FY 2024 USFR Compliance Questionnaire

Uniform System of Financial Records for Arizona School Districts Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General Revised 6/24 Page 1 of 33

Uniform System of Financial Records for Arizona

School Districts (USFR) Compliance Questionnaire

Instructions

Governing board/management procedures

Budgeting

Accounting records

Cash and revenue

Supplies inventory

Property control

Expenditures

Travel

Credit cards and purchasing cards (p‐card)

Procurement

Classroom Site Fund

Payroll

Financial reporting

Student attendance reporting

Information technology (IT)

Transportation support

Records management

General long‐term debt

Arizona Auditor General Revised 6/24 Page 2 of 33

Instructions

Arizona Revised Statutes (A.R.S.) §15-271 requires the Arizona Auditor General to inform any school

district failing to establish and maintain the requirements prescribed by the Uniform System of Financial

Records for Arizona School Districts (USFR) that it has 90 days to correct the cited deficiencies. The

USFR prescribes the minimum internal control policies and procedures to be used by Arizona school

districts for accounting, financial reporting, budgeting, attendance reporting, and various other

compliance requirements. To help the Arizona Auditor General determine whether a district has attained

an acceptable degree of compliance with USFR requirements, the audit firm must complete this USFR

Compliance Questionnaire (Questionnaire).

A.R.S. §§15-213(F) and 15-914(G) require districts to have a systematic review of their purchasing

practices and average daily membership (ADM), respectively, performed in conjunction with their annual

or biennial financial audit to determine whether the district complied with the applicable State of Arizona

procurement and student attendance laws and rules. Auditor completion of the Procurement and

Student attendance reporting Questionnaire sections constitutes the required systematic reviews.

Audit firms must gain an understanding of the district’s internal controls and obtain and document

sufficient, appropriate evidence annually to support each Questionnaire response. These instructions,

the Questionnaire questions, and the required review procedures constitute the minimum audit

standards for completing the Questionnaire. Required review procedures are included in the

Questionnaire and in the “tooltip” next to applicable questions in the web-based auditor submission

Questionnaire. The Arizona Auditor General may reject Questionnaires that are not prepared in

compliance with the minimum audit standards.

• Audit documentation must describe the procedures performed, items reviewed, and the results of

such procedures and reviews to support the auditor’s Questionnaire responses and related

comments.

• Evidence may be obtained through test work, observation, examination, and client assertion.

However, client assertion alone is not adequate evidence to support “Yes” responses on the

Questionnaire.

• The audit firm must determine the district reviewed documents and transactions and provided

sufficient evidence of approval including manual or electronic signatures or initials and date of

review.

• Audit firms must consider population size in determining the number of items to test (i.e., sample,

scan, review, examine, or observe), and the items selected should be representative of the

population. Therefore, testing 1 transaction, record, or item is not sufficient. The Credit cards and

purchasing cards, Procurement, and Student attendance reporting Questionnaire sections

prescribe minimum sample sizes for specific questions. Population and samples sizes used for test

work should be entered in the fields provided next to the applicable questions throughout the

Questionnaire.

• A “Yes” response indicates that the audit firm has determined that the district complied with the

USFR for that question based on auditor obtained evidence. Several review procedures allow for

auditors to determine whether the district implemented compensating controls when recommended

USFR procedures could not be implemented due to limited staff size. When compensating controls

are found, auditors should answer the question “Yes” and describe in the comments the

compensating controls in place to meet the question’s objective. However, the Arizona Auditor

General makes the final determination of compliance with the USFR based on the evidence

presented in the Questionnaire, audit reports, audit documentation, and any other sources of

information available.

Uniform System of Financial Records for Arizona School Districts Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General Revised 6/24 Page 3 of 33

• A “No” response indicates the district did not comply with the USFR for that question. Audit firms

must explain the district’s deficiency noted for all “No” responses in the comment box below the

question. Deficiencies must be described in sufficient detail to enable the Arizona Auditor General to

determine the nature and significance of the deficiency for:

(a) assessing compliance with the USFR,

(b) appropriately describing the deficiency in a report, and

The description should include the number of items tested and the number of exceptions noted,

dollar amount of the error, and any other relevant information that would provide context for the

deficiency. For deficiencies related to processes required at regular intervals such as monthly bank

reconciliations, the description should adequately describe whether the district’s processes did not

meet required intervals or were not completed at all.

Each deficiency comment should specifically describe how the district did not meet the USFR

requirement described in the related question.

Cash and revenues questions apply to all the district’s cash and revenue, including food service,

auxiliary operations, extracurricular activities fees tax credit, and student activities receipts and bank

accounts. Comments for “No” responses to these questions should indicate the type of receipt or

bank account to which the deficiency applies.

• An “N/A” response indicates the district did not have activity related to the USFR requirements for

that question. The audit firm must explain all “N/A” responses in the comment box below the

question, unless the reason for the N/A is obvious.

The questions in the Questionnaire do not address all requirements of the USFR. If the audit firm is

aware of noncompliance with a requirement of the USFR that is not addressed in the Questionnaire,

including the Arizona Administrative Code (A.A.C.), Title 7, Ch. 2, Articles 10 and 11, (School District

Procurement Rules) and the Arizona Department of Education’s (ADE) membership and attendance

guidelines, the audit firm should include the compliance findings in its reports issued in accordance with

Governmental Auditing Standards and Title 2 U.S. Code of Federal Regulations Part 200, Uniform

Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform

Guidance), as applicable.

The audit firm must make the resulting audit documentation supporting the audit firm’s Questionnaire

responses and comments available on request for the Arizona Auditor General and the ADE’s review. To

facilitate this review, the audit firm should include in the audit documentation a copy of the Questionnaire

with references to the audit procedures performed for each question.

Once the audit firm has completed, reviewed, and signed the Questionnaire, it must submit it

electronically to the Arizona Auditor General by following the instructions at the end of the web-based

auditor submission Questionnaire. Audit firms should print the file to PDF to create the Questionnaire

document to distribute to the district. As required by A.R.S. §15- 914(D), the district must submit the

completed Questionnaire with the audit reporting package to the district’s county school

superintendent’s office and ADE.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 4 of 33

Governing board/management procedures–Arizona Revised Statutes (A.R.S.) §38-503

Objective: To determine whether the governing board and District management have established and implemented certain procedures as required by statute.

FY24 #

Question

Review procedure

GBMP01

The District held governing board meetings in accordance with

A.R.S. §§38-431 through 38-431.09, and prepared and retained

written minutes and/or recordings.

Determine the District:

•

Included a statement on its website describing where all public notices of their

meetings were posted, including the physical and electronic locations, and gave

additional public notice as is reasonable and practicable for all meetings and

maintained documentation to support all meeting notices were posted on its website.

A.R.S. §38-431.02(A)(2)

•

Posted public meeting notices and agendas at least 24 hours before the meeting.

A.R.S. §38-431.02(C) and (G)

•

Provided for the taking of written minutes or a recording of all public meetings,

including executive sessions, and made the minutes or recording available for public

inspection no later than 3 working days after the meeting except as otherwise

specifically provided by statute. A.R.S. §§38-431.01(C),(D), and (E) and 38-431.03

GBMP02

The District annually provided governing board members and

employees guidance on what constitutes a substantial interest and

that the conflict-of-interest statutes apply to all District governing

board members and employees as a part of their employment.

A.R.S. §§38-502, 38-503 and 38-509

Determine the District maintained:

•

Documentation to support the guidance provided.

A list of those who received the guidance and the date it was provided.

GBMP03

The District annually obtained conflict-of-interest (COI) forms that

allowed governing board members and employees to make known

and fully disclose a conflict of interest in any contract, sale,

purchase, service, or decision, and prior to accepting the forms,

management reviewed the information to ensure governing board

members and employees properly completed the form and

sufficiently disclosed the required information. A.R.S. §§38-502 and

38-503

Review the COI forms obtained from the governing board members and employees and

determine:

•

Management’s review of COI forms was documented on each signed form or in the

District’s official governing board meeting minutes.

•

If a conflict was disclosed, the form described the nature of the interest/conflict as

required by statute to allow district management to consider the conflict’s potential

impact on district decisions.

•

If no conflict was disclosed, determine the form included a signed statement of no

conflict.

GBMP04

The District maintained, for public inspection, a special file with all

documents necessary to memorialize all governing board members

and employees COI disclosures. A.R.S. §38-509

Determine all COI forms and related documents are maintained in one special file and the

file is publicly available electronically or in hard copy.

GBMP05

Employees or governing board members with reported conflicts,

except as provided in A.R.S. §15-323, refrained from voting upon or

otherwise participating in any manner in that contract, sale,

purchase, service, or decision of the school district. A.R.S.

§§38-502 and 38-503(A)(B)

If an employee or governing board member disclosed a conflict, determine:

•

The governing board member or employee with the conflict refrained from

participating in any decision-making processes related to the conflict.

•

Disclosed conflicts were considered in relation to district procurement decisions and

contract awards.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 5 of 33

GBMP06

The District’s management notified the Arizona Auditor General and

appropriately resolved all allegations of theft, fraud, or misuse of

District monies and assets in a timely manner.

Determine management’s action to resolve all allegations of theft, fraud, or misuse of

district monies or assets by inquiries of District staff, review of governing board minutes,

search of local media coverage, and results of audit test work, including examining

copies of the incident reports or communicating with investigative agencies for known

allegations.

•

If the audit firm determines that district management was aware of allegations but did

not appropriately resolve them in a timely manner (e.g., no action was taken; actions

were not documented; actions were delayed, inadequate, or inappropriate to the

circumstances), the audit firm should answer the question “No.” This includes

instances where an external investigation is underway for allegations but district

management did not request the investigation, was not fully cooperating with the

investigators, or was not otherwise attempting to resolve the allegations.

•

If the audit firm determines that district management was not aware of any allegations

the question should be answered “N/A.”

