Navajo Technical UniversityTribal Government

2023-006 – Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2022 – May 31, 2023 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2023, NTU’s unrestricted cash and cash equivalents and investments and unearned grant revenue totaled $33,024,886 and $39,121,460, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents and investments by $6,096,574. Questioned Costs: None. Context: Federal programs that have provided advanced funds to NTU. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor’s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management’s Response: NTU has established a monthly cash management schedule to track and identify all grant funds, detailing the total cash received in advance from grantors and amounts due to NTU. To increase cash balances, NTU will focus on the timely collection of outstanding grants receivable. Additionally, NTU will analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is available for grants received in advance. Responsible Party: Beverly Miller, Accounting Manager Anticipated Completion: July 2024

2023-007 –Eligibility Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2022 – May 31, 2023 Criteria: Internal controls must be in place to determine if students at NTU are eligible to receive PELL and FSEOG. A student must (1) Qualify as an eligible student under 34 CFR Part 668, Subpart C, (2) Is enrolled in an eligible undergraduate program and (3) Has financial need. Condition: During our testing of 40 students, we noted the following: • One student was awarded and disbursed more PELL funding than what a student with their parental contribution should have been. • Eight students did not have adequate supporting documentation to support the students were eligible for PELL and/or FSEOG. Questioned Costs: None. Context: Nine out of forty students selected for eligibility testing during fiscal year 2023. Cause and Effect: Internal controls were not implemented to ensure PELL funding provided to students was accurate and documentation was available to support student eligibility under the Student Financial Aid Cluster. NTU is not in compliance with federal requirements. Auditor’s Recommendation: Established policies and procedures should be enforced to ensure PELL awards to students are accurately calculated and documentation is maintained to support student eligibility determinations made by NTU for financial assistance. Management’s Response: NTU will improve processes to ensure proper maintenance of source documentation supporting student eligibility determinations. Additionally, staff will receive comprehensive training sessions on eligibility determination and documentation requirements. Responsible Party: Gary Segaye, Financial Aid Director and Dr. Delores Becenti, Director of Enrollment Anticipated Completion: July 2024

2023-008 – Special Tests and Provisions (Return of Title IV Funds) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2022 – May 31, 2023 Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs no later than 45 days after the date of determination of a student’s withdrawal. Condition: During our evaluation of Return of Title IV funds, we noted the following: • NTU did not return funds to Title IV programs within the required 45-day timeframe. In April 2024, $27,108 was remitted back to the U.S. Department of Education related to Title IV programs for fiscal year 2023, which was well beyond the 45-day timeframe. • Ten students tested did not have documentation to support that an R2T4 calculation was performed. Questioned Costs: None. Context: Ten out of ten students tested that received Title IV student financial aid and did not earn any credits in one of the semesters in fiscal year 2023. Cause and Effect: NTU did not have effective internal controls to ensure return to Title IV funds were performed timely and in accordance with federal requirements. Additionally, source documentation was not maintained to support R2T4 calculations performed. Auditor’s Recommendation: Establish formal procedures to ensure compliance with federal student aid requirements. These policies and procedures should address students that withdrawal from classes without notifying NTU. Consider performing student file audits to ensure Return of Title IV calculations are performed. Lastly, consider increasing coordination efforts between the finance department and the student financial aid department to ensure amounts due back to Title IV programs are determined and remitted timely. Management’s Response: NTU will establish formal policies and procedures for the Return of Title IV Funds, ensuring alignment with U.S. Department of Education requirements. These procedures will cover student withdrawals and the necessary data entry and monitoring within the student information system. The Accounting Manager in the Student Accounts section of NTU’s Business Office will review all student enrollment transactions to ensure compliance with Return to Title IV requirements. Responsible Party: Gary Segaye, Financial Aid Director, Delores Becenti, Enrollment Director, and Geraldine Gamble, Accounting Manager Anticipated Completion: July 2024

2023-009 – Special Tests and Provisions (Enrollment Reporting) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2022 – May 31, 2023 Criteria: Institutions are required to report enrollment information under the Pell grant via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. Condition: During our evaluation of NSLDS enrollment reporting, we noted the following: • Ten students did not have adequate supporting documentation to support their records were updated in the NSLDS database. Questioned Costs: None. Context: Ten out of ten students that had an enrollment status change in fiscal year 2023. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with enrollment reporting requirements of the Student Financial Aid Cluster. 34 CFR 690.83(c) states, “In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the (reporting) requirements specified”. There is a risk that NTU could face a potential fine if the required information is not being reported. Auditors’ Recommendation: Develop and implement internal controls to ensure the enrollment reporting requirements of the Student Financial Aid Cluster are met. Management’s Response: NTU will develop formal policies and procedures regarding enrollment reporting. This will include identifying the necessary enrollment data to update the National Student Loan Database System (NSLDS) on a timely basis in accordance with the Student Financial Aid Cluster requirements. NTU will be hiring an additional Financial Aid Technician and a Financial Aid Counselor to assist in addressing this finding. Responsible Party: Delores Becenti, Enrollment Director Anticipated Completion: July 2024

2023-010 – Special Tests and Provisions (Gramm-Leach-Bliley Act – Student Information Security) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2022 – May 31, 2023 Criteria: Title IV-eligible institutions are subject to the Gramm-Leach-Bliley Act (the “Act”). The Act requires institutions to perform the following: • Develop, implement, and maintain a written information security program. • Designate the employee(s) responsible for coordinating the information security program. • Identify and assess risks to customer information. • Design and implement an information safeguards program Condition: We found that NTU has developed an information security plan, however this plan has not been formally adopted and implemented by NTU. Questioned Costs: None. Context: Evaluation of NTU’s information security protocols as it relates to the Gramm-Leach-Bliley Act requirements of the Student Financial Aid Cluster. Cause and Effect: NTU has not formally adopted and implemented an information security plan that addresses the requirements of the Gramm-Leach-Bliley Act. NTU did not comply with OMB Uniform Guidance related to special tests and provisions for the Student Financial Aid Cluster. Auditor’s Recommendation: Formally adopt and implement an information security plan that adequately address the requirements of the Student Financial Assistance Cluster. Management’s Response: NTU has developed an information security plan, the plan will be presented to NTU Board of Regents for ratification and adoption Responsible Party: Jared Ribble, Information Technology Director Anticipated Completion: July 2024

