlantic Coast Corporate Office to close out or surrender these accounts but because the authority to make decisions or changes were solely in the hand of this Board member. The Board member refused to sign off or make any changes. On November 17, 2022, the Kinteel Residential Campus Board of Trustees met with an Atlantic Coast Life representative. The representative was unable to provide proof the investments were secured by an acceptable method. The Board member was again give the opportunity to withdraw the funds or close out the account but indicated they wished to continue the relationship with Atlantic Coast despite the audit findings. The other two Board members indicated the need to take back the funds because of the audit findings. A DODE Representative was also in attendance. At conclusion of the meeting, the Atlantic Coast Life representative was instructed to prepare documents to remove the Board member as annuitant and signatory, replace them with the Director and another Board member, and to prepare the document to close the accounts and return all funds to KRCI. The Board of trustees will meet on December 9, 2022 to approve these actions. ? Both accounts will be closed by December 19, 2022. ? KRCI will ensure that any future funds are secured by FDIC. ? KRCI has reviewed and revised its policy regarding the use of funds in July 2022. The second issue are the background checks. At the time, background checks had been completed for employees, but the files were unable to be located. The files were finally discovered in the office of the former Business Manager. The files were not in a secure location, rather in a pile on top of their file cabinet or in a drawer of their desk. The remaining files were in a fire safe cabinet but the key to that file was not available. After an exhaustive search the key and files were located. Currently KRCI is up to date with background checks. ? KRCI has completed reviewing employee files to be in compliance with the five-year requirement. Three employees brough back from the reduction in force are being renewed. This will be completed by November 28, 2022. ? KRCI currently has two certified adjudicators ? the Director and the Facilities/Property Tech. ? KRCI has procured Livescan equipment which allows fingerprints to be scanned electronically. FBI results are usually obtained within hours, while State and local results are usually obtained within 24 to 48 hours. Tribal results are still subject to a lengthy process. ? Sex offender databases are searched and KRCI purchased the Raptor Visitors System to screen all visitors and vendors when they check into the Front Office. All visitors and vendors on Campus are required to check in through the front office. The system searches sex offender databases and several other databases for high-risk individuals before granting access and a visitor pass. This will be implemented in December 2022. ? KRCI has reorganized the front office to provide for secure record keeping. KRCI purchased to firesafe file cabinets and relocated staff and student records to a secure location. ? KRCI has updated language on assurances that all employees must sign regarding child safety in February 2022.
2020-001
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2021-002 Repeat Finding: Yes, 2020-002, 2019-002 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00858 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement and Suspension and Debarment CRITERIA The Board adopted policies that requires the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR ?180.220. CONDITION The Campus did not follow its Board adopted policies or federal regulations regarding the collection of quotes and suspension and debarment. CAUSE The Campus has not implemented controls to perform the collection of quotes and suspension and debarment checks for vendors. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with the Board adopted policies. Additionally, the Campus was not compliant with 2 CFR ?180.220 and as a result could have entered into a contract with a suspended or debarred party. CONTEXT For one of two purchases reviewed within the Campus?s quote range, quotes were not maintained. In addition, the Campus did not check to see if vendors were suspended or debarred. However, it was determined that vendors were not suspended or debarred. Samples were not intended to be, and were not, statistically valid samples. RECOMMENDATION The Campus should adhere to its Board adopted policies and implement procedures for performing suspension and debarment checks. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Show full finding ▾Hide full finding ▴FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2021-002 Repeat Finding: Yes, 2020-002, 2019-002 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00858 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement and Suspension and Debarment CRITERIA The Board adopted policies that requires the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR ?180.220. CONDITION The Campus did not follow its Board adopted policies or federal regulations regarding the collection of quotes and suspension and debarment. CAUSE The Campus has not implemented controls to perform the collection of quotes and suspension and debarment checks for vendors. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with the Board adopted policies. Additionally, the Campus was not compliant with 2 CFR ?180.220 and as a result could have entered into a contract with a suspended or debarred party. CONTEXT For one of two purchases reviewed within the Campus?s quote range, quotes were not maintained. In addition, the Campus did not check to see if vendors were suspended or debarred. However, it was determined that vendors were not suspended or debarred. Samples were not intended to be, and were not, statistically valid samples. RECOMMENDATION The Campus should adhere to its Board adopted policies and implement procedures for performing suspension and debarment checks. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding Number: 2021-002 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Contact Person: Richard Edwards, Director Anticipated Completion Date: January 31, 2023 Planned Corrective Action: ? KRCI will consult the Federal Excluded Parties List System (EPLS) before awarding consults or fund. However, this action would not have prevented the awarding of the contracts in the ongoing fraud case. The vendor in question did not appear on that list based on a recent review. Additional measures are needed. In this case a simple background check or criminal search of the company would have revealed multiple red flags. Record keeping is again an issue. ? KRCI has reviewed and revised policy and procedure at a recent Board retreat in July 2022. ? KRCI is implementing a school wide accounting software that can include a trusted vendor list, a step for vetting vendors and inclusion and safekeeping of records in January 2023. ? KRCI is implementing a school wide accounting software that can include a trusted vendor list, a step for vetting vendors and inclusion and safekeeping of records in January 2023. ? KRCI will conduct reference, fraud, and criminal checks on vendors and/or contractors. ? KRCI will maintain a trusted vendor list in January 2023.
