FINDING - The District did not comply with Federal regulations by maintaining property records to identify the location of equipment funded by the ESF Program, resulting in questioned costs totaling $2,186,066.
CRITERIA - Title 2, Section 200.313(d)(1) and (2), Code of Federal Regulations (CFR), requires that property records for equipment be maintained that include various details, such as a descriptions of the property; an identification number; the source of funding for the property (including the Federal award identification number); the location, use, and condition of the property; and any ultimate disposition data including the date of disposal and sales price of the property. Additionally, a physical inventory of the property must be conducted and the results must be reconciled with the property records at least once every 2 years.
Title 2, Section 200.1, CFR, defines equipment as tangible personal property, including information technology systems, having a useful life of more than 1 year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization threshold established by the District or $5,000. According to Board Policy 7450 - Property Inventory, the Superintendent must maintain an adequate and accurate record of all tangible personal property with a value or cost of $1,500 or more.
CONDITION - During the 2020-21 through 2023-24 fiscal years, District ESF Program expenditures totaled $14,293,633, including $2,186,066 for capitalized equipment with a value or cost of $1,500 or more. Although we requested, District personnel could not provide any property records that identified the equipment identification number, source of funding, condition, location, or otherwise properly account for the items. Moreover, the District did not conduct physical inventory procedures during the 2022-23 or 2023-24 fiscal years.
CAUSE - According to District personnel, due to staff turnover, the property records were not consistently maintained and the physical inventory was not recently conducted.
EFFECT - Without effective accountability over equipment purchased with Federal funds, including the maintenance of appropriate property records and periodic physical inventories, there is an increased risk that the equipment may be used for unauthorized purposes. Absent required property records, ESF Program moneys for equipment acquisitions totaling $2,186,066 represent questioned costs.
RECOMMENDATION - The District should establish effective accountability over equipment purchased with Federal funds. Such accountability should include the maintenance of required property records based on Federal equipment acquisitions, the conduct of a physical inventory of the equipment, and a reconciliation of the inventory results with the property records at least once every 2 years. In addition, for any unlocated ESF Program equipment items, the District should restore to the FDOE the related questioned costs and contact applicable law enforcement agencies regarding necessary actions to help recover the unlocated equipment.
DISTRICT RESPONSE - The District has designated a team from the finance department and operations/maintenance to review and update procedures to account appropriately for the equipment/inventory. These procedures will include a comprehensive inventory count no less than every two years that will be reconciled to records maintained within the District's financial management software.
FINDING - The District did not comply with Federal regulations by maintaining property records to identify the location of equipment funded by the ESF Program, resulting in questioned costs totaling $2,186,066.
CRITERIA - Title 2, Section 200.313(d)(1) and (2), Code of Federal Regulations (CFR), requires that property records for equipment be maintained that include various details, such as a descriptions of the property; an identification number; the source of funding for the property (including the Federal award identification number); the location, use, and condition of the property; and any ultimate disposition data including the date of disposal and sales price of the property. Additionally, a physical inventory of the property must be conducted and the results must be reconciled with the property records at least once every 2 years.
Title 2, Section 200.1, CFR, defines equipment as tangible personal property, including information technology systems, having a useful life of more than 1 year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization threshold established by the District or $5,000. According to Board Policy 7450 - Property Inventory, the Superintendent must maintain an adequate and accurate record of all tangible personal property with a value or cost of $1,500 or more.
CONDITION - During the 2020-21 through 2023-24 fiscal years, District ESF Program expenditures totaled $14,293,633, including $2,186,066 for capitalized equipment with a value or cost of $1,500 or more. Although we requested, District personnel could not provide any property records that identified the equipment identification number, source of funding, condition, location, or otherwise properly account for the items. Moreover, the District did not conduct physical inventory procedures during the 2022-23 or 2023-24 fiscal years.
CAUSE - According to District personnel, due to staff turnover, the property records were not consistently maintained and the physical inventory was not recently conducted.
EFFECT - Without effective accountability over equipment purchased with Federal funds, including the maintenance of appropriate property records and periodic physical inventories, there is an increased risk that the equipment may be used for unauthorized purposes. Absent required property records, ESF Program moneys for equipment acquisitions totaling $2,186,066 represent questioned costs.
RECOMMENDATION - The District should establish effective accountability over equipment purchased with Federal funds. Such accountability should include the maintenance of required property records based on Federal equipment acquisitions, the conduct of a physical inventory of the equipment, and a reconciliation of the inventory results with the property records at least once every 2 years. In addition, for any unlocated ESF Program equipment items, the District should restore to the FDOE the related questioned costs and contact applicable law enforcement agencies regarding necessary actions to help recover the unlocated equipment.
DISTRICT RESPONSE - The District has designated a team from the finance department and operations/maintenance to review and update procedures to account appropriately for the equipment/inventory. These procedures will include a comprehensive inventory count no less than every two years that will be reconciled to records maintained within the District's financial management software.