Sauk-Sauittle Indian TribeTribal Government

Finding 2023-002 – Procurement, Suspension and Debarment (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Major Program Affected – AL Number Program Name Award Number Award Year 93.441 Indian Self-Determination 248-96-0027 2023 Criteria – The Tribe’s procurement policies and procedures require at least three written bids or quotes for purchases over $2,500. Federal regulations require that grantees have controls in place to verify that vendors are not suspended or debarred prior to entering into contracts for goods or services exceeding $25,000. In accordance with 2 CFR 200.213, federal regulations and criteria of the Indian Self-Determination and Education Assistance Act (ISDEAA) requires that full bid and open competition be promoted in soliciting offers and awarding contracts for purchases. Contracting without providing for full and open competition is only permitted if there is only one responsible source and no other supplies or services will satisfy agency requirements, among other circumstances. Condition and Context – During the year, the Tribe had eight vendor contracts for the Indian Self-Determination program with expenditures greater than $2,500. Using a random sample methodology, we selected a sample of two vendors. For both vendors tested, we noted there was no evidence that three written bids or quotes were obtained prior to vendor selection. The Tribe provided sole source justification, however, the description for justifying limiting competition was not in accordance with the Tribe’s procurement policy. The Tribe had two vendor contracts with expenditures greater than $25,000. For both vendors tested, we noted there was no evidence that a suspension and debarment check was performed before entering into contracts or making payments to the vendors. Based on our verification on www.sam.gov, we noted both vendors were not suspended or debarred. Cause – A combination of lack of adequate personnel, and insufficient internal controls over the procurement, suspension and debarment procedures may have contributed to this finding. Additionally, the Tribe’s procurement policies do not address the suspension and debarment requirements. Effect – The Tribe could be subjected to questioned costs or other sanctions from funding agencies if they determine the program did not follow its procurement policies. The Tribe could be subjected to questioned costs or other sanctions from funding agencies if they determine vendors paid with federal funding were suspended or debarred. Questioned Costs – We are unable to determine if the Tribe could have obtained a better price for procurement that was not made through a full and open competitive process, and as such we cannot determine if any overpayment may have occurred. Therefore, questioned costs are unknown. Further, the vendors we tested were not suspended or debarred, so there are no question costs to report related to suspension and debarment requirements. Recommendation – We recommend the Tribe re-evaluate its internal controls over procurement, suspension and debarment and implement a supervisory review process to ensure compliance with the Tribe’s policies. We also recommend the Tribe consider updating its procurement policy in accordance with the 2024 Revisions to the Uniform Guidance (2 CFR 200), which would reduce undue burden on the Tribe’s finance and program manager personnel and Tribal Council. Views of Responsible Officials – The Tribe has continued to train new program and department staff regarding procurement thresholds for Request for Proposal’s (RFP’s) and will update the continued training with emphasis on threshold amounts to endure adherence to the current procurement policy. The Tribe has experienced a large amount of program and department personnel turned over post pandemic resulting in program staff that were only minimally trained. The Tribe will complete a comprehensive review of the RFP process and purpose changes to our internal policy and controls to align in the future with guidance standards. The Tribe will implement a two-part process to review bidding procedures to ensure alignment with existing policies. The Tribe has implemented a new debarment procedure that uses time and date stamp information on all debarment searches and an of attestation of search being done and by whom.

Finding 2023-004 – Special Tests and Provisions – Character Investigations (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Major Programs Affected – AL Numbers Program Name Award Number Award Year 93.441 Indian Self-Determination 248-96-0027 2023 Criteria – Per 42 CFR Part 136.404, all Indian Tribes receiving funds under the authority of ISDEAA must identify positions that permit regular contact with or control over Indian children and must only employ individuals who meet minimum standards of character, as evidenced by a character investigation. Per 42 CFR Part 136.406, a satisfactory character investigation involves a fingerprint check through the Federal Bureau of Investigation (FBI), among other requirements. Condition and Context – The Tribe is required to meet the minimum standard requirements for character investigations under the requirements of the Indian Health Services, including personnel who may have regular contact or control over children. Using a random sample methodology, we selected 3 of 8 Indian Health Services employees for testing. For two of the three employees selected for testing, we noted character investigations were restricted to non-fingerprint checks with the Washington State Patrol (WSP) and not with a federal agency. Additionally, for the three employee files tested, there was no evidence of review of the character investigation. Cause – Insufficient policies and internal controls over compliance for character investigations in accordance with federal requirements over Indian Health Services funding may have contributed to this finding. Effect – Failure to adhere to these requirements may cause the suspension of funds or result in questioned costs. Failure to properly review character investigations may result in employees being hired that do not meet federal standards. Questioned Costs – There are no questioned costs to report as it is unable to be determined if the employees met the minimum standards of character. Recommendation – We recommend the Tribe implement a supervisory review process over the character investigations to ensure they are following ISDEAA regulations. Views of Responsible Officials – The tribe performs background checks on all individuals before hire, we will expand that practice to include fingerprints checks for any and all employees that encounter Native Children. The Tribe will do a look back to current employees and evaluate the likelihood that they will come into contact with Native Children in their current job assignments and rolls and complete the expanded fingerprint checks on current staff. The Tribe will further identify all positions on the organization chart that could have the likelihood of encountering Native children creating a new policy around those identified positions currently on our organization chart. The Tribe will use a credit state or private agency to conduct those check in accordance with the guidelines of the Indian Self-Determination and Education Assistance Act.