2020-002
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2021-003 Repeat Finding: Yes, 2020-003 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization Program 15.042 A19AV00858 N/A Administrative Cost Grants for Indian Schools 15.046 A19AV00858 N/A COVID-19 Education Stabilization Fund 84.425 A19AV00858 N/A Federal Agency: U.S. Department of the Interior Pass-Through Agency: Bureau of Indian Education Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting Finding 2021-003, which is discussed in detail in Findings Related to Financial Statements Reported in Accordance with Government Auditing Standards as finding FS-2021-003, was considered to be applicable to Findings and Questioned Costs Related to Federal Awards.
Show full finding ▾Hide full finding ▴FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2021-003 Repeat Finding: Yes, 2020-003 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization Program 15.042 A19AV00858 N/A Administrative Cost Grants for Indian Schools 15.046 A19AV00858 N/A COVID-19 Education Stabilization Fund 84.425 A19AV00858 N/A Federal Agency: U.S. Department of the Interior Pass-Through Agency: Bureau of Indian Education Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Reporting Finding 2021-003, which is discussed in detail in Findings Related to Financial Statements Reported in Accordance with Government Auditing Standards as finding FS-2021-003, was considered to be applicable to Findings and Questioned Costs Related to Federal Awards.
Finding Number: 2021-003 Program Name/Assistance Listing Title: Indian School Equalization Program, Administrative Cost Grants for Indian Schools, COVID-19 Education Stabilization Fund Assistance Listing Number: 15.042, 15.046, 85.425 Contact Person: Richard Edwards, Director and Veryl Begay, Business Manager Anticipated Completion Date: January 31, 2023 Planned Corrective Action: See planned corrective action for Finding FS-2021-003 for context. ? KRCI policy and procedure was reviewed and revised beginning November 2021 and completed in July 2022 at a Board retreat. ? The KRCI Business Office was reorganized to ensure separation and segregation of duties in August 2022. ? KRCI is fully staffed and returned staff that were not working during the closure to return the Campus to full improvement. ? KRCI now employs a Clerk for Accounts Receivable, a Business/HR Tech for Human Resources and Accounts Payable, a Facilities/Property Tech for receiving and inventory, and a Business Manager in July 2022. ? Back up access has been created to vital and critical programs and software systems. ? KRCI has implemented a credit card policy and process in February 2022. ? KRCI has implemented business standards and operating procedure and provided staff orientation on the process in November 2022. ? KRCI is implementing a software platform to track, monitor, and document all procurement and transactions called ?MySchoolAccounting? through TES software. This will be fully implemented in January 2023. ? Record keeping has been addressed and a system has been established including a backup using a secure electronic file cabinet. ? The front office has been renovated and updated to create an efficient record keeping protocol in November 2022.
