Mammoth-San Manuel Unified School District No. 8

Finding Number: 2024‐001 Repeat Finding: No Program Name/Assistance Listing Title: 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 Elementary and Secondary School Emergency Relief I, II & III Report (ESSER Report). Condition Inadequate internal controls existed over the Education Stabilization Fund reporting process. Cause The District did not have sufficient review procedures in place to ensure the data in the ESSER Report was properly calculated and supported. 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 III did not agree to the amounts reported to ADE. However, the total amounts expended for ESSER III were consistent with the District’s accounting records. Additionally, the amounts submitted for the LEA Hiring and Retention of Specific Positions were not based on individual staff counts. 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.

Finding Number: 2024‐002 Repeat Finding: No Program Name/Assistance Listing Title: Education Stabilization Fund Assistance Listing Number: 84.425D Federal Agency: U.S. Department of Education Federal Award Number: S425D210038 Pass‐Through Agency: Arizona Department of Education Questioned Costs: $9,500 Type of Finding: Noncompliance, Material Weakness Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Criteria Management is responsible for establishing and maintaining internal controls over payroll. In addition, management is responsible for maintaining documentation to support all salary and wage payments to employees. Further, 2 CFR Part 200.430 requires that salaries and wages must be based on records such as pay agreements. Condition The District lacked proper internal controls over payroll. Cause The District did not establish adequate controls over the preparation of employee pay agreements. Effect The District did not have sufficient documentation to support the rate of pay for 19 stipends paid from federal funds. In addition, there was no documentation to support that 21 stipends paid were approved by the District’s Governing Board. Context During our review of payroll records for 27 employees who received stipends, we noted that for 19,the employee’s pay agreement did not include the stipend amount. The questioned cost of $9,500 represents the total amount of stipends paid to the 19 employees. The projected questioned costs could be in excess of $25,000. Additionally, the District did not maintain documentation to support that the stipends were approved by the Governing Board for 21 of the stipends reviewed. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should implement and enforce payroll procedures that ensure documentation is maintained which supports costs charged to federal programs. These procedures should include maintaining official, Board‐approved agreements for all employee wages. Views of Responsible Officials See Corrective Action Plan.