NAA TSIS ANN COMMUNITY SCHOOLTribal Government

SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Finding Number: 2022-004 Repeat Finding: Similar to prior year federal awards finding 2021-003 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: A19AV00866 Questioned Costs: None Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Procurement, Suspension and Debarment Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 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, as defined in 2 CFR ?180.995 and agency adopting regulations, is not suspended, or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity or adding a clause or condition to the covered transaction with that entity (2 CFR ?180.300). Condition/Context: For five of 8 procurements over $25,000 tested, the School did not maintain documentation to support that a current suspension and debarment check was performed. Effect: Noncompliance with grant requirements. Cause: Lack of training, management turnover Recommendation: For procurements over $25,000, the School should implement policies and procedures that ensure suspension and debarment checks are performed annually on required vendors. Response: The School concurs with this recommendation and will implement procedures to ensure compliance with grant requirements. Contact person: Frances Stevens, Business Manager

SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS (CONTINUED) Finding Number: 2022-005 Repeat Finding: Same as prior year financial statement finding 2021-003 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: A19AV00866 Questioned Costs: None Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Equipment and Real Property Management Criteria: Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which includes the requirement that a physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years. Condition/Context: The School did not perform a full physical inventory within the two-year period ending June 30, 2022. Effect: Noncompliance with grant requirements. Cause: Lack of training, management turnover Recommendation: The School should implement policies and procedures that ensure a full physical inventory at least every two fiscal years and the results of the inventory are reconciled with the records in the financial software. Response: The School concurs with this recommendation and will implement procedures to ensure compliance with grant requirements. Contact person: Frances Stevens, Business Manager

Finding Number: 2021-001 Repeat Finding: Yes, 2020-001 Program Names/ Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization 15.042 A20AV00648 N/A Education Stabilization Fund COVID-19 84.425D A20AV00648 N/A Indian Education Facilities, Operations, and Maintenance 15.017 A20AV00648 N/A Federal Agency: U.S. Department of the Interior Pass-Through Agency: Bureau of Indian Affairs Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles CRITERIA School management is responsible for establishing and maintaining internal controls over travel reimbursements, credit card transactions, and disbursements that are adequate to ensure that all financial activities are properly processed and recorded. Further, Indian tribes and tribal organizations, may without the approval of the BIA, expend funds provided under a self-determination contract for purposes identified in 25 USC 450j-1(k), to the extent that the expenditure of the funds is supportive of a contracted program (25 USC 450j-1(k)). These guidelines require internal controls over expenditures of federal monies including the use of requisitions or purchase orders to ensure expenditures comply with federal regulations and guidelines. (25 CFR 39; 25 CFR 45; 25 CFR 900.) Accordingly, the School must ensure that purchase orders are prepared and approved prior to receipt of goods or services. CONDITION Adequate internal controls over accounting of disbursements, travel, and credit card transactions were not in place to ensure that all financial activities were properly processed, recorded, and supported. CAUSE Controls in place did not always operate effectively, or were not followed. There was a lack of training regarding adopted policies and procedures. EFFECT Internal controls over disbursements were not adequate to ensure that all financial activities were properly processed and recorded. The School was not always in compliance with U.S. GAAP, School Policies, or federal regulations and guidelines. CONTEXT During our review of travel reimbursements, we noted for one of two travel reimbursements reviewed, lodging was reimbursed at an amount in excess of the maximum established by the General Services Administration, resulting in an overpayment of $7.50. During our review of credit cards, we noted for one of ten credit card transactions reviewed, the transaction occurred over the internet resulting in card charges before goods were received, and the School did not verify the receipt of the prepaid items. During our review of disbursements, we noted the following: ? For six of 45 disbursements reviewed, it was determined that the PO was reviewed and approved after issuance or receipt of goods/services. ? For one of 45 disbursements reviewed, it was determined that payment was made prior to the receipt of goods or services. For any samples tested, the sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION Stronger internal controls should be implemented over accounting for disbursements to ensure that all financial activities are properly processed and recorded. The School should maintain documentation to support all disbursements and ensure disbursements are allowable. Personnel should obtain additional training as needed. All employees involved in the travel and credit card processes should be trained on the approved policies and procedures. Additionally, the School should ensure they are in compliance with federal regulations and guidelines as put forth in 25 CFR 39; 25 CFR 900 and in 25 USC 450 j-l (k). VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

