YUKON FLATS SCHOOL DISTRICTState Government

Finding 2025-002 Lack of Internal Controls over Activities Allowed and or Unallowed and Allowable Costs/Activities – Cash Disbursements Federal Agency: U.S. Department of Education passed through the State of Alaska, Department of Education and Early Development (DEED) Federal Program(s): ARP Act: ESSER III Assistance Listing Number(s):84.425U Award Number(s): Federal award number(s): S425U210020, Pass through entity award number(s): ER 25.YFSD.01, AR.25.YFSD.01 Award Years: 2025 Type of Finding: Significant deficiency in internal control over compliance. Criteria: 2 CFR Part 200 Subpart E §200.400(d) dictate that the accounting practices of a recipient (or subrecipient) must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the Federal award. This includes ensuring there is proper supporting documentation for transactions as well as methods to document approval of the cost/activity to determine whether it is allowable under the funding requirements. Condition and Context: We tested a sample of twenty-five (25) cash disbursements for the program. We noted seven (7) credit card transactions that lacked adequate supporting documentation. We did not identify any transactions in the program that appeared to be unallowed based on the context of the transaction. Cause: Lack of internal controls related to supporting documentation for transactions charged to the programs. Effect: Lack of internal controls allows for the potential for unallowable costs to be charged to the programs. Repeat Finding: This is a repeat of Finding of 2024-005, and since it is a repeat finding, we believe this to be a systemic issue. Questioned Costs: None reported. Recommendation: We recommend that management implement stronger internal controls over cash disbursements, specifically to retaining supporting documentation. Management Response: Management concurs with this finding. See Corrective Action Plan.

Finding 2025-003 Lack of Internal Controls over Reporting Federal Agency: U.S. Department of Education Federal Program(s): Indian Education – Tribal Leaders of Tomorrow Assistance Listing Number(s):84.299A Award Number(s): S299A200024-24 Award Years: 2024 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: All recipients are required to submit an annual Grant Performance Report providing the most current performance and financial expenditure information that is sufficient to meet the reporting requirements of 2 CFR 200.328, 200.329 and 34 CFR 75.720. Yukon Flats is required to submit quarterly performance reports within 30 days after the end of each quarter. Condition and Context: The client was unable to locate the annual report that was submitted for the program. Additionally, they were unable to show that the annual report or the quarterly reports were submitted timely. Cause: Lack of internal controls related to reporting requirements and employee turnover at the District. Effect: Lack of internal controls over reporting could allow requirements to be missed that could in turn lead to a loss of funding. Repeat Finding: This is not a repeat finding. Questioned Costs: None reported. Recommendation: We recommend that management implement stronger internal controls over reporting, specifically to retaining supporting documentation of timely submission. Management Response: Management concurs with this finding. See Corrective Action Plan.

Federal Agency: U.S. Department of Education passed through the State of Alaska, Department of Education and Early Development (DEED) Federal Program(s): COVID-19 CRRSA Act: ESSER II/ARP Act: ESSER III Assistance Listing Number(s): 84.425 U and D Award Number(s): Federal award numbers: S425U210020 and S425D210020, Pass through entity award number: ER 24.YFSD.01 Award Year(s): 2024 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Reporting requirements state that quarterly financial reports must be submitted within 30 days of the end of the quarter. An annual report is also required to be submitted in accordance with 20 U.S.C. 1221e-3, 1231a, and 3474. Yukon Flats School District is required to provide quarterly reimbursement request reports to DEED that contain program related costs incurred during the covered period. Condition and Context: Two quarterly reports and the annual report were tested for the reporting requirements of the program. It was noted that the District submitted one of the quarterly reports and the annual report. Cause: Lack of internal controls related to reporting requirements. Effect: The District was not in compliance with reporting requirements which could effect future funding. Repeat Finding: This was a repeat of Finding 2023-05, and since it’s a repeat finding we believe this to be an systemic issue to this program. Federal Schedule of Findings and Questioned Costs, Continued Questioned Costs: None reported. Recommendation: We recommend that management implement stronger internal controls over reporting to ensure compliance with program requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.