•

If the audit firm finds evidence of theft, fraud, or misuse of district assets but does not

find evidence that district management was aware of the possible theft, fraud, or

misuse, the audit firm should report the incident to the Arizona Auditor General and

answer this question “N/A.”

•

If the audit firm finds that the district appropriately resolved allegations of theft, fraud,

or misuse and notified the Auditor General answer this question “Yes” and include a

summary of the allegation and action taken by District management in the comments.

•

Also consider if the district’s internal controls failed to prevent or detect the theft,

fraud, or misuse and include a deficiency in the USFR compliance area where the

control failed.

GBMP07

The governing board established written personnel and payroll

policies and approved employee contracts, wage agreements,

salary and wage schedules, and any other agreed-upon terms of

employment.

Determine

•

Employee pay rate documentation or employment contracts were governing board

approved.

•

District policies and employee pay rate forms or contracts documented all agreed-

upon terms of employment, including the number of paid holidays provided to hourly

employees, and the number of workdays, number of paid holidays, and the number

of hours to be worked per day for contract employees.

GBMP08

The governing board appointed a student activities treasurer and, if

applicable, assistant student activities treasurers. A.R.S. §15-1122

Review the governing board minutes to determine the required appointments were

completed annually or as necessary for staff changes.

GBMP09

The governing board received monthly Student Activities Fund

Reports of Cash Receipts, Disbursements, Transfers, and Cash

Balances that were accurately prepared. A.R.S. §15-1123

Sample the Student Activities reports to determine if they were accurately prepared and

presented monthly to the governing board.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 6 of 33

GBMP10

The governing board approved student clubs’ and organizations’

fund-raising events. A.R.S. §15-1121 and AG Opinion I84-018

For the deposits sampled in CR11, determine the governing board gave prior approval

for student activities events. Indicate in the comments any events that included raffles,

bingo, or other forms of gambling, which are not legal events for student clubs.

GBMP11

The governing board obtained voter approval to construct buildings

and purchase or lease school sites, unless otherwise exempted by

A.R.S. §15-342(25).

Budgeting–USFR IV

Objective: To determine whether the District’s budget preparation processes ensure that the District properly allocates the monies it receives, stays within those budgets,

and accurately informs the public about the use of those monies.

FY24 #

Question

Review procedure

BUD01

The budget included all funds as required by A.R.S. §15-905 and

followed the form’s Budget—Submission and Publication

Instructions.

If no, list the budget requirements that the District did not complete or complete timely,

such as:

•

Prepared budgets for all funds.

•

Prepared proposed budget and provided notice of public hearing prior to proposing

the budget no later than July 5.

•

Followed truth in taxation requirements and posted required information, if applicable.

•

Adopted budget by July 15.

•

Met publishing requirements including providing a link on their website to budget

documents on ADE’s website.

BUD02

Total budgeted expenditures on the originally adopted budget for

the Maintenance and Operation (M&O) and Unrestricted Capital

Outlay Funds (UCO) were less than or equal to the budgeted

amounts on the published proposed budget and within the general

budget limit (GBL) and the unrestricted capital budget limit (UCBL).

A.R.S. §15-905(E)

BUD03

The District revised its budget on or before December 15, if ADE

notified the District that its M&O or UCO Fund budgeted

expenditures exceeded the GBL or UCBL. A.R.S. §15-905(E)

•

Review the District’s BUDG-25 Budget Verification letter and any subsequent

information from ADE and determine the District appropriately revised its M&O or

UCO Fund budgeted expenditures to be within the GBL or UCBL, as applicable.

•

Verified the District followed the notice and publication requirements described in

A.R.S. §15-905(C) and (D) if the M&O or UCO Fund budgeted expenditures exceed

the GBL or UCBL by more than 1 percent of the GBL.

•

Verified the District submitted the revised budget to ADE by December 18.

•

N/A for districts whose BUDG-25 letter did not indicate a revision was required.

BUD04

The District completed its revised expenditure budget before

May 15 and filed it electronically with the Superintendent of

Public Instruction by May 18. A.R.S. §15-905(I)

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 7 of 33

BUD05

The District reduced the budget by the prior year’s overexpenditure

(or a portion of the prior year’s overexpenditure, as approved by the

Superintendent of Public Instruction) or the District began the

process to correct its prior year’s data that impacts state-aid and/or

budget capacity. A.R.S. §§15-905(M) and 15-915

Accounting records–USFR VI-B

Objective: To determine whether the District accurately maintains accounting records to provide support for financial information. Test work should indicate the procedures

performed to document what processes and controls the District has in place to reduce the risk of undiscovered errors that would affect the reliability of information

reported to the public and oversight agencies, such as tracing detailed source documents to the District’s trial balance that agree to the financial statements.

FY24 #

Question

Review procedure

AR01

The District coded transactions in accordance with the USFR Chart

of Accounts.

For transactions auditors sample for test work from accounting records, expenditures,

travel, credit cards, journal entries, property control, payroll, and Classroom Site Fund

(CSF), determine transactions were coded properly.

AR02

The District sequentially numbered journal entries and retained

supporting documentation and evidence that journal entries were

signed, dated, and approved by someone other than the preparer.

•

Determine that the procedures used to initiate, authorize, record, and process journal

entries in the general ledger were properly separated among the staff. If adequate

separation was not possible due to the District’s limited staff size, determine that

management established alternate procedures that adequately control the risk of

unauthorized transactions.

•

Scan the journal entry report or otherwise determine the journal entries are

sequentially numbered.

•

Sample adjusting journal entries to determine journal entries were properly supported

and approved, signed, and dated by someone other than the preparer.

•

Indicate the total number of adjusting journal entries that were posted during the fiscal

year in the field provided.

AR03

The District transferred monies only between funds listed in the

USFR §III Chart of Accounts–Authorized Transfers.

•

Sample transfers to determine they were allowable. Fund transfers- in should be

coded under other financing sources object code 5200. Fund transfers-out should be

coded under other financing uses object code 6930 or other financing uses object

code 6910 when transferring to the Indirect Cost Fund. For each operating fund

transfer-in, there should be a corresponding fund transfer-out.

•

Indicate in the comments if the District recorded an unauthorized transfer instead of

making a journal entry to correct an accounting error.

•

Indicate the total number of transfers that were posted during the fiscal year in the

field provided.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 8 of 33

AR04

The District documented and dated a monthly review of financial

transactions the county school superintendent (CSS) initiated (i.e.,

revenue postings or journal entries) for propriety, and properly

researched and resolved any differences.

Determine:

•

The District documented and dated its monthly review of revenue postings and

journal entries the CSS initiated, including documenting the resolution of any

inaccuracies noted in the review. USFR page VI-B-8

•

The reviews were completed by someone independent of recording transactions in

the District’s accounting records.

N/A for Accounting Responsibility Districts.

AR05

The District reconciled cash balances by fund monthly with the CSS

or county treasurer’s records, as applicable, and properly

supported, documented, and dated the reconciliations.

Determine:

•

If the CSS was reconciled to the county treasurer, that the District reconciled its funds’

cash balances to the CSS, researched and resolved any differences, and

documented and dated such reconciliation. USFR page VI-B-8

•

If the CSS was NOT reconciled to the county treasurer or the District had assumed

accounting responsibility, that the District reconciled its funds’ cash balances to the

county treasurer and researched and resolved any differences, and documented and

dated such reconciliation. USFR page VI-B-8

•

The reconciliations to the CSS/county treasurer were completed by someone

independent of recording transactions in the District’s accounting records.

AR06

The District reconciled total revenues, expenditures, expenses, and

cash balances (as applicable) by fund, program, function, and

object code at least at fiscal year-end with the CSS and the

reconciliation was reviewed and properly supported.

Determine:

•

The District’s reconciling differences were researched, resolved, documented, and

dated. USFR page VI-B-8

•

The reconciliations to the CSS were completed by someone independent of recording

transactions in the District’s accounting records.

N/A for Accounting Responsibility Districts.

Cash and revenue–USFR VI-C, F, X-G and X-H

Objective: To determine whether the District maintained controls over cash transactions to safeguard monies, protect employees involved in handling monies from

accusations of misuse, and reduce the risk of theft or loss. Test work for cash and revenue should document how the processes work, employees involved in those

processes, and how the processes were verified.

FY24 #

Question

Review procedure

CR01

The District maintained only authorized bank accounts as listed in

the USFR and did not have any inactive bank accounts.

Discuss with the District and obtain bank statements for all bank accounts the District

has access to and determine the District included the activity of all identified bank

accounts in its accounting records.

In the comments, list all bank accounts that are not authorized in the USFR or that are

inactive, indicating the account name, June 30 balance, purpose, and active or inactive

status.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 9 of 33

CR02

The District used an M&O Fund revolving bank account in

accordance with A.R.S. §15-1101.

Determine:

•

The M&O Fund revolving bank account was maintained at an allowable amount,

approved by the governing board, and operated by the District on an imprest basis.

•

All reimbursements for revolving bank account expenditures were made by June 30

so that expenditures were reported in the proper accounting period.

•

The expenditures were only for immediate cash outlay.

•

The District refrained from paying taxable travel reimbursements, salaries, and wages

from the account.

CR03

The District used miscellaneous receipts clearing bank account(s) in

accordance with A.R.S. §15-341(A)(20).

Determine:

•

Disbursements were made only by electronic payment or check payable to the county

treasurer at least monthly.

•

The account was cleared at year-end to ensure revenues were recorded in the proper

accounting period.

For deficiencies, describe in the comments any months where the disbursements were

not completed versus completed late and the uncleared account balance at year-end, if

applicable.

CR04

The District used a Food Service Fund clearing bank account(s) in

accordance with USFR page X-F-5 and Arizona Attorney General

Opinion I60-35.

Determine:

•

Disbursements were made only by electronic payment or check payable to the county

treasurer at least monthly.

•

The account was cleared at year-end to ensure revenues were recorded in the proper

accounting period.

