Gilbert Unified board accepts FY2024 single-audit package after finding tied to Emergency Connectivity Fund application

GILBERT, Ariz. — The Gilbert Unified District governing board accepted the district's fiscal year 2024 single-audit reporting package and the district's 2024 Uniform System of Financial Records (USFR) compliance questionnaire during its March 4 work-study and brief board business meeting.

District presenters told the board the single-audit identified one finding related to the Emergency Connectivity Fund (ECF) grant application. The application submitted in May 2022 used a purchase order that referenced federal ESSER III expenditures tied to Chromebooks; auditors said that made part of the ECF reimbursement effectively a federal-to-federal reimbursement. District staff said the purchase order line in question totaled about $141,000, and a later speaker referenced $144,000 as the amount "at risk." The district also said it received more than $1 million in ECF reimbursements in January 2024 for Chromebooks.

Why it matters: the finding exposes a potential requirement to return a portion of federal reimbursement if state auditors determine the ECF payment included impermissible federal-to-federal reimbursement. District staff said the external audit detected the issue and they have implemented additional internal controls intended to prevent a repeat.

Bonnie Betts, associate superintendent for business services, told the board that the single audit is required for districts spending more than $750,000 in federal funds and that the district's internal-control framework did not catch the purchase-order error before submission but the external audit did. "Our internal controls were not set up to necessarily find the error before it created the error, but the internal control related to our external auditor did detect it, giving us the opportunity to correct the issue," Betts said.

Betts and finance staff described next steps: finance must review and approve all state and federal grant applications before they are submitted by any department or school; the new step will apply to E-Rate applications as well. The board was told staff already implemented that oversight.

Jackie Matin, who presented the USFR compliance questionnaire results and manages day-to-day finance work for the district, said auditors posed 71 yes-or-no questions in the USFR review and the district returned nine "no" answers. Matin said two findings were in expenditures (one was the single-audit ECF matter and the other was a student club account that ended the fiscal year with a negative balance of $126), and additional management-procedure items included fundraising-approval documentation and property-inventory discrepancies at one school.

Matin said turnover in finance staffing contributed to at least one account-coding error discovered in year-end work, and that three inventory items at one school did not match the stewardship listing (two listed but not found; one found but not listed); all three items were described as older equipment under $2,000 each. Mesquite High School did not complete an inventory within the required three-year cycle, Matin said; the district added a new schedule and is on track to complete inventories going forward.

Matin also described the district's approach to compliance improvement: increasing trainings for attendance clerks and campus staff, reviewing account-code creation against the USFR chart of accounts before adding new codes, monthly (and as-needed daily) reviews of expenditures, and bringing a policy change to the policy committee to allow the board to approve a list of student fundraiser types annually (with potential delegation to administration).

Board action and votes: the board accepted the FY2024 single-audit reporting package and the FY2024 USFR compliance questionnaire by roll-call votes. For the single-audit package (Agenda item 6.01), the motion to accept was moved by Jill Humphreys and seconded; the roll-call recorded votes of Jill Humphreys (Aye), Chad Thompson (Aye), Jesse Brainard (Aye), Blake Robinson (Aye) and Shana Murray (Aye). For the USFR questionnaire (Agenda item 6.02) the board recorded the same outcome. The consent agenda earlier that evening also passed by voice vote, and the meeting adjourned after routine business.

Board members and staff emphasized the uncertainty about whether any of the ECF funds will be demanded for repayment. "There is potentially $141,000 at risk that we may have to return to the federal government," Bonnie Betts said; she and other staff noted they do not yet know whether state or federal auditors will require repayment and that the district will await action by the Arizona Department of Education and the State Auditor/ Auditor General after the board accepts the audit package.

The board will receive the single-audit and USFR documents for its roll-call acceptance on agenda items numbered 06/2001 and 06/2002, staff said. The district said it will continue to monitor the matter and that the new finance-review requirement applies to all grant applications going forward.

Votes at a glance: - Consent agenda: approved by voice vote (passed). - Agenda item 6.01 — Acceptance of FY2024 single-audit reporting package: motion moved by Jill Humphreys; seconded; roll-call 5-0 (Humphreys, Thompson, Brainard, Robinson, Murray) — accepted. - Agenda item 6.02 — Acceptance of FY2024 Uniform System of Financial Records compliance questionnaire: motion moved; seconded; roll-call 5-0 (Humphreys, Thompson, Brainard, Robinson, Murray) — accepted.

For follow-up: staff said they will present a draft policy or a list of fundraiser types at the policy committee in April and will continue the strengthened finance review of grant applications. The district did not specify a deadline by which state auditors will decide whether any funds must be returned.

(Reporting based on the Gilbert Unified District work-study and brief board business meeting, March 4, 2025.)