Finding 2021-002 ? Reporting (Significant Deficiency) Major Programs Affected ? AL Numbers Program Names Award Numbers Award Years 15.021 Consolidated Tribal Government Program A05AV0078 2021 15.030 Indian Law Enforcement A21AV00090 2021 Criteria ? Federal regulations and grant terms and conditions of the ALN 15.021 and ALN 15.030 programs require that quarterly financial expenditure reports (SF-425 reports) are submitted to the awarding agencies. The Tribe should have internal controls established to ensure accuracy of information reported and ensure compliance with reporting requirements. Condition and Context ? We tested the four quarterly reports that were submitted in 2021 for ALN 15.021 and ALN 15.030 programs, and we noted the Tribe does not have sufficient internal controls established to ensure accuracy of the information reported. We noted that there was no evidence of a secondary review on six out of eight of these reports. Cause ? A combination of lack of adequate personnel and insufficient internal controls over the reporting procedures may have contributed to this finding. Effect ? There is an increased likelihood of errors in the federal expenditures, cash on hand, unobligated balances, and other information reported to the federal agencies in the SF-425 reports and ultimately an increased likelihood of noncompliance over reporting requirements. Questioned Costs ? This is an internal control over compliance finding and not a noncompliance finding; therefore, there are no questioned costs to report. Repeat Finding ? This finding is partially repeated from prior years and was previously reported as findings 2020-002, 2019-002, 2018-004, and 2017-004 in prior financial statements.Recommendation ? We recommend the Tribe implement a supervisory review to ensure accuracy of all reports before they are submitted to granting agencies. Views of Responsible Officials ? We agree with the auditor's finding and took action at the end of fiscal year 2022 to hire a Finance Director. Monthly budget versus actual financial reports will be distributed for management and director review and monitoring. The Tribe will develop a review and approval process for prepared financial reports to ensure timeliness and accuracy, which will include the mandatory sign off by a second reviewer.

Finding 2021-003 ? Reporting (Material Weakness and Instance of Noncompliance) Major Program Affected ? AL Number Program Name Award Number Award Year 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds n/a 2021 Criteria ? The Department of Treasury required submission of a one-time interim report by August 31, 2021, to report program expenditures through July 31, 2021. The Tribe should have internal controls established to ensure compliance with reporting requirements. Condition and Context ? We noted there was no evidence that the Tribe submitted the one-time interim report to the Department of Treasury. Cause ? A combination of lack of adequate personnel and insufficient internal controls over the reporting procedures may have contributed to this finding. Effect ? Not following federal grant requirements leads to noncompliance and can lead to increased oversight and audits by the federal agency. Questioned Costs ? This finding does not lead to questioned costs, so there are no questioned costs to report. Repeat Finding ? This is not a repeat finding. Recommendation ? We understand the Tribe reached out to the Department of Treasury to request an extension to submit the interim report due to turnover in the Tribe?s finance director and general manager positions. However, the Treasury did not provide an extension. We recommend the Tribe implement internal controls to ensure all new federal grants and contract reporting requirements are identified and monitored to ensure accurate reports are submitted to the granting agency. Views of Responsible Officials ? We agree with the auditor's finding and took action at the end of fiscal year 2022 to hire a Finance Director. The Tribe will inventory all grants, due dates and reporting requirements. Subsequently, reminders and alerts will be setup on Finance and Program Directors calendars to effectively manage due dates and deadlines for grant reporting.

Finding 2021-004 ? Procurement, Suspension and Debarment (Material Weakness) Major Program Affected ? AL Number Program Name Award Number Award Year 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) n/a 2021 Criteria ? Federal regulations require that grantees have controls in place to verify that vendors are not suspended or debarred prior to entering into contracts for goods or services exceeding $25,000. Condition and Context ? The SLFRF program had two vendor contracts totaling $66,812 that were subject to suspension and debarment requirements. There was no evidence that a suspension and debarment check was performed prior to entering into contracts with the vendors. Cause ? Lack of sufficient oversight may have led to not checking vendors for suspension and debarment. Effect ? The Tribe could be subject to questioned costs or other sanctions from the funding agency if vendors retained and paid from federal funds are later found to be suspended or debarred. Questioned Costs ? Based on our testing, we noted both vendors were not suspended or debarred, so there are no questioned costs to report. Repeat Finding ? This is not a repeat finding. Recommendation ? We recommend the Tribe implement a supervisory review process over the vendor contracting process to ensure suspension and debarment checks are performed. Views of Responsible Officials ? We agree with the auditor's finding. The Tribe has updated their current processes to include verifying the Suspension and Debarment listing for current and future vendors. Management will formally document and enforce the policies and procedures to ensure compliance with procurement requirements.

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