Cartwright Elementary School District No. 83

Finding Number: 2025‐001 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Agency: U.S. Department of Education Federal Award Number: S425U210038 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $231,730 Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Management is responsible for establishing and maintaining internal controls over its accounting records. Additionally, 2 CFR 200.303 requires the District establish and maintain internal control over the federal awards that provides reasonable assurance that the District is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Districts must submit expenditure support through the Arizona Department of Education’s (ADE) Grants Management Enterprise system for ADE to review and approve grant reimbursements. Districts must perform grant close out procedures. Condition The ESSER III Set Aside grant had a positive ending balance at year end. However, the grant should have been closed out as of 12/31/24. Cause The District's internal controls over grant close out and reporting procedures did not detect an error. Effect The District is at risk for making unallowable expenditures. The District was required to revert the unallowable funds to the grantor. Context Duplicate invoices were submitted to ADE for reimbursement, resulting in an overpayment of $231,730. In addition, the District requested and was reimbursed $28,019 in indirect costs, however, that money was not moved into the indirect cost fund until after audit procedures were performed. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should strengthen existing internal controls over grant reporting to enhance procedures that reduce the risk of unallowable expenditures. Specifically, procedures should be in place to prevent expenditures from being submitted more than once for reimbursement. Views of Responsible Officials See Corrective Action Plan.