For deficiencies, describe in the comments any months where the disbursements were

not completed versus completed late and the uncleared account balance at year-end, if

applicable.

CR05

The District used a Food Service Fund revolving bank account in

accordance with A.R.S. §15-1154.

Determine:

•

The Food Service Fund revolving account was maintained at an amount approved by

the governing board that did not exceed $500 and operated by the District on an

imprest basis.

•

All reimbursements for revolving bank account expenditures were made by June 30

so that expenditures were reported in the proper accounting period.

CR06

The District used an Auxiliary Operations Fund bank account in

accordance with A.R.S. §15-1126.

•

Determine Auxiliary Operations Fund bank account checks were signed by 2

employees designated by the governing board.

•

If the district used petty cash funds, determine the petty cash funds were established

from the Auxiliary Operations Fund in amounts approved by the governing board and

operated on an imprest basis.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 10 of 33

CR07

The Auxiliary Operations Fund bank or treasurer account deposits

included all monies raised in connection with the activities of school

bookstores and athletics. A.R.S. §15-1125

Determine:

The Auxiliary Operations Fund included only monies raised in connection with school

bookstores and athletics, including extracurricular activities fees tax credit monies, if

appropriate. (See CR08)

•

Prenumbered cash receipt forms or tickets were issued to document cash collected.

•

Daily cash collection summaries were prepared and reconciled to sales

reports/tickets issued.

CR08

The extracurricular activities fees tax credit (tax credit) monies were

included in the Auxiliary Operations Fund or separately accounted

for in an Extracurricular Activities Fees Tax Credit Fund.

A.R.S. §15-341(A)(19) and (20)

Determine extracurricular activities fees tax credit monies were deposited in the Auxiliary

Operations bank account or treasurer’s account, or in a separate tax credit treasurer’s

account.

CR09

The District used the Auxiliary Operations Fund revolving bank

account(s) in accordance with A.R.S. §15-1126.

Determine:

•

Auxiliary Operations Fund revolving bank account(s) were maintained at amounts

approved by the governing board and operated by the District on an imprest basis.

•

All reimbursements for revolving bank account expenditures were made by June 30

so that expenditures were reported in the proper accounting period.

CR10

The District used the Student Activities Fund bank account(s) in

accordance with A.R.S. §15-1122.

Determine Student Activities Fund bank account checks were signed by the student

activities treasurer or assistant treasurer and 1 other person authorized by the governing

board.

CR11

The Student Activities Fund monies were deposited in a bank or

treasurer account designated as the Student Activities Fund

account.

Determine:

•

Student Activities Fund deposits included only monies raised by student clubs and

organizations.

•

Student Activities Fund deposits were properly supported by prepared reports that

reconciled sales to cash collected at student activities events using:

o documented tickets,

o sequentially numbered cash receipts,

o a cash register, or

o a count of items on hand before and after a sale.

CR12

The District used the Student Activities Fund revolving bank account

in accordance with A.R.S. §15-1124.

Determine:

If used, the Student Activities Fund revolving bank account was:

•

Established from the M&O Fund in an amount approved by the governing board and

operated on an imprest basis.

•

Returned to the credit of the M&O Fund at fiscal year-end and all disbursements were

appropriately accounted for in the Student Activities Fund.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 11 of 33

CR13

The District used the federal payroll tax withholdings bank account

in accordance with USFR page VI-H-6.

CR14

The District used the State income tax withholdings bank account in

accordance with A.R.S. §15-1222.

CR15

The District used the employee insurance programs withholdings

bank account(s) in accordance with A.R.S. §15-1223.

CR16

The District used the payroll direct deposits clearing bank account in

accordance with A.R.S. §15-1221.

Determine the account was used only for direct deposit payments to employees’ banks,

which would include amounts withheld for federal savings bond plans. This account

should not accumulate monies and should be maintained at a $0 balance when not

processing payments.

CR17

The District used the electronic payments clearing bank account in

accordance with A.R.S. §15-1221.

Determine the account was used only for making electronic payments to vendors,

including the Arizona State Retirement System (ASRS). This account should not

accumulate monies and should be maintained at a $0 balance when not processing

payments.

CR18

The District used the grants and gifts to teachers bank account

in accordance with A.R.S. §15-1224.

CR19

The District used the principals’ supplies bank account(s) in

accordance with A.R.S. §15-354.

CR20

The use of debit cards was prohibited as a payment method

associated with any District bank account.

•

Scan bank accounts for debit card activity.

•

List all bank accounts with debit cards in the field provided and indicate the total

annual amount of debit card activity.

•

Determine whether the District made cash withdrawals and specify the total amount of

cash withdrawals, if any.

CR21

The District paid bank charges from only the M&O Fund revolving

bank account, Food Service Fund revolving bank account, Auxiliary

Operations Fund bank account, and Auxiliary Operations Fund

revolving bank account(s) or, if not, the bank charges were

reimbursed from an appropriate District fund or bank account.

Sample bank statements to identify any bank charges and determine the charges were

appropriate for the account or were reimbursed to the appropriate fund or bank

account.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 12 of 33

CR22

The District separated responsibilities for cash-handling and

recordkeeping among employees (i.e., receiving, depositing, and

recording revenues), to safeguard monies.

If adequate separation was not possible due to the District’s limited staff size, determine

adequate management review procedures were in place for handling monies related to

bookstores, auxiliary operations, food service, student activities, and miscellaneous

receipts to compensate for employees performing incompatible functions. Determine

cash received was safeguarded in a locked cash drawer, cash register, or other secure

location immediately upon receipt, and access was limited to only those employees

who required access.

CR23

The District supported deposits with issued receipts, cash receipt

summary reports, mail logs, etc., and reconciled sales to amounts

collected with summary reports or ticket logs.

Determine all sampled cash receipt types (e.g., miscellaneous, auxiliary operations,

food service, etc.) were adequately supported. (See example cash receipt forms in

USFR section VI-F and applicable appendix sections.) Student activities deposits should

be addressed on CR11.

The term “cash” includes currency on hand, such as petty cash funds and cash receipts

not yet deposited, and negotiable instruments, such as drafts, checks, warrants, credit

card transactions, and money orders.

CR24

The District’s deposits were made in a timely manner and supported

by deposit slips or other deposit transmittal documentation.

Sample deposits and determine:

•

Cash received was deposited intact daily when significant, or at least weekly. If not,

include number of days until deposited in the deficiency comment.

•

Monies deposited were accompanied by a deposit transmittal form or a treasurer’s

receipt.

•

Validated deposit slips or other evidence indicating the amount and date of deposit

were retained for deposits in District bank accounts or with the county treasurer and

were agreed to applicable bank deposit slips or other deposit transmittal

documentation.

Scan deposits to determine deposit slips are sequentially numbered.

CR25

The District’s deposits with the county treasurer were reconciled.

Determine all validated treasurer’s receipts or revenue posting reports were reconciled

to the accounting records and to copies of deposit transmittals or treasurer’s receipts.

CR26

The District retained supporting documentation for disbursements

from bank accounts.

•

Scan records and determine cash disbursements were made from bank accounts

with sequentially numbered checks or electronic fund transfers.

•

Sample disbursements and determine supporting documentation was retained.

•

Scan bank statements for images of cancelled checks payable to cash or bearer.

CR27

The District safeguarded unused checks.

•

Determine unused checks were stored in a secure location and access to them

limited to only authorized personnel who were not check signers. (Not applicable to

revolving funds as the revolving fund custodian should maintain the checks.)

•

Scan unused check stock to determine the District refrained from presigning blank or

incomplete checks.

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*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 13 of 33

CR28

The District safeguarded signature stamps, signature plates, and

electronic or digital signatures used for approving accounting

transactions, checks, and other District documents to ensure that

access was limited to only the employee whose signature they

represented.

CR29

An employee not involved with cash-handling or issuing checks

reconciled all District bank accounts monthly, and an employee

independent of the cash-handling process reviewed, signed, and

dated the monthly bank reconciliations.

Review a sample of bank account reconciliations and determine reconciliations were

completed timely. If not, indicate which months were not reconciled timely and which

months were not completed at all in the deficiency comment.

If adequate separation was not possible due to the District’s limited staff size, determine

district management established adequate alternate review procedures to control the

risk of unauthorized transactions, and compensate for employees performing

incompatible functions.

CR30

The District tracked and reconciled the number of meals sold to the

total cash collected per day.

Determine the District used a method, such as prepayment accounts, student ID, or

meal tickets to track the number of meals sold, reconciled meals sold to the total cash

collected per day, and researched and resolved any cash overages and shortages.

Supplies inventory–USFR VI-D

Objective: To determine whether the District has controls in place to help physically safeguard and report inventories to prevent theft, overstocking, understocking,

spoilage, and obsolescence.

FY24 #

Question

Review procedure

SI01

The District physically safeguarded supply inventories to prevent

unauthorized use, theft, damage, and obsolescence and enable

accurate financial reporting.

Determine:

•

The District’s process for maintaining supply inventories, such as office supplies, food

service supplies and food, auto parts, and fuel as applicable, was adequate to

safeguard District resources.

•

If a perpetual inventory was maintained, supplies inventory records were investigated

and adjusted to account for significant physical count differences when an actual

physical inventory was performed.

•

Supplies inventory list(s) were maintained that included item and unit descriptions,

purchase document numbers, quantities, unit costs, extended costs, page totals, and

a grand total prepared at the end of each fiscal year for all supplies, including

donated items.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 14 of 33

Property control–USFR VI-E

Objective: To determine whether the District has effective controls to safeguard property from theft and misuse since significant resources are invested in acquiring and

maintaining District property. Test work should be completed on a sample basis annually and documented to ensure that land, buildings, and equipment are properly

valued, classified, and reported on the stewardship and capital assets lists.