2020-003
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2021-004 Repeat Finding: No Program Names/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00858 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance Compliance Requirements: Reporting CRITERIA The Campus is required to report cumulative program outlays and program income on the Federal Financial Report, SF-425. Quarterly and semi-annual reports are required to be submitted no later than 30 days after the end of each reporting period. CONDITION Federal Financial Reports SF-425 were not always submitted timely. CAUSE The Campus?s procedures were not always followed due to turnover at the Campus. EFFECT The Campus was not always in compliance with federal regulations and guidelines for SF-425 submission. CONTEXT The second and fourth quarter Federal Financial Report, SF-425 was not filed within 30 days of the end of the reporting period. RECOMMENDATION The Campus should file the Federal Financial Reports, SF-425 in a timely manner. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Show full finding ▾Hide full finding ▴FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2021-004 Repeat Finding: No Program Names/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00858 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance Compliance Requirements: Reporting CRITERIA The Campus is required to report cumulative program outlays and program income on the Federal Financial Report, SF-425. Quarterly and semi-annual reports are required to be submitted no later than 30 days after the end of each reporting period. CONDITION Federal Financial Reports SF-425 were not always submitted timely. CAUSE The Campus?s procedures were not always followed due to turnover at the Campus. EFFECT The Campus was not always in compliance with federal regulations and guidelines for SF-425 submission. CONTEXT The second and fourth quarter Federal Financial Report, SF-425 was not filed within 30 days of the end of the reporting period. RECOMMENDATION The Campus should file the Federal Financial Reports, SF-425 in a timely manner. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding Number: 2021-004 Program Name/Assistance Listing Title: Indian School Equalization Program Assistance Listing Number: 15.042 Contact Person: Veryl Begay, Business Manager Anticipated Completion Date: December 31, 2022 Planned Corrective Action: KRCI Business Manager will complete SF-425 submissions by the quarterly required date.
FAC accepted this audit on July 20, 2021 — management decision was due January 20, 2022.
Finding Number: 2020-001 Repeat Finding: Yes, 2019-001 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00858 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Special Tests and Provisions CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advanced payments as ?deferred revenue?), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or Securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the advance funds, even in the event of a bank failure (25 USC 450e-3). CONDITION The Campus?s bank balance was not collateralized and the Campus had investments of federal funds that were deemed unallowable. CAUSE The Campus did not have a process in place to ensure that bank balances were fully collateralized and investment types were allowable. EFFECT The Campus was not in compliance with Indian Self-Determination and the Education Assistance Act. CONTEXT The Campus?s bank balance was not fully collateralized. The uncollateralized amount at June 30, 2020 totaled $2,451,439. In addition, the Campus had investments of $507,682 that appear to be unallowable. RECOMMENDATION The Campus should ensure all funds are deposited only into accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the funds, even in the event of a bank failure. Additionally, the Campus should ensure its financial investments are only invested in the obligations of the United States or mutual funds registered with the SEC and which only invest in obligations of the United States. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Number: 2020-001 Repeat Finding: Yes, 2019-001 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00858 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Special Tests and Provisions CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advanced payments as ?deferred revenue?), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or Securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the advance funds, even in the event of a bank failure (25 USC 450e-3). CONDITION The Campus?s bank balance was not collateralized and the Campus had investments of federal funds that were deemed unallowable. CAUSE The Campus did not have a process in place to ensure that bank balances were fully collateralized and investment types were allowable. EFFECT The Campus was not in compliance with Indian Self-Determination and the Education Assistance Act. CONTEXT The Campus?s bank balance was not fully collateralized. The uncollateralized amount at June 30, 2020 totaled $2,451,439. In addition, the Campus had investments of $507,682 that appear to be unallowable. RECOMMENDATION The Campus should ensure all funds are deposited only into accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the funds, even in the event of a bank failure. Additionally, the Campus should ensure its financial investments are only invested in the obligations of the United States or mutual funds registered with the SEC and which only invest in obligations of the United States. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding Number: 2020-001 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Contact Person: Board of Trustees: Marian John, Kerby Johnson, and David Tsosie Anticipated Completion Date: November 30, 2021 Planned Corrective Action: The Campus will enforce that funds are deposited only into accounts that are insured or fully collateralized by an agency or institution of the United States. The Campus will be in contact with bank institutions to secure proof of collateral. Board of Trustees will be account holders on all accounts/assets.