2023-011 – Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: National Aeronautics and Space Administration, U.S. Department of Education, and U.S. Department of Interior Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions, Indian Post Secondary Schools Assistance Listing Number: 43.008, 84.245, 15.058 Award Period: June 1, 2022 – May 31, 2023 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster – • One payroll transaction totaling $1,875 did not have accurate source documentation to support the allocation of salaries and wages expenditures charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions – • Two transactions totaling $3,475 did not have accurate source documentation to support the group insurance expenditures charged to the program. • Two payroll transactions totaling $8,957 did not have accurate source documentation to support the allocation of salaries and wages expenditures charged to the program. Indian Post Secondary Schools • One transaction totaling $212 did not have accurate source documentation to support the travel expenditures charged to the program. Questioned Costs: None exceeding $25,000. Context: One of twenty-five payroll transactions tested for the Research and Development Cluster. Four of fifty payroll and non-payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-five non-payroll transactions tested for the Indian Post Secondary Schools. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and Indian Post Secondary programs. Auditor’s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs. Management’s Response: NTU will implement a monthly review process for all grant expenditures to ensure that amounts charged to federal awards are accurately posted and reflected in the accounting system. The Accounting Manager and Senior Accountant will review all journal entries for accuracy. Payroll allocations provided by the Human Resources office will also be included in the monthly review to verify the accuracy of payroll expenditures. Additionally, Principal Investigators and program managers will be given read-only access to the accounting system to review expenditure postings for accuracy. Responsible Party: Beverly Miller, Accounting Manager and Harshwal & Company, LLC Anticipated Completion: July 2024

2023-012 – Cash Management Federal Program Information: Funding Agency: National Science Foundation, National Aeronautics and Space Administration, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions Assistance Listing Number: 43.008, 47.049, 47.067, 47.076, 81.123, 84.245 Award Period: June 1, 2022 – May 31, 2023 Criteria: Internal controls must be in place demonstrate that the time between the transfer of funds from the federal entity to the non-federal entity and disbursement by the non-federal entity has been adequately minimized. This includes ensuring reimbursement and drawdown requests are adequately supported by underlying source documentation. Condition: We found the following during our evaluation of cash drawdowns: Research and Development Cluster – • Eight drawdowns did not have adequate source documentation to support the amount of funds drawn down. Tribally Controlled Postsecondary Career and Technical Institutions – • Nine drawdowns did not have adequate source documentation to support the amount of funds drawn down. Questioned Costs: None. Context: Eight of ten drawdowns tested for the Research and Development and nine out of nine drawdowns tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. Cause and Effect: Internal controls were not designed and implemented to ensure appropriate cash management requirements are met. NTU did not comply with the cash management requirements of the Research and Development Cluster and Tribally Controlled Postsecondary Career and Technical Institutions program. Auditor’s Recommendation: Established policies and procedures should be enforced to ensure compliance with federal cash management requirements and NTU’s policies and procedures. Management’s Response: NTU will enforce policies and procedures for cash drawdowns to ensure all drawdowns are properly supported. Additionally, an electronic filing system will be developed to maintain all drawdowns and the related backup documentation, enhancing the processing and record-keeping of drawdown documents. Responsible Party: Beverly Miller, Accounting Manager and Harshwal & Company, LLC Anticipated Completion: July 2024

2023-013 – Reporting Federal Program Information: Funding Agency: U.S. Department of Education Title: Tribally Controlled Postsecondary Career and Technical Institutions, Higher Education Emergency Relief Fund (HEERF), Indian Post Secondary Schools Assistance Listing Number: 84.245 and 84.425 Award Period: June 1, 2022 – May 31, 2023 Criteria: Internal controls must be in place to ensure performance and financial reporting requirements for federal award programs are met Condition: During our assessment of reporting requirements, we found the following: Tribally Controlled Postsecondary Career and Technical Institutions – • The annual performance report for the Tribally Controlled Postsecondary Career and Technical Institutions was not available for review at the time of fieldwork. Higher Education Emergency Relief Fund (HERF) – • The annual performance for HEERF was not available for review at the time of fieldwork. Indian Post Secondary Schools – • Two of two quarterly SF-425 were not available for our review at the time of fieldwork. Questioned Costs: None Context: One of one annual performance report required for the Tribally Controlled Postsecondary Career and Technical Institutions, one of one annual performance reports required by the HEERF program, two of four quarterly SF-425 reports required by the Indian Post Secondary Schools. Cause and Effect: Internal controls were not designed and implemented to ensure reporting requirements were met. NTU did not comply with OMB Uniform Guidance related to reporting for these programs. Auditors’ Recommendation: Establish formal reporting procedures to ensure compliance with federal reporting requirements. Management’s Response: Formal policies and procedures for grants reporting will be developed by NTU. NTU is developing a master file that will have a detailed schedules by funding source which will identify the reporting requirements and deadlines for submission. Communication of reporting due dates to appropriate NTU financial and programmatic personnel will be improved. This will help ensure all financial and administrative reports are submitted in a timely manner. Responsible Party: Beverly Miller, Accounting Manager and Harshwal & Company, LLC Anticipated Completion: July 2024

2023-014 – Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2022 – May 31, 2023 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2023. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2023. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors’ Recommendation: NTU should improve internal controls to help ensure that general ledger balances are accurately reconciled and closed out shortly after year-end to help ensure the timely preparation and submission of the annual federal reporting package. Management’s Response: NTU experienced key personal turnover during which affected the start and completion of the audit. NTU has developed a comprehensive year-end financial close and annual federal reporting plan as part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor. Responsible Party: Beverly Miller, Accounting Manager and Harshwal & Company, LLC Anticipated Completion: July 2024

2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.