Finding Number: 2021-002 Repeat Finding: Yes, 2020-004 Program Name/Assistance Listing Title: Indian School Equalization Assistance Listing Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A20AV00866 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Special Tests and Provisions CRITERIA According to the Indian Child Protection and Family Violence Protection Act (25 USC 3201 et seq.), 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 conduct with, or control over, Indian children. In addition, individuals in those positions must meet the required 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 Current and timely character investigations were not retained for all employees. CAUSE Due to small staff size and school shutdowns related to the impact of COVID-19, the School did not always submit requests for character investigations timely. EFFECT The School was not in compliance with the Indian Child Protection and Family Violence Protection Act. CONTEXT During our review of background investigations, we noted the following: ? For one of 23 employee files reviewed, the School did not retain a copy of a federal or Navajo Nation background check. For one of 23 employee files reviewed, the School did not retain a copy of a federal background check. ? For three of 23 employee files reviewed, the School did not conduct a background investigation within a reasonable time of the start of employment. ? For four of 23 employee files reviewed, the School did not retain a copy of renewed Navajo Nation background check that expired within five years. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION Internal controls should be implemented to ensure that all employees have a current background investigation in effect at all times. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

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 15.042 A20AV00648 N/A Administrative Cost Grants for Indian Schools 15.046 A20AV00648 N/A Federal Agency: U.S. Department of the Interior Pass-Through Agency: Bureau of Indian Affairs Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Additionally, Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 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, as defined in 2 CFR ?180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity (2 CFR ?180.300). CONDITION Adequate internal controls over its procurement procedures to ensure compliance with federal regulations and guidelines and School policies were not in place. The School did not establish complete written procurement standards. In addition, the School did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. CAUSE Insufficient staff training to ensure compliance with federal requirements and Board adopted policies and lack of record keeping. EFFECT The School was not in compliance with federal guidelines. CONTEXT During our review of purchasing, we noted the following: ? For three of four procurements over $25,000 reviewed, documentation demonstrating a vendor check for suspension and debarment was not retained. ? For three of four sealed bids were not performed in accordance with School policies. However, these purchases did not rise above the Simplified Acquisition Threshold. ? For one of two vendors reviewed with total expenditures within the Simplified Acquisition threshold, no documentation of quotes was maintained. ? There is no specific policy to ensure vendors are checked for suspension and debarment. ? For one of four sealed proposals reviewed, no documentation was maintained to support that the contract was awarded to the most advantageous vendor. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION Resources should be allocated to train employees to ensure compliance with federal requirements regarding procurement. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2020-001 Repeat Finding: Yes, 2019-001 Program Names/CFDA Titles: CFDA Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization Program 15.042 A19AV00648 $3,973 Administrative Cost Grants for Indian Schools 15.046 A19AV00648 $1,815 Federal Agency: U.S. Department of the Interior Pass-Through Agency: Bureau of Indian Affairs Type of Finding: Noncompliance, Material Weakness Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles CRITERIA School management is responsible for establishing and maintaining internal controls over travel reimbursements, credit card transactions, and disbursements that are adequate to ensure that all financial activities are properly processed and recorded. Further, Indian tribes and tribal organizations, may without the approval of the BIA, expend funds provided under a self-determination contract for purposes identified in 25 USC 450j-1(k), to the extent that the expenditure of the funds is supportive of a contracted program (25 USC 450j-1(k)). These guidelines require internal controls over expenditures of federal monies including the use of requisitions or purchase orders to ensure expenditures comply with federal regulations and guidelines. (25 CFR 39; 25 CFR 45; 25 CFR 900.) Accordingly, the School must ensure that purchase orders are prepared and approved prior to receipt of goods or services. CONDITION Adequate internal controls over accounting of disbursements, travel, and credit card transactions were not in place to ensure that all financial activities were properly processed, recorded, and supported. CAUSE Controls in place did not always operate effectively, or were not followed. There was a lack of training regarding adopted policies and procedures. EFFECT Internal controls over disbursements were not adequate to ensure that all financial activities were properly processed and recorded. The School was not always in compliance with U.S. GAAP, School Policies, or federal regulations and guidelines. FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2020-001 CONTEXT During our review of travel reimbursements, we noted the following: ? For two of 10 travel reimbursements reviewed, supporting documentation for the mileage reimbursement was not retained. ? For two of 10 travel reimbursements reviewed, the supporting documentation retained for the mileage reimbursement did not agree to the amount reimbursed, resulting in a net overpayment of $247.98. ? For one of 10 travel reimbursements reviewed, lodging was reimbursed at an amount in excess of the maximum established by the General Services Administration, resulting in an overpayment of $5. ? For one of 10 travel reimbursements reviewed, a meal reimbursement was made when there was no overnight stay, however, this was not processed as a taxable benefit to the employee. During our review of disbursements, we noted the following: ? For three of 45 disbursements reviewed, the