Federal Agency: U.S. Department of Education passed through the State of Alaska, Department of Education and Early Development (DEED) Federal Program(s): COVID-19 CRRSA Act: ESSER II / ARP Act: ESSER III (ESSER) and Title I-A Assistance Listing Number(s):84.425 U and D and 84.010A Award Number(s): Federal award number(s): S425U210020 and S425D210020 (ESSER), S010A230002, and S010A220002 (Title I-A), Pass through entity award number(s): ER 24.YFSD.01 (ESSER), IP 24.YFSD.01, and SI 24.YFSD.01 (Title I-A) Award Years: 2024 Type of Finding: Significant deficiency in internal control over compliance. Criteria: 2 CFR Part 200 Subpart E §200.400(d) dictate that the accounting practices of a recipient (or subrecipient) must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the Federal award. This includes ensuring there is proper supporting documentation for transactions as well as methods to document approval of the cost/activity to determine whether it is allowable under the funding requirements. Condition and Context: We tested a sample of seventeen (17) cash disbursements for ESSER and fourteen (14) cash disbursements for Title I-A. We noted seven (7) transactions from each program that lacked either adequate supporting documentation or documentation of proper review and approval. We did not identify any transactions in either program that appeared to be unallowable based on the context of the transaction. Cause: Lack of internal controls related to approval and supporting documentation for transactions charged to the programs. Effect: Lack of internal controls allows for the potential for unallowable costs to be charged to the programs. Repeat Finding: This is a repeat of Finding of 2023-006, and since it is a repeat finding, we believe this to be a systemic issue. Questioned Costs: None reported. Recommendation: We recommend that management implement stronger internal controls over cash disbursements, specifically to retaining supporting documentation and ensuring proper approval. Management Response: Management agrees with this finding, see Corrective Action Plan.

Federal Agency: U.S. Department of Education passed through the State of Alaska, Department of Education and Early Development (DEED) Federal Program(s): COVID-19 CRRSA ACT: ESSER II / ARP ACT: ESSER III (ESSER) and Title I-A Assistance Listing Number(s):84.425 U and D and 84.010A Award Number(s): Federal award numbers: S425U210020, S425D210020 (ESSER), S010A230002, and S010A230002 (Title I-A), Pass through entity award numbers: ER 24.YFSD.01 (ESSER), IP 24.YFSD.01, and SI 24.YFSD.01 (Title I-A). Award Year(s): 2024 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Management is responsible for designing, implementing and maintaining internal controls relevant to ensuring that transactions charged to programs follow proper internal control processes (2 CFR Part 200 Subpart E §200.400 (d). This includes ensuring there is proper supporting documentation for transactions as well as methods to document approval of the cost/activity to determine whether it is allowable under the funding requirements. Condition and Context: We tested a sample of fifteen (15) payroll transactions for ESSER and seven (7) payroll transactions for Title I-A. We noted four (4) instances where the transaction either lacked supporting documentation for payrate or hours worked for ESSER. We noted three (3) instances where the transaction lacked supporting documentation for payrate or hours worked for Title I-A. We also identified one (1) transaction charged to ESSER that appeared to be unallowable based on the context of the transaction. Cause: Lack of internal controls related to approval and supporting documentation for transactions charged to the programs. Effect: Lack of approval and adequate supporting documentation for transactions allows for an environment where unallowable costs could be charged to the programs.   Federal Schedule of Findings and Questioned Costs, Continued Repeat Finding: This is not a repeat finding, however, due to the number of exceptions identified, we believe this to be a systemic issue. Questioned Costs: None over the reporting threshold of $25,000. Recommendation: We recommend that management implement stronger internal controls over payroll transactions and improve the review, approval and maintenance of supporting documentation processes. Management Response: Management agrees with this finding, see Corrective Action Plan.

Federal Agency: U.S. Department of Education passed through the State of Alaska, Department of Education and Early Development (DEED) Federal Program(s): COVID-19 CRRSA ACT: ESSER II / ARP ACT: ESSER III (ESSER) and Title I-A Assistance Listing Number(s):84.425 U and D and 84.010A Award Number(s): Federal award numbers: S425U210020, S425D210020 (ESSER), S010A230002, and S010A230002 (Title I-A), Pass through entity award numbers: ER 24.YFSD.01 (ESSER), IP 24.YFSD.01, and SI 24.YFSD.01 (Title I-A). Award Year(s): 2024 Type of Finding: Significant deficiency in internal control over compliance. Criteria: Management is responsible for designing, implementing and maintaining internal controls relevant to ensuring that transactions charged to programs follow proper internal control processes (2 CFR Part 200 Subpart E § 200.400 (d)). Further, Uniform Guidance Requirements, which also apply to expenditures of ESSER funds, dictate the funding recipient is required to follow document personnel costs in accordance with 2 CFR Section 200.430 (i). The District is required to maintain time distribution records for employees funded under Federal Programs. Condition and Context: We tested a sample of fifteen (15) payroll transactions for ESSER and seven (7) payroll transactions for Title I-A. We were unable to verify the funding allocation for eleven (11) transactions for the ESSER funding and four (4) transactions for the Title I-A funding. The payroll expenditures charged to these programs were recorded using journal entries and lacked documentation of time and effort. The employee positions were not considered unallowable under the programs. Cause: Lack of internal controls over payroll expenditure allocation.   Effect: The lack of supporting documentation indicating the payroll expenditure allocation allows for the potential of payroll expenditures to be incorrectly charge to unallowable funding sources. Repeat Finding: This is not a repeat finding, however, due to the number of exceptions identified, we believe this to be a systemic issue. Questioned Costs: None reported. Recommendation: We recommend that management ensures employee personnel action forms are updated to reflect the correct fund allocations for payroll costs to ensure employees time is appropriately coded. Additionally, if charged to federal grant sources that time and effort be adequately tracked and documented. Management Response: Management agrees with this finding, see Corrective Action Plan.