FY24 #

Question

Review procedure

PC01

The District maintained a capital assets list that included all required

information listed in the USFR for all land, land improvements,

buildings, building improvements, and equipment with costs that

exceed the District’s adopted capitalization threshold.

Determine:

•

The capital assets list contained all the required information listed on USFR pages

VI-E-4 and 5.

•

The District had a method to track depreciation information that conformed to

Generally Accepted Accounting Principles for all depreciable capital assets.

•

Indicate in the comments the method/program the District used to maintain the

capital assets list (i.e., Visions, Excel, etc.).

PC02

The District had security controls in place to help prevent theft, loss,

unauthorized use, or damage to District property.

Determine security controls were in place based on physical observation of the District’s

premises.

PC03

The District recorded additions including financed assets on the

capital assets list and reconciled capitalized acquisitions to capital

expenditures at least annually.

Determine all capital acquisitions were added to the capital assets list (after all

encumbrances had been included in the accounting records). The District should retain

all related supporting documentation for the life of the asset.

PC04

The District’s stewardship list for items costing at least $1,000 but

less than the District’s capitalization threshold, including financed

assets, included all required information.

•

Determine the stewardship list contained all the required information listed on USFR

page VI-E-5.

•

Indicate the method/program used to maintain the stewardship list (i.e., Visions,

Excel, etc.).

PC05

The District’s capital assets and stewardship items were identified

as District property, properly tagged, and included on the

corresponding list.

Sample 15 items (5 items from the stewardship list, 5 from the capital asset list, and 5

items from the premises), and determine if the identifying number affixed to each of

these 15 items agrees to the information recorded on the corresponding list.

PC06

The District reconciled the current year’s June 30 capital assets list

to the previous year’s June 30 list.

Determine that the capital assets list was updated for audit year acquisitions, transfers,

or disposals.

PC07

The District performed a physical inventory of all equipment at least

every 3 years and reconciled the inventory results to the stewardship

and capital assets lists upon completion.

Determine that a physical inventory of all equipment was completed and reconciled in

the last 3 years and indicate the date the District’s last physical inventory was

performed and reconciled in the fields provided.

•

If the inventory was completed during the audit year, determine the District developed

physical inventory instructions and documented following those instructions.

•

If the inventory was completed during the audit year, determine an employee

independent of capital asset purchasing, custodial, and recordkeeping

responsibilities conducted the inventory or that adequate alternative review

procedures were used to ensure the accuracy of the inventory.

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PC08

The governing board or authorized designee approved stewardship

and capital asset disposals during the fiscal year, and the District

removed the assets from the corresponding list and disposed of

them in accordance with A.A.C. R7-2-1131.

•

Determine the District prepared a request-for-authorization form to dispose of District

property and the items identified for removal or disposal were removed from the

capital assets or stewardship list (see example on USFR page VI-E-18).

•

Indicate the date(s) disposals were approved by the governing board or authorized

designee in the field provided. USFR pages VI-E-10 and 11

Expenditures–USFR VI-G

Objective: To determine whether the District has effective controls for expenditures in place to ensure expenditures are for an allowable District purpose. Test work should

document processes and controls that demonstrate expenditure transactions are properly approved, are for an amount within budget capacity or available cash, and

protect employees from allegations of misuse.

FY24 #

Question

Review procedure

EXP01

The District separated responsibilities for expenditure processing

among employees (i.e., voucher preparation, recordkeeping, and

authorization).

•

Determine responsibilities were separated for expenditure processing among

employees (i.e., voucher preparation, recordkeeping, and authorization).

If adequate separation was not possible due to the District’s limited staff size, determine

whether adequate management review procedures were in place to compensate for

employees performing incompatible functions.

EXP02

The District monitored budget capacity in budget-controlled funds

and cash balances in cash-controlled funds before approving

purchase orders (PO) and authorizing expenditures, except as

authorized in A.R.S. §§15-207, 15-304, 15-907, and 15-916.

Determine the District had procedures to monitor budget/cash balances to prevent

overexpenditures, such as:

• Encumbrance amounts are in place prior to releasing a PO.

• POs were sequentially numbered.

• Blanket POs include a definite time period and specific dollar limit.

• POs are approved by authorized District personnel prior to issuance.

Review the District’s ADE BUDG75 report for M&O and UCO Fund overexpenditures.

List all budget-controlled funds that exceeded their budget limit at year-end and cash-

controlled funds where the District exceeded the cash balance and incurred a cash

deficit at the time of the expenditure, including the overexpenditure or cash deficit

amounts.

EXP03

The District’s expenditures were made only for allowable District

purposes, properly satisfied the specific purposes required for any

restricted monies spent, and were adequately supported by

documentation required by the USFR.

•

Sample expenditures from a variety of District funds and determine the expenditures

were allowable and supported by required documentation, such as receiving reports

that documented the date of receipt, quantity received, and signature of the recipient

for all goods and services received, vendor invoices, and purchase orders to

determine prices and quantities were verified before payments were issued to

vendors.

•

Determine invoices were stamped “paid” or otherwise marked to help prevent

duplicate payments.

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Page 16 of 33

EXP04

The District’s extracurricular activities fees tax credit monies were

expended only for eligible activities that qualified under A.R.S.

§§43-1089.01 and 15-342(24).

Based on a sample of tax credit expenditures, determine tax credit monies were spent

only on activities that qualified under A.R.S. §§43-1089.01 and 15-342(24)

(See the Arizona Department of Revenue’s website for guidance at

https://azdor.gov/tax-credits/public-school-tax-credit).

EXP05

The District’s Student Activities Fund disbursements and transfers of

monies among student clubs were issued only when cash was

available in the student club account and properly authorized by or

on behalf of the student members of a particular club and

documented in the club minutes.

Determine:

•

If any student club accounts had a negative cash balance.

•

Documentation to support that disbursements or transfers were authorized by or on

behalf of the student club was maintained.

EXP06

The District agreed invoice amounts to contract pricing and terms

and conditions for expenditures made through written quotes or

competitively awarded contracts, including cooperative contracts.

For the sample of expenditures in EXP03 and payments related to the procurement type

identified in PRO01 and PRO02, determine the amounts paid agreed to the quote, PO

pricing and terms, or to the contract terms and conditions. If pricing did not agree, the

District should have included an explanation on the documentation (e.g., on the PO or

invoice) that included an authorized reason for the difference or what action was taken

to remedy the difference.

EXP07

The District prepared an Advice of Encumbrance for levy funds

based on the list of liabilities for goods or services received but not

paid for by June 30, including payroll, and filed it with the CSS by

July 18. A.R.S. §15-906 (Districts authorized by A.R.S. §15-914.01 to

participate in the accounting responsibility program should perform

the duties as described in A.R.S. §15-304.)

Review documentation that supported the amounts on the Advice of Encumbrance and

determine it was filed with the CSS as required.

EXP08

The District properly prepared the Career Technical Education

District (CTED) Supplanting worksheet and adequately supported

that monies received from a CTED were used only for career and

technical education and to supplement, rather than supplant, the

District’s base year career and technical education courses. A.R.S.

§15-393

Determine:

•

Monies received as part of CTED funding were used to supplement and not supplant

base year career and technical education courses.

•

The District provided the Work Sheet for Determining Appearance of Supplanting with

CTED Monies to the CTED's Governing Board and ADE as required by A.R.S. §15-393

(D)(7).

EXP09

The District retained fully executed copies of each intergovernmental

agreement (IGA) and payments for services were made or received,

as applicable. A.R.S. §11-952

If the District was a fiscal agent, determine the IGA monies were maintained in the

appropriate fund at the County Treasurer, and a monthly financial report of receipts and

disbursements was provided to participants.

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Travel–USFR VI-I

Objective: To determine whether the District implemented effective controls to ensure employees and governing board members were traveling for District purposes and

travel expenditures and reimbursements complied with the Arizona Department of Administration (ADOA) limits.

FY24 #

Question

Review procedure

TRA01

The District’s travel expenditures (lodging, meals, and incidentals)

and mileage reimbursements were for District purposes and

reimbursed within the maximum reimbursement amounts

established by the Director of the (ADOA) and in accordance with

governing-board-prescribed policies and procedures. Amounts

were reimbursed and reported as a taxable employee benefit if no

overnight stay or no substantial sleep/rest occurred.

•

Sample travel expenditures to determine reimbursements were within allowable

maximums and indicate in the comments the amount of any overpayments.

•

For any lodging reimbursements sampled, determine they were properly supported

by receipts or conference brochures and rates were confirmed by the District prior to

reimbursement.

Credit cards and purchasing cards (p-card)–USFR pages VI-G-15 through 20

Objective: To determine whether the District has implemented effective controls over credit card and p-card purchases to help reduce the risk of misuse and unapproved or

fraudulent transactions.

FY24 #

Question

Review procedure

CPC01

The District used credit cards.

List the number and type of credit cards including store cards and fuel cards in the field

provided.

CPC02

The District used p-cards.

List the number and type of p-cards in the field provided.

CPC03

The District ensured different employees were responsible for

issuing cards; requesting, authorizing, and executing purchases;

and payment processing.

CPC04

The District issued and tracked possession of all District credit

cards and trained employees who make credit card purchases or

process transactions on the District’s policies and procedures.

Determine:

•

The District followed its governing-board-approved credit card policy.

•

The District maintained a complete list/log of card users to track card possession and

personnel for training.

•

Card policies prohibited cash withdrawals and no cash withdrawals occurred.

•

Signed card user agreements were required and retained for all users that outlined

card use policies and procedures, including possible disciplinary actions for misuse.

•

Cards were issued with defined dollar limits based on the card or transaction type.

•

Annual training was supported by a dated employee sign-in sheet or other

documentation that supports each applicable employee’s participation.

CPC05

The District recovered cards immediately from terminated

employees.

Determine whether the District recovered cards from card users who had terminated

employment with the District, if any, during the audit year.