2019-001
Finding Number: 2020-002 Repeat Finding: Yes, 2019-002 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00858 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement and Suspension and Debarment CRITERIA The Board adopted policies that requires the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR ?180.220. CONDITION The Campus did not follow its Board adopted policies or federal regulations regarding the collection of quotes and suspension and debarment. CAUSE The Campus has not implemented controls to perform the collection of quotes and suspension and debarment checks for vendors. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with the Board adopted policies. Additionally, the Campus was not compliant with 2 CFR ?180.220 and as a result could have entered into a contract with a suspended or debarred party. CONTEXT For three of three purchases reviewed within the Campus?s quote range, quotes were not maintained. In addition, the Campus did not check to see if vendors were suspended or debarred. However, it was determined that the vendors were not suspended or debarred. Samples were not intended to be, and were not, statistically valid samples. RECOMMENDATION The Campus should adhere to its Board adopted policies and implement procedures for performing suspension and debarment checks. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Number: 2020-002 Repeat Finding: Yes, 2019-002 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00858 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement and Suspension and Debarment CRITERIA The Board adopted policies that requires the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR ?180.220. CONDITION The Campus did not follow its Board adopted policies or federal regulations regarding the collection of quotes and suspension and debarment. CAUSE The Campus has not implemented controls to perform the collection of quotes and suspension and debarment checks for vendors. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with the Board adopted policies. Additionally, the Campus was not compliant with 2 CFR ?180.220 and as a result could have entered into a contract with a suspended or debarred party. CONTEXT For three of three purchases reviewed within the Campus?s quote range, quotes were not maintained. In addition, the Campus did not check to see if vendors were suspended or debarred. However, it was determined that the vendors were not suspended or debarred. Samples were not intended to be, and were not, statistically valid samples. RECOMMENDATION The Campus should adhere to its Board adopted policies and implement procedures for performing suspension and debarment checks. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding Number: 2020-002 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Contact Person: Bonavita James, Business Manager Anticipated Completion Date: June 30, 2022 Planned Corrective Action: The Campus will enforce the procurement procedures for purchases over $10,000 and will obtain quotes as it is required before purchasing any items or services. The Campus will verify through the Federal excluded parties list system to make sure a vendor has not been suspended or debarred and document the results. The Board members will approve any bids for expenditures over $10,000. For any checks over $10,000 the signer will review quotes/bids and documents.
2019-002
Finding Number: 2020-003 Repeat Finding: No Program Names/CFDA Titles: CFDA Numbers: Federal Award No.?s: Questioned Costs: Indian School Equalization Program 15.042 A19AV00858 $36,813 Administrative Cost Grants for Indian Schools 15.046 A19AV00858 4,409 Federal Agency: U.S. Department of the Interior Pass-Through Agencies: Bureau of Indian Education Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles CRITERIA Campus management is responsible for establishing and maintaining internal controls over disbursements that are adequate to ensure that all financial activities are properly processed and reported. Additionally, the Campus is required, except where otherwise authorized by statute, to ensure costs meet the general criteria outlined in 2 CFR 200.403 in order to be allowable under federal awards, including the costs be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. CONDITION The Campus did not follow its Board adopted policies for federal regulations regarding disbursements to ensure all financial activities were properly processed, recorded in the appropriate fiscal year, and supported. CAUSE The Campus has not implemented controls over disbursement transactions. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with Board adopted policies or federal regulations and guidelines. CONTEXT The following items were noted during our review of disbursement transactions: ? For one of five disbursements reviewed for detail tests for expenditure cutoff, the Campus did not maintain adequate documentation, therefore, the date the goods/services were received could not be determined. ? For three of 40 disbursements reviewed, the purchase was not properly supported by a vendor invoice. ? For one of 40 disbursements reviewed, the obligation was not incurred during the period of performance. ? For 11 of 40 disbursements reviewed, the purchase order was not approved. ? For five of 40 disbursements reviewed, the Campus did not retain any copy of the purchase order. As a result, we were also unable to determine if the description and quantity agreed to the receiving report. ? For three of 40 disbursements reviewed, the Campus was unable to locate any supporting documentation. ? For one of five disbursements reviewed for detail tests for accounts payables, the Campus did not maintain adequate documentation, therefore, the date the goods or services were received could not be determined. ? For four of 25 travel reimbursements reviewed, there was a net overpayment of $53. ? For four of 25 travel reimbursements reviewed, the reimbursement was not reported as a taxable employee benefit. ? For 17 of 25 travel reimbursements reviewed, back up documentation was missing. ? Credit card statements were not always paid timely to avoid finance charges, resulting in late fees of $21 for the fiscal year. ? For two of ten credit card transactions reviewed, adequate documentation was not retained. ? For three of ten credit card transactions reviewed, the employee making the purchases was not clearly identified. ? The Campus had a list of credit card users during fiscal year 2020; however, credit card usage was not monitored as employees without authorization made purchases with the Campus?s cards. Samples were not intended to be, and were not, statistically valid samples. RECOMMENDATION The Campus should adhere to its Board adopted policies and federal regulations. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Number: 2020-003 Repeat Finding: No Program Names/CFDA Titles: CFDA Numbers: Federal Award No.?s: Questioned Costs: Indian School Equalization Program 15.042 A19AV00858 $36,813 Administrative Cost Grants for Indian Schools 15.046 A19AV00858 4,409 Federal Agency: U.S. Department of the Interior Pass-Through Agencies: Bureau of Indian Education Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles CRITERIA Campus management is responsible for establishing and maintaining internal controls over disbursements that are adequate to ensure that all financial activities are properly processed and reported. Additionally, the Campus is required, except where otherwise authorized by statute, to ensure costs meet the general criteria outlined in 2 CFR 200.403 in order to be allowable under federal awards, including the costs be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. CONDITION The Campus did not follow its Board adopted policies for federal regulations regarding disbursements to ensure all financial activities were properly processed, recorded in the appropriate fiscal year, and supported. CAUSE The Campus has not implemented controls over disbursement transactions. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with Board adopted policies or federal regulations and guidelines. CONTEXT The following items were noted during our review of disbursement transactions: ? For one of five disbursements reviewed for detail tests for expenditure cutoff, the Campus did not maintain adequate documentation, therefore, the date the goods/services were received could not be determined. ? For three of 40 disbursements reviewed, the purchase was not properly supported by a vendor invoice. ? For one of 40 disbursements reviewed, the obligation was not incurred during the period of performance. ? For 11 of 40 disbursements reviewed, the purchase order was not approved. ? For five of 40 disbursements reviewed, the Campus did not retain any copy of the purchase order. As a result, we were also unable to determine if the description and quantity agreed to the receiving report. ? For three of 40 disbursements reviewed, the Campus was unable to locate any supporting documentation. ? For one of five disbursements reviewed for detail tests for accounts payables, the Campus did not maintain adequate documentation, therefore, the date the goods or services were received could not be determined. ? For four of 25 travel reimbursements reviewed, there was a net overpayment of $53. ? For four of 25 travel reimbursements reviewed, the reimbursement was not reported as a taxable employee benefit. ? For 17 of 25 travel reimbursements reviewed, back up documentation was missing. ? Credit card statements were not always paid timely to avoid finance charges, resulting in late fees of $21 for the fiscal year. ? For two of ten credit card transactions reviewed, adequate documentation was not retained. ? For three of ten credit card transactions reviewed, the employee making the purchases was not clearly identified. ? The Campus had a list of credit card users during fiscal year 2020; however, credit card usage was not monitored as employees without authorization made purchases with the Campus?s cards. Samples were not intended to be, and were not, statistically valid samples. RECOMMENDATION The Campus should adhere to its Board adopted policies and federal regulations. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding Number: 2020-003 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Contact Person: Bonavita James, Business Manager Anticipated Completion Date: December 31, 2021 Planned Corrective Action: The business office will provide staff training on procurement protocol to enforce and follow all financial activities to ensure disbursements are properly processed and recorded in the appropriate fiscal year with supporting documentation per Board adopted policies in adherence to Federal regulations. Per procurement standards, employees will be responsible for procurement processes to ensure the campus?s vendors, contractors, and/or subcontractors perform in accordance with the terms, conditions and specifications of their contracts or purchase orders. Credit card usage has been ceased due to inadequate documentation. Accounts have been closed with the card issuer.
FAC accepted this audit on September 17, 2020 — management decision was due March 17, 2021.
Finding Number: 2019-001 Repeat Finding: No Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Federal Agency: U.S. Department of Interior Federal Award Number: A18AV00637 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Special Tests and Provisions CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advance payments as ?deferred revenue?), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the advance funds, even in the event of a bank failure (25 USC 450e-3). CONDITION The School?s bank balance was not collateralized and the School had investments of federal funds that were deemed unallowable. CAUSE The School did not have a process in place to ensure that bank balances were fully collateralized and investment types were allowable. EFFECT The School was not in compliance with Indian Self-Determination and the Education Assistance Act. CONTEXT The Campus?s bank balance was not fully collateralized. The uncollateralized amount at June 30, 2019 totaled $1,774,765. In addition, the Campus had investments of $491,136 that appear to be unallowable. RECOMMENDATION The Campus should ensure all funds are deposited only into accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the funds, even in the event of a bank failure. Additionally, the Campus should ensure its financial investments are only invested in the obligations of the United States or mutual funds registered with the SEC and which only invest in obligations of the United States. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Number: 2019-001 Repeat Finding: No Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Federal Agency: U.S. Department of Interior Federal Award Number: A18AV00637 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Special Tests and Provisions CRITERIA A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advance payments as ?deferred revenue?), before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission (SEC) and which only invest in obligations of the United States or securities that are guaranteed or insured by the United States or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the advance funds, even in the event of a bank failure (25 USC 450e-3). CONDITION The School?s bank balance was not collateralized and the School had investments of federal funds that were deemed unallowable. CAUSE The School did not have a process in place to ensure that bank balances were fully collateralized and investment types were allowable. EFFECT The School was not in compliance with Indian Self-Determination and the Education Assistance Act. CONTEXT The Campus?s bank balance was not fully collateralized. The uncollateralized amount at June 30, 2019 totaled $1,774,765. In addition, the Campus had investments of $491,136 that appear to be unallowable. RECOMMENDATION The Campus should ensure all funds are deposited only into accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the funds, even in the event of a bank failure. Additionally, the Campus should ensure its financial investments are only invested in the obligations of the United States or mutual funds registered with the SEC and which only invest in obligations of the United States. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding Number: 2019-001 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Contact Person: Lorraine Ashley, Acting Director Anticipated Completion Date: October 1, 2020 Planned Corrective Action: The School will ensure that funds are deposited only into accounts that are insured or fully collateralized by an agency or instrumentality of the United States. The Business Office will be in contact with the bank institutions to secure proof of collateral. The School will select more banks in order to secure the cash assets.