2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.

2022-009 ? Cash Management Federal Program Information: Funding Agency: U.S. Department of Education Title: Tribally Controlled Postsecondary Career and Technical Institutions Assistance Listing Number: 84.245 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Internal controls must be in place to demonstrate that the time between the transfer of funds from the federal entity to the non-federal entity and disbursement by the non-federal entity has been adequately minimized. This includes ensuring reimbursement and drawdown requests are adequately supported by underlying source documentation. Condition: During our evaluation of cash drawdowns, two out of four drawdowns tested did not have adequate source documentation to support the amount of funds drawn down. Questioned Costs: None. Context: Two of four drawdowns tested for the Tribally Controlled Postsecondary Career and Technical Institutions. Cause and Effect: Internal controls were not designed and implemented to ensure appropriate cash management requirements are met. NTU did not comply with the cash management requirements of the Tribally Controlled Postsecondary Career and Technical Institutions program. Auditor?s Recommendation: Established policies and procedures should be enforced to ensure compliance with federal cash management requirements and NTU?s policies and procedures. Management?s Response: NTU has developed cash management policies and procedures under NTU?s Sponsored Projects Manual. NTU will be enforcing policies and procedures for cash drawdowns to ensure all drawdowns are adequately supported. This will be managed by the new incoming Grants Accountant and Contract and Grants Manager that will be hired in the upcoming fiscal year.

2022-010 ? Special Tests and Provisions (Return of Title IV Funds) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs. Condition: During our evaluation of Return of Title IV funds, we noted the following: ? No funds were remitted back to the Department of Education related to the Title IV programs. Subsequent analysis by NTU determined that approximately $14,562 was due back to Title IV programs for fiscal year 2022. ? Ten students tested appeared to unofficially withdraw from classes and an R2T4 calculation was not performed. ? Two students tested formally withdrew from classes and an R2T4 calculation was not performed. Questioned Costs: None. Context: Twenty-five students that received Title IV student financial aid and did not earn any credits in one of the semesters in fiscal year 2022. Cause and Effect: NTU did not have effective internal controls to ensure return to Title IV funds were performed in accordance with federal requirements. Auditor?s Recommendation: Establish formal procedures to ensure compliance with federal student aid requirements. These policies and procedures should address students that withdraw from classes without notifying NTU. Consider performing student file audits to ensure Return of Title IV calculations are performed. Lastly, consider increasing coordination efforts between the finance department and the student financial aid department to ensure amounts due back to Title IV programs are determined and remitted timely. Management?s Response: NTU will develop formal policies and procedures regarding Return of Title IV Funds. The procedures will be in alignment with the requirements of the U.S. Department of Education. The procedures will address student withdrawals and the data required to be entered and monitored in the student data information system. The Accounting Manager within the Student Accounts section of the NTU Business Office will review all student enrollment transactions to ensure Return to Title IV requirements are complied with.

2022-011 ? Special Tests and Provisions (Enrollment Reporting) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Institutions are required to report enrollment information under the Pell grant via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. Condition: During our evaluation of NSLDS enrollment reporting, we noted the following: ? Ten students with an enrollment status change did not have their record updated in the NSLDS database. ? Two students with an enrollment status change did not have their record updated in the NSLDS database within 60 days of the change. ? Nine students did not have a record in the NSLDS database. Questioned Costs: None. Context: Twenty-one out of twenty-five students that had an enrollment status change in fiscal year 2022. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with enrollment reporting requirements of the Student Financial Aid Cluster. 34 CFR 690.83(c) states, ?In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the (reporting) requirements specified?. There is a risk that NTU could face a potential fine if the required information is not being reported. Auditors? Recommendation: Develop and implement internal controls to ensure the enrollment reporting requirements of the Student Financial Aid Cluster are met. Management?s Response: NTU will develop formal policies and procedures regarding enrollment reporting. This will include identifying the necessary enrollment data to update the National Student Loan Database System (NSLDS) on a timely basis in accordance with the Student Financial Aid Cluster requirements. NTU has been negatively affected by staffing issues partly attributable to the COVID-19 pandemic. NTU will be hiring an additional Financial Aid Technician and a Financial Aid Counselor to assist in addressing this finding.

2022-012 ? Special Tests and Provisions (Gramm-Leach-Bliley Act ? Student Information Security) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Title IV-eligible institutions are subject to the Gramm-Leach-Bliley Act (the ?Act?). The Act requires institutions to perform the following: ? Develop, implement, and maintain a written information security program. ? Designate the employee(s) responsible for coordinating the information security program. ? Identify and assess risks to customer information. ? Design and implement an information safeguards program Condition: We found that NTU has developed an information security plan, however this plan has not been formally adopted and implemented by NTU. Questioned Costs: None. Context: Evaluation of NTU?s information security protocols as it relates to the Gramm-Leach-Bliley Act requirements of the Student Financial Aid Cluster. Cause and Effect: NTU has not formally adopted and implemented an information security plan that addresses the requirements of the Gramm-Leach-Bliley Act. NTU did not comply with OMB Uniform Guidance related to special tests and provisions for the Student Financial Aid Cluster. Auditor?s Recommendation: Formally adopt and implement an information security plan that adequately addresses the requirements of the Student Financial Assistance Cluster. Management?s Response: NTU is currently working on policies and procedures and a comprehensive information security plan to address student information security. NTU is working closely with U.S. Federal Student Aid office (FSA) to ensure all required elements are incorporated into NTU?s information security plan. A draft policy been provided to the FSA_IHE Cyber Compliance group for review, once the review is completed, the policies and procedures along with the student information security plan will be presented to NTU Board of Regents for ratification and adoption.