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CPC06

The District’s management periodically reviewed purchases for

unauthorized vendors and purchases over approved limits and/or

purchases that circumvent the procurement rules and District

policies.

Determine District management documented periodic review of credit card purchases

and vendor usage as a fraud risk prevention measure to confirm procurement rules and

District policies were not circumvented.

CPC07

The District ensured someone other than a card user reconciled

credit card and p-card supporting documentation and billing

statements.

•

Determine billing statements were mailed directly to the District office.

•

Scan reconciliations for statements selected in CPC08 for completeness/accuracy

and determine they were completed by someone who was not a card user.

CPC08

The District’s card purchases were only for authorized District

purposes, within the dollar limits authorized for the employee, and

supported by valid receipts or transaction logs that clearly identify

the employee making the purchase.

•

Sample at least 3 monthly credit card/p-card statements in total (including store cards

and fuel cards) from different cards/accounts if the District has more than 1

card/account) and scan the statements for unusual or inappropriate purchases, or

purchases not made within the District’s policies and procedures.

•

From the statements sampled above, select at least 5 individual transactions in total

and review supporting documentation for the purchases.

•

Determine the District verified that goods that were prepaid, such as items purchased

online, by phone, or fax, were received or disputed the charge as appropriate.

CPC09

The District paid credit card and p-card statements before the due

date to avoid finance charges and late fees.

Determine if there were any finance charges or late fees paid. Describe the frequency

and amounts of any finance changes and late fees in the comments.

Procurement–USFR VI-G and A.A.C. R7-2-1001 et seq

Objective: To determine whether the District followed the A.A.C. (School District Procurement Rules) and USFR purchasing guidelines to promote fair and open

competition among vendors that helps ensure the District is getting the best value for the public monies it spends.

FY24 #

Question

Review procedure

PRO01

The District requested at least 3 written quotes for purchases

costing at least $10,000 but less than $100,000 and followed the

guidelines prescribed by the USFR.

Auditors should examine expenditures under $100,000 by vendor or like-items (vendor

total list) and determine the District:

•

Requested and obtained at least 3 written quotes (see USFR pages VI-G-9 & 10).

•

Retained the vendor name, person(s) contacted, telephone number, and price quotes

or results of the request in a procurement file or with the related requisition form or

purchase order.

•

If 3 written quotes were not obtained, the District documented the vendors contacted

and their reasons for not providing quotes and retain this with the procurement file or

related documents.

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PRO02

The District properly procured expenditures that individually or

cumulatively totaled over $100,000.

Auditors should examine expenditures over $100,000 by vendor or like-items (vendor

total list) and discuss with the District the types of procurement performed for the items

and solicitations issued during the year. Based on this analysis and discussion,

determine the population for IFBs or RFPs (PRO04–14 and PRO21) and cooperative

purchases (PRO18-20). Auditors should also consider the procurement for School

Facilities Oversight Board projects, if any.

If the District did not procure an expenditure or maintain documentation for the

procurement, document that deficiency here. The remaining solicitations should be

considered for test work below.

PRO03

The District maintained a list of prospective bidders. A.A.C.

R7-2-1023

Determine:

•

The District compiled and maintained a list of persons who requested to be added to

the District’s list of prospective bidders.

•

The District furnished those bidders with notice of available bids for any applicable

audit year solicitations.

PRO04

The District issued solicitations for invitation for bids (IFB) or request

for proposals (RFP) during the fiscal year.

•

Sample solicitations completed during the FY audited. If the District did not complete

any solicitations during the year, answer this question “No” and questions PRO05–

PRO16 will automatically populate as “N/A.”

•

Sample a specified number of procurements completed during the fiscal year based

on the District’s ADM or determine whether a larger sample is needed:

<1,000 ADM (5); 1,000-5,000 ADM (10); >5,000 ADM (15).

•

Of the total solicitations sampled, at least 40 percent must be for competitive sealed

bids (IFB) and at least 40 percent must be for competitive sealed proposals (RFP),

and as applicable, at least 1 awarded contract should be for traditional construction

(design-bid-build), and at least 1 should be for qualified select bidders list, or

construction-manager-at- risk, design-build, job-order-contracting (PRO11), and

specified professional services (PRO15), as applicable. If the District acted as a lead

district in a cooperative purchase, at least 2 of these contracts should be included in

the sample (PRO21).

•

For all procurement questions, the audit firm must refer to the School District

Procurement Rule(s) cited in the question to determine the District complied with the

specific requirement(s).

•

If the response is “No,” indicate which specific requirement(s) were not complied

with.

PRO05

The District published and, as applicable, provided other adequate

notice of the issuance of solicitations. A.A.C. R7-2-1022,

R7-2-1024(C) or R7-2-1042(C)

PRO06

The District issued solicitations at least 14 days before the time and

date set for bid opening or the closing date and time for receipt of

bids or proposals. A.A.C. R7-2-1024(A) or R7-2-1042(B)

Determine the District documented the specific reason in writing if a shorter time frame

was deemed necessary.

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PRO07

The District included all required content in the solicitation, as

applicable. A.A.C. R7-2-1024(B) or R7-2-1042(A)

Determine the solicitation documentation, including the uniform general terms and

conditions and special terms and conditions, contained all the required content. In

addition, determine whether the District took necessary steps to ensure bidders/offerors

did not violate A.R.S. §15-213(O). A.A.C. R7-2-1024(B)(1)(q) and R7-2-1042(A)(1)(l)

PRO08

The District recorded the time and date that sealed bids or

proposals were received and stored bids or proposals unopened

until the time and date set for opening. A.A.C. R7-2-1029 or

R7-2-1045

PRO09

If the District awarded multiple contracts, it established and followed

procedures for the use and award of multiple contracts. A.A.C.

R7-2-1031(D) and R7-2-1050(C)

Determine the District:

•

Included in the solicitation(s) notification that multiple contracts may be awarded, the

District’s basis for determining whether to award multiple contracts, and the criteria

for selecting vendors for the multiple contracts. A.A.C. R7- 2-1031(C) and R7-2-

1050(B)

•

Documented the specific reason(s) that a single award was not advantageous to the

District and retained documentation that supported the basis for a multiple award.

A.A.C. R7-2-1031(D) and R7-2-1050(C)

•

Limited contract awards to the least number of suppliers necessary to meet the

requirements of the District. A.A.C. R7-2-1031(D) and R7-2-1050(C)

PRO10

The District evaluated bids/proposals and awarded contracts

according to A.A.C. R7-2-1031, R7-2-1032, R7-2-1046(A)(1), or

R7-2-1050 and retained documentation to support the award(s).

Determine:

•

For contracts where only 1 responsive bid or proposal was received, the District

followed the requirements of A.A.C. R7-2-1032 or R7-2-1046(A)(1) and retained

documentation for that determination.

•

For purchases made through an IFB, contracts were awarded to the lowest

responsible and responsive bidders whose bids conformed to the requirements and

evaluation criteria set forth in the IFB. A.A.C. R7-2-1031

•

For purchases made through an RFP, contracts were awarded to the offerors

determined to be the most advantageous, based on the factors set forth in the RFP,

and documentation was retained for the determination. A.A.C. R7-2-1050

PRO11

If the District procured construction projects that used construction-

manager-at-risk, design-build, job-order-contracting, or qualified

select bidders lists to procure construction services, it complied with

the requirements of A.A.C. R7-2-1100 through R7-2-1115.

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PRO12

The District obtained signed procurement disclosure statements for

all procurement consultants, members of a procurement advisory

group, or evaluation committee involved in each specific

procurement process. A.A.C. R7-2-1008

Determine:

•

The Procurement disclosure statement includes the required disclosures described in

A.A.C. R-7-2-1008(C). (These forms are different than the COI forms required by

A.R.S. §§38-502 and 38-503.)

•

The District did not compensate nonemployees who served on procurement advisory

groups or evaluation committees, except for reimbursements allowed by the District’s

travel policy.

N/A if the District did not issue solicitations during the year.

PRO13

The District prepared the applicable written determinations as

required by the specific procurement rule(s). A.A.C. R7-2-1004

For all solicitations sampled in PRO04, determine the District prepared any required

written determinations based on the type of procurement, specifying reasons and how

the written determination was made, and maintained the written determination in the

procurement file.

PRO14

The District followed A.R.S. §15-213 and A.A.C. R7-2-1093 for the

use of multi-term contracts.

Determine:

•

The terms and conditions of renewal or extension, if any, were included in the IFB or

RFP. A.R.S. §15-213(L) and A.A.C. R7-2-1093

•

For materials or services and contracts for job-order-contracting construction services

that were entered into for more than 5 years, the governing board determined in

writing that a contract of longer duration would be advantageous to the District before

the procurement solicitation was issued. A.R.S. §15-213(L) and A.A.C. R7-2-1093

PRO15

The District followed A.A.C. R7-2-1117 through R7-2-1123 for

contracts for specified professional services.

PRO16

The District’s procurement files included the required information, as

applicable. A.A.C. R7-2-1001(97)

Based on the procurement files tested in the questions above and if a response is “No,”

specifically indicate which document was not included in the file. Do not include items

already cited on another question.

PRO17

The District provided training and guidance related to restrictions on

soliciting, accepting, or agreeing to accept any personal gift or

benefit with a value of $300 or more. A.R.S. §15-213(N) and

R-7-2-1003

Determine the District:

•

Provided training and guidance to employees, their supervisors, and others who

participate in the planning, recommending, selecting, or contracting for materials,

services, goods, construction, or construction services of a school district or school

purchasing cooperative.

•

Maintained documentation of the attendees and training date.

Describe in the comments if any gift violations were identified and the District’s actions

to address the violation, if any.

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PRO18

The District used only school district purchasing cooperatives

contracts from cooperatives it was a member of or used only lead

district contracts that it was listed as a member of in the solicitation

or ensured its additional purchases would not have materially

increased the volume stated in the original solicitation. A.A.C.

