Amphitheater Unified School District No 10

Finding Number: 2025‐001 Repeat Finding: Yes, 2024‐001 Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $20,792 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.  Additionally,  2  CFR  §200.439  requires  capital  expenditures for  special  purpose  equipment  with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District did not have adequate controls in place to ensure a Capital Expenditure Pre‐Approval Request Form was submitted and approved prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. Effect The District charged unallowable costs to the program. Context The  District  purchased  a  coin  sorting  machine  for  $6,875  and  a  soft  serve  machine  for  $13,917  without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management  should  review  all  transactions  to  ensure  that  program  costs  are  allowable  and  in  adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Numbers: 10.553, 10.555, 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Numbers: 6AZ300400, 7AZ300AZ3 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $58,433 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria Under 2 CFR §200.303, the District is required to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the District is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR §200.439 requires capital expenditures for special purpose equipment with a unit cost of $5,000 or more to have the prior written approval of the Federal awarding agency or pass‐through entity. This includes ensuring a Capital Expenditure Pre‐Approval Request Form is submitted to Arizona Department of Education (ADE) for approval prior to purchasing equipment that is not included on ADE's Food and Nutrition Service approved equipment list. Condition The District did not submit a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing equipment items not on the ADE Pre‐Approved Capital Equipment list. Cause The District was unaware that it was required to get pre‐approval from ADE for this type of purchase. Effect The District charged unallowable costs to the program. Context The District purchased two software systems related to the CNC POS for $20,920 and $29,692, and one garbage disposal for $7,821, without submitting a Capital Expenditure Pre‐Approval Request Form to ADE for approval prior to purchasing items not on the ADE Pre‐Approved Capital Equipment list. The sample was not intended to be, and was not, a statistically valid sample. Recommendation Management should review all transactions to ensure that program costs are allowable and in adherence to applicable federal requirements. Views of Responsible Officials See Corrective Action Plan.

Finding Number: 2024‐002 Repeat Finding: No Program Name/Assistance Listing Title: COVID‐19 Education Stabilization Fund Assistance Listing Numbers: 84.425D, 84.425U Federal Agency: U.S. Department of Education Federal Award Numbers: S425D210038, S425U210038 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Reporting Criteria Education Stabilization Fund grant recipients are required to submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds. The District, as a subrecipient of the Arizona Department of Education (ADE), fulfills this requirement through completion of ADE's LEA Uses of ESSER I, II & III Report (ESSER Report). Condition The District did not maintain adequate supporting documentation for various data included in the ESSER Report submitted to ADE. Cause The District did not have sufficient review procedures in place to ensure the ESSER Report was sufficiently supported, and/or did not maintain documentation utilized when the ESSER Report was prepared. Effect The District was unable to accurately and fully support the data submitted on the ESSER Report. Context The data maintained by the District to support the allocation of costs to specific object codes and expenditure categories for ESSER II and ESSER III did not agree to the amounts reported to ADE. However, the total amounts expended for ESSER II and ESSER III were consistent with the District's accounting records. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure that accurate federal reports are prepared and that proper supporting documentation is maintained for all amounts indicated on such reports. Views Of Responsible Officials See Corrective Action Plan.