2022-013 ? Reporting Federal Program Information: Funding Agency: U.S. Department of Education Title: Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Internal controls must be in place to ensure performance and financial reporting requirements for federal award programs are met Condition: During our assessment of reporting requirements, we found the following: ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) for the quarter ending December 31, 2021 was not completed. ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) and Student Aid Portion (84.425E) for the quarters ending December 31, 2021 and March 31, 2022 were not posted on NTU?s website as required. Questioned Costs: None Context: Four out of four quarterly budget and expenditures reports required by the HEERF program. Cause and Effect: Internal controls were not designed and implemented to ensure HEERF reporting requirements were met. NTU did not comply with OMB Uniform Guidance related to reporting for the HEERF program. Auditors? Recommendation: Establish formal reporting procedures to ensure compliance with federal reporting requirements. Management?s Response: Formal policies and procedures for grants reporting will be developed by NTU. Detailed schedules by funding source will be prepared that identifies the reporting requirements and deadlines for submission. Communication of reporting due dates to appropriate NTU financial and programmatic personnel will be improved. This will help ensure all financial and administrative reports are submitted in a timely manner.

2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.

2021-003 ? Cash Management Federal program information: Funding agency: U.S. Department of Education Title: Tribally Controlled Postsecondary Career and Technical Institutions, Higher Education Institutional Aid, and Student Financial Aid Cluster ALN: 84.007, 84.031T, 84.031D, 84.033, 84.063, 84.245A Award period: June 1, 2020 ? May 31, 2021 Criteria: Internal controls must be in place demonstrate that the time between the transfer of funds from the federal entity to the non-federal entity and disbursement by the non-federal entity has been adequately minimized. This includes ensuring reimbursement and drawdown requests are adequately supported by underlying source documentation. Condition: During our evaluation of cash drawdowns, we found the following: ? Three drawdowns that did not have underlying documentation to support the calculation for the amount of the drawdown requested for the Tribally Controlled Postsecondary Career and Technical Institutions program. ? Three drawdowns that did not have underlying documentation to support the calculation for the amount of the drawdown requested for the Higher Education Institutional Aid program. ? Excess cash totaling $123,696 was drawn and unspent for the Student Financial Aid Cluster. These funds were returned to U.S. Department of Education as required. Questioned Costs: None. Context: Three of three drawdowns tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. Three of three drawdowns tested for the Higher Education Institutional Aid program. Twenty-three drawdowns tested for the Student Financial Aid Cluster. Cause and Effect: Internal controls were not designed and implemented to ensure appropriate cash management requirements are met. NTU did not comply with OMB Uniform Guidance regarding cash management for these programs. Auditors? Recommendation: Established policies and procedures should be enforced to ensure compliance with federal cash management requirements and NTU?s policies and procedures. Management?s Response: A procedure for draws will be developed to be implemented by NTU. All documentation will be mandatory for each grant expenditure to support all draws. An evaluation of the entire grant process will be conducted to ensure the accuracy of each draw made by the financial services department to also ensure the matching principle is applied.

2021-004 ? Reporting Federal program information: Funding agency: U.S. Departments of Interior and Education Title: Indian Post-Secondary Schools, Higher Educational Institutional Aid, and Higher Education Emergency Relief Fund ALN: 15.058, 84.031D, 84.031T, 84.425E, and 84.425K Award period: June 1, 2020 ? May 31, 2021 Criteria: Internal controls must be in place to ensure performance and financial reporting requirements for federal award programs are met. Condition: During our assessment of reporting requirements, we found the following: ? Two annual performance reports were submitted ninety-nine days late for the Higher Education Institutional Aid program. ? Two quarterly financial reports were submitted late for the Indian Post-Secondary Schools Aid program. The reports ranged from 182 days to 271 days late. ? Quarterly budget and expenditure reporting for the quarter ending March 31, 2021 was not posted on NTU?s website as required by the Higher Education Emergency Relief Fund. Questioned Costs: None. Context: Two of two annual performance reports tested for the Higher Education Institutional Aid program. Two of two quarterly financial reports tested for the Indian Post-Secondary Schools program. One quarterly budget and expenditure report for the Higher Education Emergency Relief Fund program. Cause and Effect: Internal controls were not designed and implemented to ensure federal reporting requirements were met. NTU did not comply with OMB Uniform Guidance related to reporting for these programs. Auditors? Recommendation: Establish formal reporting procedures to ensure compliance with federal reporting requirements. Management?s Response: A procedure for grants reporting will be developed by NTU. All funding sources will be identified, and timelines will be identified by the grantor to ensure all financial and administrative reports are submitted timely. Implementation will include communication of report due dates.

2021-005 ? Period of Performance Federal program information: Funding agency: U.S. Department of Education Title: Higher Education Emergency Relief Fund ALN: 84.425E and 84.425K Award period: June 1, 2020 ? May 31, 2021 Criteria: Internal controls must be in place to ensure funds are expended within the period of performance. Condition: During our evaluation of expenditures charged to the Higher Education Emergency Relief Fund, we found the purchase of internet and communication services in the amount of $251,410 that were outside of the period of performance. NTU subsequently reduced expenditures charged to the Higher Education Emergency Relief Fund for these services and charged them to unrestricted funding sources. Questioned Costs: None, an adjusting journal entry was made to move the monies out of this fund. Context: Three of twenty-six expenditure transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: Internal controls were not designed and implemented to ensure funds were expended within the period of performance. NTU did not comply with the period of performance requirements for the Higher Education Emergency Relief Fund program. Auditors? Recommendation: Establish formal policies and procedures to ensure compliance with period of performance requirements. Management?s Response: The Finance Director will establish a procedure by December 31, 2022 to evaluate all grants and the designated period of performance. Transactions that are prepaid will be amortized to the correct general ledger accounts.