R7-2-1191 through R7-2-1195

Determine the District:

•

Retained cooperative purchasing agreements on file for each cooperative or lead

district it used.

•

Did not use a cooperative’s or another district’s contract for purchasing goods or

services unless the District was a member or included in the original solicitation or the

District determined its purchases would not have materially increased the estimated

volume stated in the original solicitation.

PRO19

The District performed due diligence to support the use of each

cooperative or lead district contract the District made purchases

from during the audit period. A.A.C. R7-2-1191(D)

•

Indicate the name of each purchasing cooperative/consortium used and also provide

the name of any lead district used by the cooperative/consortium to procure the

contract used by the District.

•

Determine the District’s due diligence process ensured that the cooperative complied

with the A.A.C (School District Procurement Rules). See Procurement FAQs 9 & 10

PRO20

The District prepared written determinations for any specified

professional services, construction, construction services, or

materials purchased through a school purchasing cooperative.

A.A.C. R7-2-1004 and A.R.S. §15-213(B)

For purchases made from a cooperative contract, determine:

•

The District followed its prescribed method and procedures to prepare written

determinations when choosing to use a cooperative contract as required by A.A.C.

R7-2-1004.

•

Each determination specified the reasons for using the cooperative contract,

including how the determination was made, the rationale for the vendor selected, and

how it is advantageous to the district.

PRO21

The District, when acting as a lead district in a procurement,

followed the procurement procedures required for competitive

sealed bidding or competitive sealed proposals, as applicable, and

considered the total estimated volume of purchases for all public

procurement units identified in the solicitation. A.A.C. R7-2-1011

Determine the District:

•

Followed the procurement rules required for IFBs or RFPs as applicable.

•

Identified the total estimated volume of purchases for all public procurement units in

the solicitation. A.A.C. R7-2-1011

Sample at least 2 contracts issued as lead district, if any, and indicate in the comments

the number of contracts the District procured as a lead district and identify the

applicable purchasing consortium or cooperative.

PRO22

For all emergency procurements, the District retained a written

statement documenting the basis for the emergency, the selection

of the particular contractor, and why the price paid was reasonable,

and this statement was signed by the individual authorized to initiate

emergency procurements. A.A.C. R7-2-1055 and R7-2-1056

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 23 of 33

PRO23

The District’s governing board approved all sole-source

procurements before any purchases were made, and the written

determinations were retained in the procurement files. A.A.C.

R7-2-1053 and R7-2-1086

Determine the governing board approved all sole-source procurements prior to making

a purchase or entering a contract and that the written determinations include the

following information required by A.A.C. R7-2-1053.

1. A description of the procurement needed and the reason only a single source was

available, or why no reasonable alternative exists.

2. The name of the proposed supplier.

3. The duration and estimated total dollar values of the proposed procurement.

4. Documentation that the price was fair and reasonable.

5. A description of the efforts made to seek other sources.

PRO24

For any purchase of services from governing board members or

goods or services from District employees, regardless of the

expenditure amount, the District followed the School District

Procurement Rules, except as authorized by A.R.S. §15-323.

Based on discussion with the District and scan of the vendor totals list, identify any

purchases from governing board members or employees and determine if the

purchases were completed appropriately. A.R.S. §38-503(C)

See exceptions in A.R.S. §15-323(B) and (C).

PRO25

The District followed the School District Procurement Rules for

purchases of any supplies, materials, and equipment from

governing board members if the purchase exceeded $100,000 or

followed the guidelines for written quotes if below the threshold.

A.R.S. §38-503(C)

Based on discussion with the District and scan of the vendor totals list, identify any

purchases from governing board members or employees and determine if the

purchases were completed appropriately.

PRO26

For purchases the District made from General Services

Administration (GSA) schedules 70-IT and 84-Law Enforcement, the

governing board first authorized the contracts in writing. A.R.S.

§15-213(K) and A.A.C. R7-2-1196(C)

Determine the governing board minutes included written approval for purchases from a

GSA contract.

Classroom Site Fund–A.R.S. §15-977

Objective: To determine whether the District appropriately spent these State sales tax revenues for teacher pay and programs to support students, such as class size

reduction, dropout prevention, and tutoring, as allowed by law.

FY24 #

Question

Review procedure

CSF01

The District's Classroom Site Fund (CSF) expenditures did not

exceed its Classroom Site Fund Budget Limit (CSFBL).

CSF02

The District adopted a performance-based compensation system

for at least a portion of its CSF monies and ensured CSF

expenditures were made only for allowable purposes listed in A.R.S.

§15-977. See CSF FAQs

CSF03

The District’s CSF monies were used to supplement, rather than

supplant, existing funding from all other sources. See CSF FAQ 3

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 24 of 33

Payroll–USFR VI-H

Objective: To determine whether the District has implemented effective controls to reduce the risks associated with payroll expenditures by documenting evidence of

review, verification, and approval to ensure employees are appropriately compensated.

FY24 #

Question

Review procedure

PAY01

The District’s payroll-processing responsibilities (i.e., adding new

employees, adjusting pay, payroll preparation, payroll authorization,

and warrant distribution) were separated among employees.

•

Determine the District separated payroll-processing responsibilities (i.e., adding new

employees, adjusting pay, payroll preparation, payroll authorization, and warrant

distribution) among employees.

•

If separating payroll processing was not possible due to the District’s limited staff

size, determine management established alternate procedures that adequately

control the risk of unauthorized transactions.

PAY02

The District established a delayed payroll system for hourly

employees that did not delay payments more than 7 business days

during its normal 2-week payroll processing cycle and allowed

adequate time for payroll adjustments to be made, if needed,

between the end of the pay period and the payment date.

Determine the payroll system allowed processing time for any payroll adjustments to be

made between the end of the pay period and the payment date and did not delay

payments more than 7 business days during its normal 2-week payroll processing cycle.

PAY03

The District required employees’ contracts or personnel/payroll

action forms to document the employees’ election for prorated

compensation.

For a sample of employees who elected to have their pay prorated, determine they

completed prorated compensation elections before beginning work and the election

was not changed after work had begun.

PAY04

The District ensured any adjustments to pay for employees who

received prorated wage payments during the year were based on

each employee’s official rate of pay.

For a sample of employees who received a pay adjustment during the year, determine

the District used the employees’ official rate of pay to calculate the pay adjustment.

PAY05

The District ensured hourly employees were not paid for more than

the actual hours worked to date.

•

Determine the District had a procedure in place to review employee hours worked to

identify any overpayments at any point throughout the year.

•

Sample hourly employee payroll payments to determine employees were not paid for

more than the actual hours worked to date.

•

Indicate in the comments the amount of any over/under payments identified

PAY06

The District’s individual personnel files included all appropriate

supporting documentation, as listed on USFR pages VI-H-2

through 4.

For a sample of employee files, determine the files contained all the required

documents. If not, determine the District had a plan to obtain the required documents.

PAY07

The District ensured that valid fingerprint clearance cards were on file

for all required personnel and a method to identify employees whose

cards were going to expire was in place. A.R.S. §§15-512, 15-342

and 41-1750(G)

•

Determine the District had a method to obtain and track employees’ fingerprint

clearance cards and other credentials and monitor expiration dates.

•

Based on the sample in #PAY06 and based on review of the District’s list of

employees requiring fingerprint clearance cards, determine the District maintained

valid fingerprint clearance cards for required personnel.

For deficiencies related to expired cards, describe in the comments the expiration date.

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PAY08

The District enrolled employees who met the ASRS membership

criteria, withheld employee contributions, and in a timely manner

remitted employee and District contributions in accordance with the

ASRS Employer Manual.

PAY09

The District accurately calculated and in a timely manner remitted the

alternative contribution rate payments to ASRS for all applicable

positions filled by ASRS retirees.

(https://www.azasrs.gov/content/alternate-contribution-rate).

For a sample of ASRS retirees employed determine the ACR was accurately calculated

and remitted in a timely manner.

PAY10

The District calculated the accrual and use of vacation, sick leave,

and compensatory time for all employees in accordance with District

accrual rates for specified years of service, maximum amounts to be

accrued, and disposition of accrued time upon separation of

employment following District policies.

Determine the District had a system in place (computer-based program or spreadsheet)

to track employee leave balances for accrual and use of leave and determine accuracy

of that system.

PAY11

Attendance records were prepared for each pay period for each

employee subject to the Fair Labor Standards Act (FLSA) and were

approved by the employee and the employee’s supervisor.

Sample employees subject to FLSA and determine timesheets included the proper

approvals.

PAY12

The District’s payroll reports were properly reviewed and approved

before processing and distribution to employees.

Sample prepayroll registers or payroll registers to determine they were supported by

authorized notifications of:

•

Employment.

•

Terminations.

•

Pay rate changes.

•

Withholding and voluntary deduction authorization forms.

•

Documentation of additional duty pay rate or hours and evidence work was

performed.

•

Work attendance/leave records.

Determine all supporting documents were reviewed and approved before final

completion and warrants and direct deposit amounts were reviewed prior to distribution

to employees.

Indicate in the comments the amount of any over/under payments identified.

Financial reporting–USFR VII

Objective: To determine whether the District properly prepared its financial reports, including its Annual Financial Report (AFR), for the audit year to provide legislative

and oversight bodies, investors and creditors, and the public a transparent view of the District’s financial position and operational results.

FY24 #

Question

Review procedure

FR01

Budgeted expenditures reported on the AFR agreed with the

District’s most recently revised adopted expenditure budget.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 26 of 33

FR02

The District completed and submitted all parts of the AFR reporting

package, including the school-level reporting AFR, using its

accounting data in the files and reported additional information

required in the forms, such as revenue and expenditure amounts that

were not automatically pulled from its accounting and student count

data, and maintained applicable supporting documentation. A.R.S.

