Audit 354523

SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS 2024-005 EQUIPMENT/REAL PROPERTY MANAGEMENT Program: Education Stabilization Fund CFDA Number: 84.425D, 84.425U Federal Agency: U.S. Department of Education Pass-Through Agency: Arizona Department of Education Grantor Number: 21FESSII-111389-01A, 21FESIII-111389-01A Questioned Costs: $-0- Type of Finding: Noncompliance, significant deficiency Compliance Requirement: F. Equipment/Real Property Management Condition/Context: The District did not properly update its capital assets listing to include equipment purchased using Education Stabilization Fund monies. Additionally, the District has not performed a full physical inventory of its assets purchased using federal monies in the two year period ended June 30, 2024. Criteria: The District must follow 2 CFR sections 200.313 which requires that: Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Cause: The District did not have proper internal controls over property and equipment to ensure the capital assets listing was properly updated. Effect: Noncompliance and internal control weakness. The District could inadvertently use an asset outside of its intended purpose and assets could go missing. Repeat Finding: No. Recommendation: We recommend that the District establish proper internal controls over property and equipment to ensure all assets are properly recorded on the District’s capital assets listing and those federal equipment and vehicle are properly tracked and maintained. The District should also complete a full physical inventory and reconcile the results against the asset listings. Views of Responsible Officials: There was no disagreement with the finding. Contact Person: Judy James, Business Manager

SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS 2024-005 EQUIPMENT/REAL PROPERTY MANAGEMENT Program: Education Stabilization Fund CFDA Number: 84.425D, 84.425U Federal Agency: U.S. Department of Education Pass-Through Agency: Arizona Department of Education Grantor Number: 21FESSII-111389-01A, 21FESIII-111389-01A Questioned Costs: $-0- Type of Finding: Noncompliance, significant deficiency Compliance Requirement: F. Equipment/Real Property Management Condition/Context: The District did not properly update its capital assets listing to include equipment purchased using Education Stabilization Fund monies. Additionally, the District has not performed a full physical inventory of its assets purchased using federal monies in the two year period ended June 30, 2024. Criteria: The District must follow 2 CFR sections 200.313 which requires that: Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Cause: The District did not have proper internal controls over property and equipment to ensure the capital assets listing was properly updated. Effect: Noncompliance and internal control weakness. The District could inadvertently use an asset outside of its intended purpose and assets could go missing. Repeat Finding: No. Recommendation: We recommend that the District establish proper internal controls over property and equipment to ensure all assets are properly recorded on the District’s capital assets listing and those federal equipment and vehicle are properly tracked and maintained. The District should also complete a full physical inventory and reconcile the results against the asset listings. Views of Responsible Officials: There was no disagreement with the finding. Contact Person: Judy James, Business Manager