2021-006 ? Special Tests and Provisions (Return of Title IV Funds) Federal program information: Funding agency: U.S. Department of Education Title: Student Financial Aid Cluster ALN: 84.007, 84.033, 84.063 Award period: June 1, 2020 ? May 31, 2021 Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs. Condition: During our evaluation of Return to Title IV funds, we noted the following: ? Twenty-three students did not have documentation on file to support that a calculation was performed to determine the amount of aid earned. ? One student had a Return to Title IV calculation performed; however, the incorrect student withdrawal date was used. This resulted in an incorrect calculation. ? No funds were remitted back to U.S. Department of Education related to Pell Grant Return to Title IV. Subsequent analysis by NTU determined that approximately $12,027 was due back to Title IV programs for fiscal year 2021. Questioned Costs: None. Context: Twenty-five student files tested. Cause and Effect: Internal controls have not been designed and implemented to ensure Return to Title IV calculations are performed accurately, timely and amounts due back to Title IV programs are remitted. NTU did not comply with OMB Uniform Guidance related to Return of Title IV Funds for these programs. Auditors? Recommendation: Establish formal procedures to ensure compliance with federal student aid requirements. Consider performing student file audits to ensure Return of Title IV calculations are performed. Also, consider increasing coordination efforts between the finance department and the student financial aid department to ensure amounts due back to Title IV programs are determined and remitted timely. Management?s Response: The Financial Aid Director will work with the Registrar?s and Business Office to ensure all Return of Title IV funds are processed accurately and timely back to the Department of Education. An internal procedure will be developed by the Enrollment Director and in coordination with all departments impacted by Title IV.

2021-007 ? Verification Federal program information: Funding agency: U.S. Department of Education Title: Student Financial Aid Cluster ALN: 84.007, 84.033, 84.063 Award period: June 1, 2020 ? May 31, 2021 Criteria: Institutions must establish and use written policies and procedures for verifying an applicant?s Free Application for Federal Student Aid (FAFSA) information. Condition: During our procedures over verification, we noted the following: ? Ten student files could not be provided for testing. ? Fifteen student files lacked supporting documentation demonstrating conflicting information was verified by NTU. ? One student file had an incomplete verification worksheet. ? Forty student files did not have documentation to support that the student?s verification status was coded correctly in the Common Origination and Disbursement System. Questioned Costs: None. Context: Forty student files flagged by the U.S. Department of Education for verification. Cause and Effect: Internal controls have not been designed and implemented to ensure verification requirements of the Student Financial Aid Cluster are met. NTU did not comply with OMB Uniform Guidance related to verification for these programs. Auditors? Recommendation: Establish policies and procedures to ensure student information is verified in accordance with federal requirements. Management?s Response: The current process for verification under NTU?s financial aid office is to collect, review and perform verification for students selected by the U.S. Department of Education. The financial aid assistants will work with the students to complete verification worksheets, collect tax return transcripts or tax returns, all W-2s, and/or non-filing statements. Verification could be complicated and difficult. There are two third-party verification tools that could benefit the financial aid office: Net Partner and PowerFAIDS - IDOC. This type of software is used to review files for consistency and is part of the financial aid process. A procedure will be developed by the Financial Aid Director and will be implemented by December 31, 2022.

2021-008 ? Special Tests and Provisions (Gramm-Leach-Bliley Act ? Student Information Security) Federal program information: Funding agency: U.S. Department of Education Title: Student Financial Aid Cluster ALN: 84.007, 84.033, 84.063 Award period: June 1, 2020 ? May 31, 2021 Criteria: Title IV-eligible institutions are subject to the Gramm-Leach-Bliley Act (the ?Act?). The Act requires institutions to perform the following: ? Develop, implement, and maintain a written information security program ? Designate the employee(s) responsible for coordinating the information security program ? Identify and assess risks to customer information ? Design and implement an information safeguards program Condition: During our inquiries with NTU management, we noted the following: ? There is no designated individual responsible for coordinating the information security program. ? No risk assessment has been performed over student information security. ? No safeguards have been put in place over the risks identified related to student information security. Questioned Costs: None. Context: Evaluation of NTU?s information security protocols as it relates to the Gramm-Leach-Bliley Act requirements of the Student Financial Aid Cluster. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with the Gramm-Leach-Bliley Act. NTU did not comply with OMB Uniform Guidance related to special tests and provisions for these programs. Auditors? Recommendation: Design and implement internal controls that ensure adequate information security protocols are in place to help ensure compliance with the Gramm-Leach-Bliley Act. Internal controls should designate an individual to lead the information security program, perform a risk assessment related to student information security, and develop safeguards for risks identified. Management?s Response: NTU?s information technology (IT) office will commit to developing NTU?s information security programs to meet the information security requirements of the Gramm-Leach-Bliley Act and other pertinent information security bodies. The information security policy is a written document explaining the information security posture NTU employs. The rules explain the process and procedures used to protect NTU?s digital data and the computing infrastructure used to create, store, and process all NTU data sets.