§15-904

Determine:

•

The District either did not post transactions or adjusting entries to its accounting

records after using its accounting data to populate the AFR or, if it made adjustments

to its accounting data, the district uploaded new accounting data into its AFR and

notified ADE of the changes and resubmitted its AFR. Audit firms may forgo writing a

deficiency for rounding errors.

•

The District completed and submitted all parts of the AFR reporting package,

including the school-level reporting AFR.

FR03

The District followed the AFR—Review, Submission, and Publication

Instructions.

If no, list the AFR requirements that the District did not complete or complete timely,

such as:

•

Prepared AFR that included all funds.

•

Submitted all AFR forms to ADE by October 15.

•

Submitted a copy of signed cover page to ADE within 5 days of submission.

•

Met publishing requirements for the AFR by November 15.

FR04

The District properly prepared the Food Service page of the AFR and

reported expenditures from the M&O Fund 001 and Capital Fund

610 that agreed with the District’s accounting records.

Determine reported amounts were properly coded and agreed to the District’s

accounting records, including the State match.

FR05

Detailed source documents were traceable to the District’s trial

balance that was used to prepare the financial statements.

Indicate in the comments if significant audit adjustments were made to properly state

current year activity.

FR06

The District’s website included its average teacher salary information

required by A.R.S. §15-903(E) and a copy of or a link to the District’s

page from the most recent Arizona Auditor General District Spending

Report.

FR07

The District submitted the School District Employee Report (SDER)

to ADE, and it was accurate and timely for ADE to calculate the

Teacher Experience Index (TEI). A.R.S. §15-941 and School Finance

Reports | Arizona Department of Education (azed.gov)

Determine:

•

The District had a process to prepare and submit the SDER.

•

Review the SDER and compare with payroll reports to determine full-time equivalents

and salaries were accurately reported.

•

The District filed the SDER report with ADE by October 15, and corrections were

made within the February 1 to March 1 deadline.

FR08

The District submitted its prior year’s audit reports and USFR

Compliance Questionnaire to the CSS and ADE. A.R.S. §15-914(D)

Determine the District:

•

Uploaded its prior year audit reports and USFR Compliance Questionnaire to ADE.

•

Sent a copy of all reports to the CSS.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 27 of 33

Student attendance reporting–ADE’s School Finance External Guidelines

Objective: To determine whether the District has implemented effective controls to report accurate student membership and attendance information to ADE to reduce the

risk that the District received an inappropriate amount of State aid and/or local property taxes.

FY24 #

Question

Review procedure

SAR01

The District’s calendar ensured school was in session for the

required days and offered students the required instructional hours

per grade level, including Arizona Online Instruction (AOI) Programs

as prescribed in A.R.S. §§15-808(J)(1),15-901(A)(1), 15-901.07, and

15-901.08.

Determine the District’s calendar and bell schedule(s) met instructional hour

requirements.

SAR02

If the District had an early (pre-) kindergarten program, the District

calculated and submitted membership information for early (pre-)

kindergarten students’ attendance records for this program only for

students with disabilities. A.R.S. §15-901(A)(1)(a)(i) and USFR

Memorandum No. 175

Sample at least 3 student attendance records. (If a student in the sample was in a virtual

day, the auditors should ensure the student was counted based on the instructional time

model [ITM]).

SAR03

The District appropriately tracked and reported student membership

and absences. A.R.S. §15-901

Sample number of attendance records shown in parentheses based on District’s ADM:

•

For elementary & junior high - <1,000 ADM (5); 1,000-5,000 ADM (10); >5,000

ADM (15).

•

For high school, CTED or AOI - <1,000 ADM (3); 1,000-5,000 ADM (5); >5,000

ADM (7).

(If a student in the sample was in a virtual day, the auditors should ensure the student

was counted based on the ITM.)

SAR04

The District prorated high school students’ membership if enrolled in

less than 4 subjects.

Sample number of attendance records shown in parentheses based on District’s ADM:

•

For high school -<1,000 ADM (3); 1,000-5,000 ADM (5); >5,000 ADM (7).

SAR05

The District was a CTED or CTED member.

If yes, for questions SAR 07 through 11, sample number of students shown in

parentheses based on District’s ADM for high school, CTED, or AOI - <1,000 ADM (3);

1,000-5,000 ADM (5); >5,000 ADM (7).

SAR06

The District had an AOI program. A.R.S. §15-808

If yes, for SAR 12, for Districts offering an AOI Program, based upon sample of (__) AOI

students’ attendance records for 4 weeks: (ADE’s SF-0003-AOI Participation).

Sample number of students’ records shown in parentheses based on the District’s ADM

- <1,000 ADM (3); 1,000-5,000 ADM (5); >5,000 ADM (7).

SAR07

For students enrolled in a program provided by a CTED in a facility

the District owned or operated (satellite programs), the District

reported the actual enrollment for only the District classes the

student was enrolled in at the District’s school (excluding CTED

program classes) under the District’s CTDS number.

Sample number of students shown in parentheses based on ADM for high school,

CTED, or AOI - <1,000 ADM (3); 1,000-5,000 ADM (5); >5,000 ADM (7)

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

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Revised 6/24

Page 28 of 33

SAR08

For students enrolled in a program the CTED provided in a facility

the District owned or operated (satellite programs), the District

calculated student absences in accordance with ADE’s methods

based on the number of District classes the student was enrolled in

and attended at the District’s school (excluding CTED satellite

program classes).

Sample number of students shown in parentheses based on ADM for high school,

CTED, or AOI - <1,000 ADM (3); 1,000-5,000 ADM (5); >5,000 ADM (7)

SAR09

For CTED satellite programs, the CTED reported actual student

enrollment data for only the CTED program classes the student was

enrolled in at that member district’s satellite location (excluding

school district classes). A.R.S. §15-393(O)

Sample number of students shown in parentheses based on ADM for high school,

CTED, or AOI - <1,000 ADM (3); 1,000-5,000 ADM (5); >5,000 ADM (7).

Total membership claimed for the school district and the CTED satellite locations for

each student should not exceed 1.25.

SAR10

For CTEDs that meet for at least 150 minutes (not including any

breaks) per class period on a CTED central campus, the CTED

reported the membership as 0.75. A.R.S. §15-393(Q)

Sample number of students shown in parentheses based on ADM for CTED -<1,000

ADM (3); 1,000-5,000 ADM (5); >5,000 ADM (7) for students enrolled in a CTED course

provided at a qualifying centralized or leased centralized campus.

SAR11

For students enrolled in both District and in CTED central program

courses, the sum of the ADM was no more than 1.75 and the

amount claimed by either entity was no more than 1.0. A.R.S.

§15-393(Q)

Sample number of students shown in parentheses based on ADM for high school -

<1,000 ADM (3); 1,000-5,000 ADM (5); >5,000 ADM (7).

SAR12

The District maintained appropriate documentation and accurately

reported students enrolled in CTED programs, including accurately

submitting scheduled hours of instruction and community college

credits. A.R.S. §15-393

Sample number of students enrolled in a CTED shown in parentheses based on

District’s ADM for high school -<1,000 ADM (3); 1,000-5,000 ADM (5); >5,000 ADM (7).

Determine if the reported total scheduled hours of instruction and/or total community

college credits enrolled agreed to the supporting course enrollment documentation.

SAR13

The District maintained appropriate documentation and accurately

reported students enrolled in its AOI program, including

redetermining the actual full time equivalent (FTE) for each student

enrolled in an AOI program following a student’s withdrawal or after

the end of the school year. A.R.S. §15-808

Sample number of students’ records shown in parentheses based on the District’s ADM

- <1,000 ADM (3); 1,000-5,000 ADM (5); >5,000 ADM (7) and determine the District

maintained the students’ intended FTE Enrollment Statement and guardian-approved or

District computer-generated daily log describing the amount of time spent by the

student on academic tasks that agreed to the hours reported to ADE.

*ADE guidance advises that A.R.S. §15-901 be used to determine the FTE for students

in 7th and 8th grade.

SAR14

The District ensured the student’s name in the student management

system matched the name on the legal document on file. A.R.S.

§15-828(D)

For questions 13-19, sample the number of entries and withdrawals shown in

parentheses based on District’s ADM -<1,000 ADM (5); 1,000- 5,000 ADM (10); >5,000

ADM (15).

SAR15

The entry date in the computerized attendance system agreed to

the entry form.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 29 of 33

SAR16

The student membership begins on the first day of actual

attendance or, for continuing/pre-enrolled students, the first day that

classroom instruction was offered, provided that the students

actually attend within the first 10 days of school. ADE’s External

Guideline GE-17 First Day Absence

SAR17

The District obtained and maintained verifiable documentation of

Arizona residency for enrolled students, including students in its AOI

program. A.R.S. §15-802(B)(1) and ADE’s Updated Residency

Guidelines

Determine A.R.S. §15-802(B)(1) and ADE’s Updated Residency Guidelines were

complied with, except as noted in A.R.S. §15-828(I).

SAR18

The District prepared and retained the Official Notice of Pupil

Withdrawal form for each withdrawal, and the forms were signed by

a District administrator. A.R.S. §15-827

Determine the withdrawal date in the District’s computerized attendance system agreed

with the withdrawal date on the official form.

SAR19

The District counted students withdrawn for having 10 consecutive

unexcused absences in membership only through the last day of

actual attendance or excused absence. A.R.S. §15-901(A)(1)

SAR20

The District uploaded membership and absence information to ADE

that agreed to the District’s computerized system records for the

first 100 days of school. A.R.S. §15-901

Determine the District submitted the AzEDS ADM15 or ABSATT10 reports, as applicable

to ADE electronically at least once every 20 school days for membership information

and at least once every 60 days for absence information through the last day of

instruction. For an AOI program, sample year-end attendance information.

SAR21

The District excluded nonresident students from the District’s

student count and State aid calculations and charged tuition as

applicable. A.R.S. §15-823(G) and (L)

Discuss with the District their process to identify nonresident students.

