Tucson Unified School District No. 1

Finding Number: 2023‐001 Repeat Finding: Yes, 2022‐002 Program Names/Assistance Listing Titles: COVID‐19 Education Stabilization Fund; COVID‐19 Emergency Connectivity Fund Program Assistance Listing Numbers: 84.425C, 84.425D, 84.425D, 84.425U, 84.425W, 32.009 Federal Award Numbers: N/A, S425D200038, S425D210038, S425U210038, S425W210003, N/A Questioned Costs: N/A Federal Agency(ies): U.S. Department of Education, Federal Communications Commission Pass‐Through Agency(ies): Arizona Department of Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Equipment and Real Property Management Criteria According to Office of Management and Budget Uniform Guidance requirements 2 CFR §200.313(d)(2), a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition The District did not have documentation to support that a physical inventory was performed and reconciled at least once in the past two years. Cause Due to a cyber security incident, physical inventory records could not be recovered. Effect The District was not in compliance with the requirements set forth by the federal government. Context The District did not maintain documentation for the most recent physical inventory in July 2022 due to data loss from a cyber security incident. The District last performed and reconciled a physical inventory in fiscal year 2015. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure that a physical inventory is performed and reconciled to asset records at least once every two years. Views of Responsible Officials See Corrective Action Plan.