2021-009 ? Special Tests and Provisions (Enrollment Reporting) Federal program information: Funding agency: U.S. Department of Education Title: Student Financial Aid Cluster ALN: 84.007, 84.033, 84.063 Award period: June 1, 2020 ? May 31, 2021 Criteria: Institutions are required to report enrollment information under the Pell grant via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. Condition: NTU was unable to provide evidence or documentation that the required enrollment reporting was performed for fiscal year 2021. Questioned Costs: None. Context: Evaluation of NTU?s NSLDS enrollment reporting protocols. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with enrollment reporting requirements of the Student Financial Aid Cluster. 34 CFR 690.83(c) states, ?In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the (reporting) requirements specified?. There is a risk that NTU could face a potential fine if the required information is not being reported. Auditors? Recommendation: Develop and implement internal controls to ensure the enrollment reporting requirements of the Student Financial Aid Cluster are met. Management?s Response: NTU utilizes the National Student Clearinghouse to submit enrollment records. Part of the enrollment reporting satisfies the requirement for NSLDS quarterly reporting. Enrollment reporting includes several items. The Information Technology Technician will be the contact person for enrollment reporting. This function will be transferred to Institutional Reporting and they will provide enrollment Reporting on behalf of NTU. NTU will improve the reporting requirements of the Student Financial Aid Cluster with the assistance of the Financial Aid Director.

2021-010 ? Schedule of Expenditures of Federal Awards Federal program information: Funding agency: All major program funding agencies Title: All major programs ALN: All major program ALN numbers Award period: All major program award periods Criteria: 2 CFR section 200.510 (b), requires NTU to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by NTU?s financial statements and the SEFA must include the total federal awards expended as determined in accordance with ?200.502. Condition: NTU did not properly identify the Assistance Listing Number (ALN) and amounts received as a subrecipient under the Coronavirus Relief Fund. Questioned Costs: None. Context: The Coronavirus Relief Fund did not have an accurate ALN and was not properly identified as a pass-through from the Navajo Nation. Cause and Effect: Internal controls were not designed and implemented to ensure accurate preparation of the SEFA. Revisions were needed to accurately prepare the SEFA by ALN and to ensure federal programs were properly reported. Without proper internal controls there is the risk that errors and misstatements could exist and not be prevented or detected and corrected on a timely basis. Auditors? Recommendation: Internal control procedures should be established to ensure that an accurate SEFA is prepared in accordance with ?200.502. The SEFA should be reviewed by someone independent from the preparer to verify the accuracy of the information. Management?s Response: The Finance Director will develop internal control procedures and a Schedule of Expenditures of Federal Awards (SEFA) model to ensure the annual SEFA is accurate and timely by December 31, 2022. The Grants Accountant will assist in the compilation of the overall schedule annually.

2020-05 ? Allowable Activities and Allowable CostsFederal program information:Funding agency: National Science Foundation, U.S. Department of EducationTitle: Research and Development Cluster; and Tribally Controlled Postsecondary Career and Technical InstitutionsCFDA number: 47.049, 47.070, 47.075, 47.076 and 84.245Award period: June 1, 2019 ? May 31, 2020Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented.Condition: We found the following in our review of expenditures:Research and Development Cluster ?? Two instances where participants were reimbursed at the incorrect mileage rate per NTU?s policies and procedures.? One payroll transaction, totaling $1,000, that was charged to the incorrect research and development program.? One instance where an employee was paid the incorrect pay rate.Tribally Controlled and Postsecondary Career and Technical Institutions ?? One instance where an employee was paid the incorrect pay rate.Questioned Costs: None greater than $25,000.Context: Five of twenty-five transactions tested for the Research and Development Cluster. One of twenty-five transactions tested for Tribally Controlled Postsecondary Career and Technical Institutions.Cause and Effect: Internal controls were not in place to ensure payroll transactions were accurately recorded with regard to rates paid to employees and the amounts charged to grants. Additionally, internal controls were not in place to ensure participants were reimbursed for travel in accordance with NTU policies and procedures. NTU did not comply with its policies and procedures and OMB Uniform Guidance cost principles.Auditors? Recommendation: Established policies and procedures should be enforced to ensure compliance with federal requirements and NTU?s policies and procedures.Management?s Response: NTU will develop a written procedure for the human resources department and payroll office to ensure all payroll related transactions are recorded accurately. The Human Resources Director will be responsible for ensuring the accuracy of rates paid to employees and a report will be generated on a quarterly basis for review and to ensure controls are in order.This will be handled by the Vice President of Operations, Finance Director and Human Resources Director and will be implemented by October 1, 2021.

2020-006 ? Cash ManagementFederal program information:Funding agency: All major programsTitle: All major programsCFDA number: All major programsAward period: June 1, 2019 ? May 31, 2020Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Additionally, advanced funds should be deposited and maintained in insured or collateralized accounts. Alternatively, they should be invested in accounts backed by the federal government.Condition: There is not sufficient cash and cash equivalent balances to cover all unearned grant revenue balances associated with federal and nonfederal funds received from funding agencies. NTU?s unearned grant revenue balance exceeded the amount of available cash by $3,069,724. Additionally, NTU did not maintain adequate insurance or collateral on bank balances.Questioned Costs: None.Context: As of May 31, 2020, the unearned grant revenue balance associated with federal and nonfederal funds was $7,129,850. NTU had $4,060,126 of unrestricted cash available at year-end. Additionally, NTU did not maintain adequate insurance or collateral on bank balances involving unspent advanced payments under federal awards. $4,677,514 of NTU?s unrestricted bank balances were uninsured and uncollateralized.Cause and Effect: In current and prior years, NTU has expended advanced program funds to cover deficits in other programs. In addition, timely collections and drawdowns have not been performed for NTU?s receivable balances to improve the cash situation. As a result, NTU did not comply with Uniform Guidance cash management requirements.Auditors? Recommendation: Develop policies and procedures for cash management requirements related to advanced federal and nonfederal monies. Additional unrestricted monies should be generated to cover the current shortfall. In addition, ensure reimbursement grants are drawn down timely and other receivables are collected timely. Lastly, ensure NTU?s cash balances are either insured, collateralized or invested in securities backed by the federal government.Management?s Response: NTU will work with Bank of America to insure its cash accounts in order to meet the requirements set forth by 2 CFR 200.305 entitled ?Federal Payment?. The Finance Director and Vice President of Operations will implement this by October 31, 2021.