Federal Agencies: U.S. Department of Education Federal Programs: COVID 19 - Education Stabilization Fund Assistance Listing Numbers: 84.425 U and D Award Numbers: Federal award number: S425D210020, Pass through entity award number: ER 23.YFSD.01 Award Years: 2023 Type of Finding: Material weakness in internal control over compliance and noncompliance. Criteria: Reporting requirements state that quarterly financial reports must be submitted within 30 days of the end of the quarter. The District is required to provide quarterly reimbursement request reports that contain program related costs incurred during the covered period. Condition and Context: During our test of reporting requirements of the program, it was noted that District did not submit any of the required reports timely; or within 30 days of quarter end, therefore not adhering to reporting requirements specified in the grant agreement. Cause: Lack of internal controls related to reporting requirements. Effect: Lack of internal control over compliance with reporting could affect future funding. Repeat Finding: This is a repeat of finding 2022-003, therefore we believe this to be a systemic issue to this program. Questioned Costs: None reported. Recommendation: We recommend that management implement stronger internal controls over reporting to ensure they comply with reporting requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.

Federal Agencies: U.S. Department of Education Federal Programs: COVID 19 - Education Stabilization Fund Assistance Listing Numbers: 84.425 U and D Award Numbers: Federal award number: S425D210020, Pass through entity award number: ER 23.YFSD.01 Award Years: 2023 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Management is responsible for designing, implementing and maintaining internal controls relevant to ensuring that transactions charged to programs follow proper internal control processes. This includes ensuring there is proper supporting documentation for transactions as well as methods to document approval of the cost/activity to determine it is allowable under the funding requirements. Condition and Context: We tested a sample of 25 cash disbursements for compliance with allowable costs/activities for the ESSER funding and noted 2 instances where the transaction lacked supporting documentation and 14 transactions that lacked documentation of proper approval. Cause: Lack of internal controls related to approval and supporting documentation for transactions charged to the grant. Effect: Lack of approval for transactions allows for an environment where unallowable costs could be charged to the grant. Repeat Finding: This is not a repeat finding, however, due to the number of exceptions identified, we believe this to be a systemic issue to this program. Questioned Costs: None reported. Recommendation: We recommend that management put internal controls over cash disbursements and improve the approval process to ensure transactions charged to grant funding follow all required laws and regulations. Management Response: Management agrees with this finding, see Corrective Action Plan.

Finding 2022-003 Late Reporting and Noncompliance with Reporting Requirements Federal Agencies: US Treasury Federal Programs: COVID 19- Education Stabilization Fund Assistance Listing Numbers: 84.425 U and D Award Numbers: ER 22.YFSD.01 Award Years: 2022 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Reporting requirements state that quarterly financial reports must be submitted within 30 days of the end of the quarter. The Fort Yukon School District is required to provide quarterly reimbursement request reports that contain program related costs incurred during the covered period. Condition and Context: Two quarterly reports were tested for the reporting requirements of the program. It was noted that the Fort Yukon School District did not adhere to quarterly reporting requirements specified in the grant agreement. Cause: Lack of internal controls related to reporting requirements. Effect: The Fort Yukon School District was not in compliance with reporting requirements which could cause a decrease in funding. This could also result in lack of reimbursement of expenditures already incurred by the program. Repeat Finding: This was not a repeat finding for this program, therefore we believe this to be an isolated issue to this program. Questioned Costs: None reported. Recommendation: We recommend that management put internal controls in place over reporting to ensure they comply with reporting requirements. Management Response: Management agrees with this finding, see Corrective Action Plan.

Finding 2021-002 Late Reporting and Noncompliance with Reporting Requirements Federal Agencies: Department of Education, passed through the State of Alaska Department of Education and Early Development Federal Programs: Title I Grants to Local Education Agencies CFDA Numbers: 84.010 Award Numbers: Federal Award: S010A200002, State of Alaska Department of Education and Early Development Award: IP 21.YFSD.01 and SI 21.YFSD.01 Award Years: 2021 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Criteria: Reporting requirements within the grant agreements state that quarterly financial reports must be submitted within 30 days of end of quarter. The annual report card must be submitted timely within Department guidelines, by February 12, 2021. Condition and Context: The District did not adhere to the quarterly reporting requirements specified in the grant agreements. We tested two (2) quarterly reports, both of which were submitted late. The District also did not adhere to annual reporting requirements. Management was unable to provide us with a copy of the annual report card or proof of submission. Cause: Lack of internal control over reporting. Effect: Failure to follow compliance requirements could result in loss of federal funding. Questioned Costs: None noted. Repeat Finding: This is not a repeat finding, but we believe it to be a systemic issue. Recommendation: We recommend that management complies with all reporting requirements. Management?s Response: Management agrees with this finding. See Corrective Action Plan.