How to Ensure Compliance with the Three Newly Added USFR Questions – Part Two
by Kalkin Stransky, CPA, Audit Manager
Posted on October 6, 2025
The Arizona Auditor General released the USFR Compliance Questionnaire (USFRCQ) for 2024-25 audits on July 23, 2025. The questionnaire contains three new questions that Arizona school districts will be required to be in compliance with…and Arizona auditors will be required to test. See below for further information regarding the new transportation question, what it covers, likely audit requests and examples of sufficient supporting documentation.
Section: Transportation support
Newly added compliance question: TS02 – The District submitted the vehicle inventory report by July 15 to the Superintendent of Public Instruction.
What we have to audit:
- TRAN40-2: Reports the total mileage for the year ending June 30.
- TRAN03-1: Reports the actual odometer reading for each school bus operated by the school district as of June 30.
What we will ask for:
- For all District vehicles, mileage logs for a sample period of time. Consider keeping this in a locked electronic format so it can be easily shared, but not easily edited (manual logs lead to a much higher likelihood of error). Do not overwrite your logs from year to year, but rather create new tabs or versions to keep the data on an ongoing basis. This is best for audit documentation purposes, but also for strategic planning and budgeting.
Example:
- Documentation to support the ending miles reported on the TRAN03-1 report. Audit test work will include sampling the ending odometer reading from the TRAN03-1 for five vehicles and tracing ending miles to supporting documentation. Overall evaluation of the consistency and reasonableness of the vehicle inventory report will also be done.
Example:
- Documentation to show date of submission of TRAN03-1 (vehicle inventory) report. All we will need to see is proof of the report submission date. Verbal confirmation will not be accepted as supporting documentation, so be sure to have some form of records to share, even a screenshot of an email confirming submission would suffice. The TRAN03-1 report must be submitted before July 15th of the audit year.
See ‘How to Ensure Compliance with the Three Newly Added USFR Questions – Part One’ for further information regarding the new property control and general long-term debt questions, what they cover, likely audit requests and examples of sufficient supporting documentation.
For further specific transportation guidance, click here: https://www.azed.gov/sites/default/files/2025/07/School%20Finance%20Manual%20J%20Transportation%207-3-25%20POSTED.pdf
To view the complete USFR Compliance Questionnaire located at the back of the USFR Manual, click here: https://www.azauditor.gov/resources/school-districts/manuals-memorandums
Print-ready version: Click here