2020-007 ? Equipment and Real Property ManagementFederal program information:Funding agency: National Science FoundationTitle: Research and Development ClusterCFDA number: 47.049, 47.070, 47.075, 47.076Award period: June 1, 2019 ? May 31, 2020Criteria: Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-federal entity for financial statement purposes or $5,000 (2 CFR section 200.33). Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)).Condition: During our testwork over Research and Development expenditures we found a transaction totaling $11,480 for the purchase of a software module required for a CT scanner. This software purchase should have been added to NTU?s property and equipment listing.Questioned Costs: None.Context: One of twenty-five transactions tested for the Research and Development Cluster.Cause and Effect: Internal controls were not in place to ensure NTU?s equipment policies and procedures were followed. NTU did not comply with its policies and procedures and OMB Uniform Guidance concerning equipment and real property management.Auditors? Recommendation: Established policies and procedures should be enforced to ensure compliance with federal requirements and NTU?s policies and procedures.Management?s Response: NTU will develop policies and procedures for its property, plant and equipment. Annual inventory counts will be performed and compared to the asset class listing per assignments in the general ledger and fixed asset module. The fixed asset module will be used to track all NTU assets. Each asset will be tagged and recorded by acquisition date and cost. Assets will be segregated by grant-funded assets and general fund assets. This will be implemented by March 31, 2022 by Harshwal & Company, LLC, the Accounting Manager and Property Technician.

2020-008 ? Cash ManagementFederal program information:Funding agency: U.S. Department of EducationTitle: Tribally Controlled Postsecondary Career and Technical InstitutionsCFDA number: 84.245Award period: June 1, 2019 ? May 31, 2020Criteria: Internal controls must be in place demonstrate that the time between the transfer of funds from the federal entity to the non-federal entity and disbursement by the non-federal entity has been adequately minimized.Condition: During our testwork over cash drawdowns performed for the Tribally Controlled Postsecondary Career and Technical Institutions, we found four drawdowns that did not have underlying documentation to support the calculation for the amount of the drawdown requested.Questioned Costs: None.Context: Four of fourteen drawdowns tested for Tribally Controlled Postsecondary Career and Technical Institutions.Cause and Effect: Formal policies and procedures were not in place to ensure appropriate cash management requirements are met. NTU did not comply with OMB Uniform Guidance regarding cash management.Auditors? Recommendation: Establish formal cash management policies and procedures to ensure compliance with federal cash management requirements.Management?s Response: A procedure for draws will be developed and implemented by NTU. All documentation will be mandatory for each grant expenditure to support all draws. An evaluation of the entire grant process will be conducted to ensure the accuracy of each draw made by the financial services department to also ensure the matching principle is applied. This will be implemented fully by November 15, 2021 and will be assigned to Harshwal and Company, LLC, the Accounting Manager and the Grants Accountant.

2020-009 ? ReportingFederal program information:Funding agency: U.S. Department of EducationTitle: Higher Education Institutional AidCFDA number: 84.031Award period: June 1, 2019 ? May 31, 2020Criteria: Internal controls must be in place to ensure performance reporting requirements for federal award programs are met.Condition: During our assessment of the reports completed for the Higher Education Institutional Aid program, we found two annual performance reports were submitted sixty-six days late.Questioned Costs: None.Context: Two of two annual performance reports tested for Higher Education Institutional Aid.Cause and Effect: Formal procedures were not in place to ensure federal performance reporting requirements were met. NTU did not comply with OMB Uniform Guidance related to reporting.Auditors? Recommendation: Establish formal reporting procedures to ensure compliance with federal reporting requirements.Management?s Response: A procedure for grants reporting will be developed by NTU. All funding sources will be identified and timelines will be identified by the grantor to ensure all financial and administrative reports are submitted timely. Implementation will include communication of report due dates.This will be implemented by September 30, 2021 and will be assigned to Harshwal and Company, LLC, the Accounting Manager and the Grants Accountant.

Finding number: 2019-006 Federal agency: National Science Foundation Program name: Education and Human Resources, Research and Development Cluster Federal assistance listing (formerly CFDA) number and program expenditures: 47.076, 47.049 ($967,740) Grant numbers: 1052011, 1461546, 1539139, 1563906, 1840138 and 1828012 Fiscal program award years ended: September 30, 2018, September 30, 2020, May 31, 2019, September 30, 2019, September 30, 2023 and August 31, 2021 Compliance requirement: Cash Management Type of finding: Material Noncompliance and Material Weakness in Internal Control Repeat finding: This is not a repeat finding Questioned costs: Not Determinable Responsible party: Grants Management Department, the Office of the Controller Condition Of the 3 drawdowns selected for testing, the University was unable to provide supporting documentation (i.e. request for reimbursement worksheet, expenditure detail, drawdown approval form, etc.) to verify that management had reviewed expenditure detail to confirm amount and authorize the request prior to the drawdown. Criteria In accordance with the Uniform Guidance Compliance Supplement, Non-Federal entities other than States, ??program costs must be paid by non-Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity.? Effect Lack of internal controls to ensure the program is complying with cash management requirements could result in unauthorized or incorrect drawdowns. Questioned costs are not determinable as we were unable to determine if the drawdown was for actual expenditures incurred prior to the drawdown request. Cause Management did not maintain cash and expenditure detail along with documentation of management review and approval prior to submission of the request for federal reimbursement. Auditors? Recommendation We recommend that NTU management implement or refine a procedure to assure proper supporting documentation including documentation of review and approval for all cash reimbursement request transactions is maintained in the files. This documentation should support the amount being requested, support how these funds were previously expended prior to request for reimbursement and should reconcile to the expenditures reported in the general ledger accounting system and the schedule of expenditures of federal awards. Corrective Action Plan A procedure for draws will be developed to be implemented by the University. All documentation will be mandatory for each grant expenditure to support all draws. An evaluation of the entire grant process will be conducted to ensure the accuracy of each draw made by financial services department to also ensure the matching principle is applied. This will be implemented by January 31, 2021 and will be assigned to Accounting Manager and Grants Accountant.