Finding Number: 2019-002 Repeat Finding: No Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Federal Agency: U.S. Department of Interior Federal Award Number: A18AV00637 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment CRITERIA The Board adopted policies that requires the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR section 180.220. CONDITION The Campus did not follow its Board adopted policies or federal regulations regarding suspension and debarment. CAUSE The Campus has not implemented controls to perform suspension and debarment checks for vendors. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with the Board adopted policies. Additionally, the Campus was not compliant with 2 CFR section 180.220 and as a result could have entered into a contract with a suspended or debarred party. CONTEXT The sample was not intended to be, and was not, a statistically valid sample. For three of four purchases reviewed within the Campus?s quote range, quotes were not maintained. In addition, for purchases involving the one of four vendors where quotes were maintained, the Campus received allegations that fake quotes were provided. Finally, the Campus did not check to see if vendors were suspended or debarred. However, it was determined that the vendors were not suspended or debarred. RECOMMENDATION The Campus should adhere to its Board adopted policies and implement procedures for performing suspension and debarment checks. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Show full finding ▾Hide full finding ▴Finding Number: 2019-002 Repeat Finding: No Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Federal Agency: U.S. Department of Interior Federal Award Number: A18AV00637 Pass-Through Agency: Bureau of Indian Education Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment CRITERIA The Board adopted policies that requires the collection of quotes for purchases of at least $10,000 but no more than $100,000, and formal bid procedures for purchases over $100,000. In addition, the Uniform Guidance requires employees to verify that the vendor, supplier, contractor, subcontractor, provider or their respective principals (e.g., owners, top management, etc.) with expenditures in excess of $25,000 are not suspended, debarred or otherwise excluded by the Federal Government. The Campus should consult the Federal Excluded Parties List System (EPLS) before awarding funds and print the documentation to maintain in the contract file. This requirement is specified in 2 CFR section 180.220. CONDITION The Campus did not follow its Board adopted policies or federal regulations regarding suspension and debarment. CAUSE The Campus has not implemented controls to perform suspension and debarment checks for vendors. In addition, documentation was not always maintained. EFFECT The Campus was not in compliance with the Board adopted policies. Additionally, the Campus was not compliant with 2 CFR section 180.220 and as a result could have entered into a contract with a suspended or debarred party. CONTEXT The sample was not intended to be, and was not, a statistically valid sample. For three of four purchases reviewed within the Campus?s quote range, quotes were not maintained. In addition, for purchases involving the one of four vendors where quotes were maintained, the Campus received allegations that fake quotes were provided. Finally, the Campus did not check to see if vendors were suspended or debarred. However, it was determined that the vendors were not suspended or debarred. RECOMMENDATION The Campus should adhere to its Board adopted policies and implement procedures for performing suspension and debarment checks. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Finding Number: 2019-002 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Contact Person: Lorraine Ashley, Acting Director Anticipated Completion Date: October 1, 2020 Planned Corrective Action: The Business Office will enforce the procurement procedures for purchases over $10,000 and will obtain quotes as it is required before purchasing any items or services. The Business Office will verify through the Federal Excluded Parties List System to make sure a vendor has not been suspended or debarred and document the result. Each month a Board member will review the bids for expenditures over $10,000. For any check over $10,000, the signer will review the bids.
FAC accepted this audit on May 14, 2017 — management decision was due November 14, 2017.
2015-001
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