SAR22

The District reported students who completed all high school

requirements with the applicable graduation code and used the

appropriate year-end status code for all other students.

For a sample of all students, determine graduation and year-end codes were correct

based on ADE’s Pupil Withdrawals.

SAR23

For students participating in distance learning, the District followed

attendance procedures defined in a governing-board-adopted ITM.

Determine the District followed the ITM it submitted to ADE via the ITM submission link.

Students selected for test work should be tested based upon the ITM that was

effective for that time period. ITM template and FAQ

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 30 of 33

Information technology (IT)–USFR IX

Objective: To determine whether the District adopted an information technology (IT) security framework that aligned with credible industry standards and implemented

controls that provide reasonable assurance that its data is accurate and reliable and protected from unintended exposure and consequences. Test work should determine

that the District adopted a framework and controls were operating to protect District and student data.

FY24 #

Question

Review procedure

IT01

The District maintained adequate separation of duties in its IT

systems that prevented 1 employee from completing a transaction

without additional review and approval procedures.

•

Scan the District user system access reports and determine the District adequately

separated responsibilities among staff for administration, authorization, and

operational responsibilities within the separate business systems (i.e., financial

accounting system, student attendance system, student payment systems, network,

and website) and limited employee access to only those business functions or

software necessary to perform their job function. If this was not possible due to the

District’s limited staff size, determine adequate management review procedures were

in place. See IT FAQ 2.

•

If there were incompatible duties or employees with superuser access, indicate in the

comments what systems employees had inappropriate access to and what, if any,

steps were taken to mitigate the risks of unauthorized changes. See IT FAQ 5.

IT02

The District reviewed and documented any system or software

changes implemented.

Scan the District’s procedures and documentation to confirm any modifications to

system hardware or software were authorized by a supervisor and were appropriate.

See IT FAQs 1, 4, & 15.

IT03

The District assessed security risks for its systems and data,

implemented appropriate controls to address risks, and provided

employees/contractors annual security awareness training.

Determine the District:

•

Assessed the risks to District systems and data and implemented procedures to

prevent and detect technology-related threats, such as risks to its systems, network,

and data through email, internet use, social media, VPN, wireless access, and mobile

devices. See IT FAQs 17 & 19.

•

Classified data by its sensitivity level and protected sensitive and confidential data.

See IT FAQ 11.

•

Provided employees/contractors security awareness training at least annually that

addressed prevention and detection of technology-related threats (i.e., phone and

email phishing, website and ransomware attacks, and data breaches), and detailed

instructions regarding how to prevent, identify, and report suspected security risks

and incidents. See IT FAQ 6.

•

The District maintained evidence of training for those who attended the annual

security awareness training including the training date(s). See IT FAQ 6.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

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IT04

The District immediately and appropriately modified terminated or

transferred employees’, contractors’, or vendors’ access to all

District systems.

•

Determine the District has a documented process for modifying or removing user

access from all systems (e.g., financial accounting system, student information

system, District’s network, etc.). See IT FAQ 4.

•

Scan the current list of contractors or vendors and transferred or terminated

employees and determine that access to District systems had been appropriately

modified or removed.

IT05

The District’s computer network, system software, and hardware

was physically protected from unauthorized access, theft, and

environmental hazards.

•

Determine the District has physical access controls over sensitive areas such as

server rooms or communication closets. See IT FAQs 5 & 13.

•

Determine the District has implemented port security to prevent unauthorized users

from accessing the network. See IT FAQ 13.

IT06

The District scheduled and performed data backup-control

procedures for all critical systems at least daily, or more frequently,

to ensure uninterrupted operations and minimal loss of data.

Determine system backup procedures included:

•

Test of backup reliability and integrity.

•

Backup copies were stored in separate facilities or fire-rated container.

•

Backups were scheduled for a defined time/period. See IT FAQ 7.

IT07

The District routinely completed software and application updates

and operating system patches when they became available.

Determine the District’s process and documentation that software (including anti-virus,

anti-spyware, and anti-malware software) and applications were updated, and operating

system patches were completed timely. In addition, determine systems were up-to-date

to adequately protect the integrity and reliability of the District’s data (i.e., web-based

applications, accounting, student attendance, and payroll systems). See IT FAQ 16.

IT08

The District had cloud computing, digital learning, and vendor

contracts or data-sharing agreements in place with any 3rd parties

accessing or hosting District data that addressed controls to

support security and processing integrity, and backup procedures if

applicable, before data was accessed/shared.

Determine the District’s cloud computing, digital learning, and vendor contracts or data-

sharing agreements had appropriate security/access, processing, and backup controls

in place. In addition, determine the District appropriately reviewed data accessed or

processed by vendors or 3rd parties for propriety. See IT FAQ 18.

IT09

The District ensured changes to data in business (i.e., employee

information, pay rates) and IT (i.e., user roles, access rights)

systems were approved by an authorized individual prior to

processing changes.

Determine changes to data were reviewed and approved by a designated employee to

ensure the validity, completeness, and accuracy of processed data, and if issues were

noted, corrective action was taken. See IT FAQ 1.

IT10

The District enforced data security policies related to passwords

and user authentication that aligned with credible industry

standards.

Determine the District:

•

Followed a password policy that required strong passwords, screen locks, repeated

failed sign-on attempt lockouts, and prohibited sharing of user IDs and passwords

along with more modern controls to authenticate user identities. See IT FAQ 14.

•

Required multifactor authentication for at least all employees/contractors with

remote access, administrative access, and all users with access to critical IT

systems. See IT FAQ 19. If any critical IT systems are not capable of implementing

multifactor authentication, determine the District had compensating controls in place

to adequately secure those IT systems and related data.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 32 of 33

IT11

The District’s IT systems generated electronic audit trail reports or

change logs with information about electronic transactions that the

District reviewed or analyzed regularly to determine transactions’

propriety.

If a District IT system does not provide an electronic audit trail function, determine the

District documented a process that allowed it to audit transactions. See IT FAQ 12.

IT12

The District monitored and reviewed IT system-generated incident

or error reports to identify network security threats or other unusual

activity and addressed noted issues.

Determine the District had procedures to investigate and respond to activities identified

in the audit event/trail function such as repeat failed logons, or failed access attempts

related to information systems; administrative privilege usage, employee credential

usage, or third-party credential usage; or suspicious network activity. See IT FAQ 12.

IT13

The District had incident response/contingency planning documents

in place to restore or resume system services in case of disruption

or failure that were reviewed and tested at least annually.

Determine:

•

The District had planning documents that included the date and method the District

used to review the plan (i.e., walkthroughs, tabletop discussion/simulations, full

interruption , or other method) and maintained evidence of the procedures used,

such as screenshots of tests, backups run, and minutes from meetings to document

procedures performed to test plans. See IT FAQ 10.

•

The plan was tested at least annually to ensure employees/contractors understand

their responsibilities, identify internal and external vulnerabilities, and take action to

update equipment or remedy any issues identified since the last review. See IT

FAQs 7 – 10.

(If the District used a third-party vendor for IT support, the District should still have a

District-level plan to activate the recovery or contingency plan that is tested at least

annually.)

Transportation support–ADE’s SF-0002 Transportation Guidelines

Objective: To determine whether the District has implemented effective controls for its transportation program to ensure it properly reports its transportation miles and

student riders to ADE, which helps to ensure the District receives the appropriate amount of State aid.

FY24 #

Question

Review procedure

TS01

The District accurately calculated and maintained documentation for

miles and students reported on the Transportation Route Report

submitted to ADE. A.R.S. §15-922

Based on ADE’s Transportation Guidelines, determine the District accurately reported

the number of miles and eligible students transported.

Indicate in the comments any net under/overstatement of miles and/or students

reported and whether the over/understatement impacted the District’s funding.

Uniform System of Financial Records for Arizona School Districts (USFR) Compliance Questionnaire

*This questionnaire must be used for fiscal year (FY) 2024 audits and thereafter.

Arizona Auditor General

Revised 6/24

Page 33 of 33

Records management–USFR X-E

Objective: To determine whether the District has implemented effective controls to properly protect and maintain its records, including student and employee data, and

that its records were disposed of securely and in accordance with established time frames.

FY24 #

Question

Review procedure

RM01

The District established and followed policies and procedures to

properly protect, maintain, and dispose of personally identifiable

information and confidential records, such as student and employee

information and social security numbers.

Determine the District’s records were properly protected, maintained, and disposed of in

accordance with the General Retention Schedules for Education K-12 published by the

Arizona State Library, Archives and Public Records. Retention Schedules | Arizona State

Library (azlibrary.gov)

General long-term debt–Arizona Revised Statutes Title 15, Chapter 9, Article 7

Objective: To determine whether the District is following the laws related to bonds to ensure voters are informed and the District complies with the bond covenants.

FY24 #

Question

Review procedure

GLTD01

The District calculated and issued any bonds in accordance with

Arizona Revised Statutes and the Arizona Constitution. A.R.S.

§15-1021

GLTD02

The District expended bond proceeds only for voter-authorized

purposes and not for items with useful lives less than the average

life of the bonds issued or 5 years. A.R.S. §15-1021(F)

Sample expenditures made from bond proceeds to determine if expenditures were

appropriate and meet the useful life definition.

GLTD03

If the District had outstanding bonded indebtedness and a balance

remained in the Bond Building Fund after the acquisition or

construction of facilities for which the bonds were issued, the

governing board transferred the remaining balance to the Debt

Service Fund. Otherwise, if the District had no outstanding bonded

indebtedness and a balance remained in the Bond Building Fund

after the acquisition or construction of facilities for which the bonds

were issued, the governing board used the remaining balance to

reduce taxes. A.R.S. §15-1024(B)

GLTD04

The District credited interest or other money earned from investing

bond proceeds to the Debt Service Fund unless the voters

authorized the interest to be credited to the Bond Building Fund or

federal laws or rules require the interest to be used for capital

expenditures. A.R.S. §15-1024(C)