Finding number: 2019-007 Federal agency: National Science Foundation Program name: Education and Human Resources, Research and Development Cluster Federal assistance listing (formerly CFDA) number and program expenditures: 47.076, 47.049 ($967,740) Grant numbers: 1052011, 1461546, 1539139, 1563906, 1840138 and 1828012 Fiscal program award years ended: September 30, 2018, September 30, 2020, May 31, 2019, September 30, 2019, September 30, 2023 and August 31, 2021 Compliance requirement: Equipment and Real Property Management Type of finding: Material Noncompliance and Material Weakness in Internal Control Repeat finding: This is not a repeat finding Questioned costs: None Responsible party: General Services and the Office of the Controller (Fixed Assets Department and Property Management Department) Condition The University was unable to provide a comprehensive list of equipment by fund which was reconciled to a physical inventory taken in the past two years. Therefore, we were unable to confirm equipment purchased for the NSF program and whether a complete physical inventory was taken. Furthermore, we were unable to determine federal equipment charged to the NSF program in prior years for the purpose of testing safeguarding and maintenance. Criteria In accordance with OMB Circular A-102 and 2 CFR 200.313(c) through (e), ?an appropriate control system should be in place to safeguard and adequately maintain equipment. Equipment records shall be maintained accurately and shall include the description of the equipment, serial number or tag number, source of the equipment, acquisition date, and cost. In addition, the University is required to have internal controls in place to mitigate risk of noncompliance.?Per OMB Circular A-102 and the Uniform Guidance 2 CFR Section 200.313(d), ?a physical inventory of equipment shall be taken once every two years and be reconciled to the equipment records.? Effect The University may not be properly recording and monitoring equipment purchased with federal funds and equipment may not be adequately safeguarded and maintained. Questioned costs are not applicable to the finding as the equipment purchased is allowable under the grant. The total gross book value of equipment as of September 30, 2019 for the NSF program (Assistance Listing formerly CFDA 47.076) program was indeterminable. Cause The University has not implemented and/or followed the established practice and procedures as of fiscal year-end that address equipment management of federal purchased assets in regard to accurately recording and maintaining the inventory records. Auditors? Recommendation The University must confirm that property records are reconciled and updated to the physical inventory taken at least once every two years. Property records at a minimum should include a description of the equipment, serial number or tag number, source of the equipment, acquisition date, and cost. The University should assure that there are sufficient resources to ensure that federally purchased equipment is monitored effectively and inventoried. In addition, equipment should be inspected periodically to ensure the asset tag is intact, and the equipment is safeguarded and maintained. Corrective Action Plan The current Property, Plant and Equipment process will be reevaluated to ensure that the University will be recording all assets over $5,000 in accordance to the policies set forth for capitalization. Annual inventory counts will be implemented and compared to the asset class listing per assignments in the general ledger and fixed asset module. Each asset will be tagged and recorded by acquisition date and cost. Assets will be segregated by grant funded assets versus general fund assets. This will be implemented by June 30, 2021 and will be assigned to Accounting Manager and Finance Director.

Finding number: 2019-008 Federal agency: National Science Foundation Program name: Education and Human Resources, Research and Development Cluster Federal assistance listing (formerly CFDA) number and program expenditures: 47.076, 47.049 ($967,740) Grant numbers: 1052011, 1461546, 1539139, 1563906, 1840138 and 1828012 Fiscal program award years ended: September 30, 2018, September 30, 2020, May 31, 2019, September 30, 2019, September 30, 2023 and August 31, 2021 Compliance requirement: Procurement, Suspension and Debarment Type of finding: Material Noncompliance and Material Weakness in Internal Control Repeat finding: This is not a repeat finding Questioned costs: None Responsible party: Grants Management Department the Office of the Controller Condition Of the 4 purchase orders greater than $5,000 (dollar threshold for implementing procurement procedures) selected for testwork, 1 did not include evidence of a full and open competition, public advertisement or cost vs. price analysis. Furthermore, the University was unable to provide supporting documentation for the use of a ?sole source?, noncompetitive proposal. Criteria In accordance with 2 CFR 200.318(i), ?The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.? 2 CFR 200.319(a) states, ?All procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section.? Furthermore, 2 CFR 200.320(f) states, ?Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply: (1) The item is available only from a single source; (2) The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation; (3) The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity; or (4) After solicitation of a number of sources, competition is determined inadequate. Effect The University is not properly documenting the history of procurements, may be limiting the competition for bids without obtaining proper justification or federal agency approval, and is not properly maintaining complete and accurate procurement records. Questioned costs are not applicable to the finding as the costs related to the contract in question are allowable under the grant. Cause The University did not follow the established formal procurement policies and procedures for federal awards and did not maintain appropriate records. Auditors? Recommendation The University must reaffirm and promote strict adherence to established procurement policies and procedures to ensure that all procurement transactions have written records that are maintained and include the rationale of the method of procurement, a copy of the contract, summary of all bids or proposals submitted, and the basis for the contract price. The procurement policy must be adhered to so all procurement transactions are provided full and open competition, and all documents are properly maintained. All procurement documents should be reviewed by management prior to purchase to ensure information maintained is in accordance with federal procurement regulations and policies and vendor files are maintained for easy retrieval of information. Corrective Action Plan The University?s procurement process will be revamped to ensure that all requisitions acquiring goods and services follow established purchasing guidelines. A file management system will be implemented to record and store all procured goods and contract services. For contracts, the University will be acquiring contract management software to be used to track and monitor all services contracts. This will be implemented by March 31, 2021 and assigned to the Procurement Coordinator and Finance Director.