Roosevelt Elementary School District No. 66Local Government

Finding Number: 2025‐001 Repeat Finding: Yes, 2024‐002 Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Title I Grants to Local Educational Agencies 84.010 S010A240003 N/A Education Stabilization Fund 84.425U S425U210038 N/A Federal Agency: U.S. Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Activities Allowed or Unallowed, Period of Performance Criteria According to generally accepted accounting principles (GAAP), District management is responsible for establishing and maintaining internal controls over financial reporting to include controls over the District’s accounting records and general ledger transactions. Under 2CFR §200.303, District management is responsible for establishing and maintaining internal controls over journal entries that are adequate to ensure that all financial activities are properly processed and recorded. All journal entries related to federal monies must be supported by documentation, signed, dated, properly recorded, and approved by an authorized person. Condition The District did not follow federal regulations and guidelines related to activities allowed or unallowed and period of performance. Journal entries were not always properly supported or reviewed and approved by a second, authorized person. Cause Due to turnover in the District’s finance office and not following established procedures. Controls in place were not always followed. Effect The District was not in compliance with federal regulations and guidelines related to activities allowed or unallowed and period of performance. Context For 16 of 25 journal entries reviewed, the journal entry was not approved by an authorized person other than the preparer. Additionally, for four of eight journal entries reviewed from the Title I Grants to Local Educational Agencies program, the journal entry was not approved by an authorized person other than the preparer. Finally, for all four journal entries reviewed from the Education Stabilization Fund, the journal entry was not approved by an authorized person other than the preparer. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should follow journal entry procedures established to ensure compliance with federal requirements and to ensure accounting records are being appropriately reviewed and approved. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2025‐002 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559, 10.582 Federal Agency: U.S. Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $189,570 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria According to the Memo SP 60‐2016‐Indirect Costs Guidance for State Agencies and School Food Authorities, issued by the United States Department of Agriculture (USDA), and 2 CFR Part 200, Subpart E, a District may recover indirect costs of services rendered to school food service at a rate not to exceed the unrestricted indirect cost rate approved by the Arizona Department of Education (ADE). The approved indirect cost rate is subject to change each fiscal year. Condition Indirect Cost Guidance for the Child Nutrition Program was not followed correctly. Cause Due to turnover in the District’s finance office and not following established procedures. Effect Indirect costs of $189,570 were overcharged to the Child Nutrition Cluster program. Context The District charged $770,998 of indirect costs to the Child Nutrition Cluster program in the fiscal year. The maximum allowable indirect costs calculated was $581,428. As a result, the District charged $189,570 of indirect costs above the allowable limit. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure indirect costs are calculated in accordance with the formula set forth in the guidance issued by USDA. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Special Education Cluster Assistance Listing Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Agency: U.S. Department of Education Federal Award Numbers: H027A230007, H027X210007, H173A230003, H173X210003 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Procurement, Suspension and Debarment Criteria Non‐federal entities are prohibited from contracting with or making sub awards under covered transactions to parties that are suspended or debarred. “Covered transactions” include those procurement contracts for goods and services awarded under a non‐procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR §180.220. Additionally, the District should adhere to procurement methods outlined in 2 CFR §200.320. Condition Verification of suspension and debarment was not performed for one vendor the District utilized and spent at least $25,000 of federal grant monies. Additionally, the District did not follow federal guidelines for purchases exceeding the small purchases threshold. Cause Due to turnover in the procurement department, the District did not perform due diligence for the cooperative contracts used to make the purchases; therefore, documentation was not prepared or maintained for verification of suspension and debarment. Effect The District was not in compliance with federal regulations and guidelines related to suspension and debarment or procurement. However, it was subsequently determined that the vendor utilized was not suspended or debarred. Context For one of three purchases with vendors above $25,000 sampled, the District did not maintain documentation that verification a vendor was non suspended or debarred. In addition, for three purchases that exceeded the Federal micro‐purchase threshold, the written quotes obtained did not allow sufficient time before the purchase was to be made to allow vendors to effectively respond. The District only allowed 24 hours for several of the requests for quotes. Therefore, the District’s method of procurement was not in accordance with federal guidelines. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should follow purchasing policies and procedures established to ensure compliance with federal procurement requirements. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2024‐002 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Title I Grants to Local Educational Agencies 84.010 S010A230003 N/A Education Stabilization Fund 84.425U, 84.425W S425U210038, S425W210003 N/A Federal Agency: U.S. Department of Education Pass‐Through Agency: Arizona Department of Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Activities Allowed or Unallowed, Period of Performance Criteria Under 2CFR §200.303, District management is responsible for establishing and maintaining internal controls over journal entries that are adequate to ensure that all financial activities are properly processed and recorded. All journal entries related to federal monies must be supported by documentation, signed, dated, properly recorded, and approved by an authorized person. Condition The District did not follow federal regulations and guidelines related to activities allowed or unallowed and period of performance. Cause Due to turnover in the District’s finance office and not following established procedures. Controls in place were not always followed. Effect The District was not in compliance with federal regulations and guidelines related to activities allowed or unallowed and period of performance. Context For three of 10 journal entries reviewed from the Title I Grants to Local Educational Agencies program, the journal entry was not approved by an authorized person other than the preparer. Finally, for two of five journal entries reviewed from the Education Stabilization Fund, the journal entry was not approved by an authorized person other than the preparer. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should follow journal entry procedures established to ensure compliance with federal requirements. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2019-001 Repeat Finding: No Program Name/CFDA Title: Child Nutrition Cluster CFDA Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass-Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles CRITERIA The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Grant Guidance), sets forth the standards for determining the allowable costs of federally funded grants and contracts administered by state and local governments and contains provisions for determining indirect cost rates for grantees and sub-grantees of federal grants. The Arizona Department of Education (ADE) calculates and issues indirect cost rates to Arizona School Districts annually in compliance with the Indirect Cost Plan. Certain costs are classified as extraordinary or distorting expenditures and are excluded from the computation of the indirect cost rate and should therefore be excluded from the District costs applied to the rate. Excluded costs include capital outlay, debt service, judgments against the LEA, food, and internal service fund expenditures. CONDITION The District lacked adequate internal controls to calculate indirect costs charged to the Child Nutrition program. CAUSE The District was not aware that certain costs should be excluded from the costs applied to the indirect cost rate. EFFECT Indirect costs charged to the Child Nutrition program were overstated as originally reported, however the financial statements were properly adjusted upon the recognition of this error. CONTEXT The District did not exclude food and commodities expenditures from the Child Nutrition program costs applied to the indirect cost rate, which caused indirect costs to be overstated by $651,936.RECOMMENDATION The District should follow policies and procedures to ensure compliance with federal requirements regarding allowable costs and cost principles. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.

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