expenditure was not properly supported by a vendor?s invoice. ? For two of 45 disbursements reviewed, it was noted that supporting documentation had not been properly cancelled. ? For 13 of 45 disbursements reviewed, it was determined that the purchase order was reviewed and approved after issuance or receipt of goods/services. ? For four of 45 disbursements reviewed, the expenditure was not supported by a receiving report. ? For two of 45 disbursements reviewed, it was determined that payment was made prior to the receipt of goods/services. ? For three of 45 disbursements reviewed, evidence of client clerical check was not retained. During our review of credit cards, we noted for three of ten credit card transactions reviewed, the transaction occurred over the Internet, resulting in card charges before goods were received without verification of the receipt of the prepaid items. For any samples tested, the sample was not intended to be, and was not, a statistically valid sample. Known questioned costs were based on our sample testwork. Estimated questioned costs were projected as a percentage of all major federal program non-payroll transactions. FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2020-001 RECOMMENDATION Stronger internal controls should be implemented over accounting for disbursements to ensure that all financial activities are properly processed and recorded. The School should maintain documentation to support all disbursements and ensure disbursements are allowable. Personnel should obtain additional training as needed. All employees involved in the travel and credit card processes should be trained on the approved policies and procedures. Additionally, the School should ensure they are in compliance with federal regulations and guidelines as put forth in 25 CFR 39; 25 CFR 900 and in 25 USC 450 j-l (k). VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS 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: A19AV00866 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting CRITERIA The School is required to file the Federal Financial Report, SF-425 to report program outlays and program income as prescribed by the Federal Awarding Agency. CONDITION Financial reporting obligations were not met during the year. CAUSE Adequate review systems were not in place for management to monitor compliance with these requirements and agree amounts reported to the general ledger. EFFECT The School was not always in compliance with federal regulations and guidelines. CONTEXT During our review of federal compliance, we noted the following: ? Non BIE grants were reported on the SF-425 reports. ? The fourth quarter SF-425 report was resubmitted after it was detected that the activity reported was only through the end of April. RECOMMENDATION The School should implement review procedures to ensure the information reported on the Federal Financial Report, SF-425, is accurate and appropriate. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2020-003 Repeat Finding: Yes, 2019-003 Program Names/CFDA Titles: CFDA Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization Program 15.042 A19AV00866 N/A Administrative Cost Grants for Indian Schools 15.046 A19AV00866 N/A Federal Agency: U.S. Department of the Interior Pass-Through Agency: Bureau of Indian Affairs Type of Findings: Noncompliance, Material Weakness Compliance Requirements: Procurement, Suspension and Debarment CRITERIA Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR ??200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable State and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR part 200. Additionally, Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. 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, as defined in 2 CFR ?180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System of Award Management (SAM) maintained by the General Services Administration (GSA) or (2) collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity (2 CFR ?180.300). CONDITION Adequate internal controls over its procurement procedures to ensure compliance with federal regulations and guidelines and School policies were not in place. The School did not establish complete written procurement standards. In addition, the School did not initially meet the requirement to verify that covered transactions were only made to an entity that was not suspended or debarred or otherwise excluded. CAUSE Insufficient staff training to ensure compliance with federal requirements and Board adopted policies and lack of record keeping. FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2020-003 EFFECT The School was not in compliance with federal guidelines. CONTEXT During our review of purchasing, we noted the following: ? For procurements over $25,000 reviewed, documentation demonstrating a vendor check for suspension and debarment was not retained. ? Sealed bids were not performed in accordance with School policies. However, these purchases did not rise above the Simplified Acquisition Threshold. ? For all vendors reviewed with total expenditures within the Simplified Acquisition threshold, no documentation of quotes was maintained. ? There is no specific policy to ensure vendors are checked for suspension and debarment. RECOMMENDATION Resources should be allocated to train employees to ensure compliance with federal requirements regarding procurement. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2020-004 Repeat Finding: Yes, 2019-004 Program Name/CFDA Title: Indian School Equalization Program CFDA Number: 15.042 Federal Agency: U.S. Department of the Interior Federal Award Number: A19AV00866 Pass-Through Agency: Bureau of Indian Affairs Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions CRITERIA According to the Indian Child Protection and Family Violence Protection Act (25 USC 3201 et seq.), 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 conduct with, or control over, Indian children. In addition, individuals in those positions must meet the required 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 Current and timely character investigations were not retained for all employees. CAUSE Due to small staff size, the School did not always submit requests for character investigations timely. EFFECT The School was not in compliance with the Indian Child Protection and Family Violence Protection Act. CONTEXT For one of five employee files reviewed, the employee has not received a background check since 03/20/15. RECOMMENDATION Internal controls should be implemented to ensure that all employees have a current background investigation in effect at all times. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

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