Legacy Traditional School - Deer Valley

Federal Agency: U.S. Department of Education Federal Program Title: Charter Schools Program (CSP) Assistance Listing Numbers: 84.282 Federal Award Program Year: July 1, 2024 – July 30, 2025 Pass-Through Agency: Arizona Department of Education Pass-Through Number: S282A240006 Type of Finding: Significant deficiency

Compliance Requirement: Equipment and real property management Criteria: Grantees must perform physical inventory counts of equipment acquired under federal awards and provide support that the count was taken within the last two years. Condition: The School did not perform counts of the equipment purchased with federal awards. Questioned Costs: None reportable. Context: Management was unable to provide supporting documentation that physical inventory counts of equipment acquired under federal awards were completed within the last two years. Effect: This increases the risk of loss/theft/misuse going undetected and can lead to misstated asset records and SEFA amounts, resulting in questioned costs and reportable findings. Cause: As a result of turnover in various departments in recent years, physical counts of equipment purchased with federal awards were not completed in the last two years. Identification as a Repeat Finding: Not a repeat finding. Recommendation: Physical counts of equipment purchased with federal awards must be counted at least every two years and compared to equipment records to identify any differences. Documentation of these counts should be maintained to demonstrate compliance with the applicable federal awards requirements. Views of Responsible Officials and Planned Corrective Actions: Our management team has acknowledged the finding and is committed to performing and maintaining documentation of all required annual physical counts of equipment purchased with federal awards. We will require that responsible program manager ensures retention of documentation of the physical counts.

Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary Emergency Relief and American Rescue Plan – Elementary and Secondary School Emergency Relief Assistance Listing Numbers: 84.425D and 84.425U Federal Award Program Year: July 1, 2023–July 30, 2024 Pass-Through Agency: Arizona Department of Education Pass-Through Number: S425D210038 and S425U210038 Type of Finding: Other matter Compliance Requirement: Reporting – Special Reports Criteria: Grantees must submit an annual performance report with data on expenditures, planned expenditures, subrecipients, and uses of funds as set forth in compliance supplement. Condition: Annual performance report was filed; however, support used for such reporting was not provided. Questioned Costs: None reportable. Context: Management was unable to provide supporting documentation for the annual performance report filed, resulting in the auditor’s inability to perform key line item 2 (line 3.b10), as required by the compliance supplement. Effect: In the event support was required by funders, the School would be unable to provide necessary supporting documentation. Cause: The School did not adequately retain supporting documentation. Identification as a Repeat Finding: Not a repeat finding. Recommendation: Supporting documentation for all required annual performance reports, and any required filings, should be maintained on School servers. Views of Responsible Officials and Planned Corrective Actions: Our management team has acknowledged the finding and is committed to maintaining all required annual performance reports supporting documentation. We will require that responsible program manager ensures retention of such documentation.