ST. JOHNS UNIFIED SCHOOL DISTRICT NO. 1Local Government

SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS 2022-002 Allowable and Unallowable Costs Program: Education Stabilization Fund CFDA Number: 84.425D and 84.425U Federal Agency: U.S. Department of Education Pass-Through Agency: Arizona Department of Education Type of Finding: Noncompliance, material weakness in internal control Compliance Requirement: A. Allowable and Unallowable Costs Condition/Context: The District did not maintain documentation to support retention stipends and other monies paid to employees during the current year. Payroll vouchers were approved to support the amounts paid to employees but no other time and effort documentation was maintained. Criteria: Uniform Grant Guidance requires that time and effort documentation is maintained to support the distribution of employee compensation from federal grants. Cause: The District did not have proper internal controls in place to ensure all grant funding was properly supported by time and effort documentation or contracts that detailed out the amounts to be paid to each employee. Effect: Noncompliance and internal control weakness. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District establish internal control procedures that ensure time and effort and contracts, stipend forms, or timesheets are maintained to support the individual payments made to employees with grant funds. These forms should also be reviewed and approved by an appropriate District administrator. Views of Responsible Officials: The District concurs with this recommendation and will ensure that documentation is maintained to support all federal grant funding in future periods. Contact Person: Ginger Wiltbank, Finance Director.

Program: Child Nutrition Cluster CFDA Number: 10.553, 10.555, and 10.559 Federal Agency: U.S Department of Education Pass-Through Agency: Arizona Department of Education Grantor Number: 7AZ300AZ3 Questioned Costs: $-0- Type of Finding: Noncompliance, significant deficiency Compliance Requirement: I. Procurement, suspension, and debarment Condition/Context: The District did not maintain procurement documentation to support that bidding procedures were performed on two of 2 purchases tested requiring procurement. Additionally, the District did not obtain suspension and debarment certifications for one of 2 vendors and made purchases from that vendor totaling more than $25,000 using food service funds. Criteria: Uniform Grant Guidance requires all purchases over $10,000 to go through competitive purchasing procedures. Additionally, Uniform Grant Guidance requires that when a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity is not suspended or debarred or otherwise excluded. This verification may be accomplished by checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity. "Covered transactions" include those procurement contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other specified criteria. Cause: The District did not have proper internal controls in place to monitor the procurement, suspension, or debarment status of the vendors. Effect: Noncompliance and internal control weakness. The District could inadvertently contract with a vendor that is suspended or debarred from federal contracting or award a vendor that is not advantageous to the District. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District establish proper procurement procedures to ensure all purchases over $10,000 use proper procurement methods. Additionally, the District should develop monitoring procedures to ensure that they obtain suspension and debarment information as required for all purchases over the prescribed limit of $25,000. Views of Responsible Officials: The District concurs with this recommendation and will ensure that a review of the suspension and debarment status is performed prior to purchases and reviewed by an independent individual. Contact Person: Ginger Wiltbank, Finance Director

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