Audit 361261

U.S DEPARTMENT OF EDUCATION Passed through the N.C. Department of Public Instruction Program Name: Education Stabilization Fund Assistance Listing Numbers: 84.425B, 84.425C, 84.425D, 84.425U, 84.425W Grant Numbers: PRCs 146, 169, 170, 176, 181, 183, 184, 188, 189, 198, 204, 206 MATERIAL WEAKNESS MATERIAL NONCOMPLIANCE EQUIPMENT AND REAL PROPERTY MANAGEMENT Criteria: All fixed assets purchases made by the governmental funds meeting the Board’s capitalization threshold should be properly identified and included in the Board’s fixed asset depreciation records. Also, all fixed asset disposals should be identified and properly removed from the Board’s fixed asset depreciation records. Condition: During our audit of fixed asset records, we determined none of the expenditures meeting the Board’s fixed asset requirements were identified and recorded in the Board’s fixed asset depreciation records. Also, none of the disposals were identified and removed from the Board’s fixed asset depreciation records. Effect: The Board’s governmental fixed assets could be materially misstated if additions and disposals are not properly identified and recorded. Cause: Personnel responsible for maintaining fixed asset records have not received appropriate training in certain areas. Also, disposal procedures are not in place to ensure that appropriate accounting personnel receive necessary information regarding fixed assets that are sold or otherwise disposed. Personnel turnover during the year significantly impacted fixed asset accounting. Recommendation: Personnel should receive adequate training to ensure fixed asset accounting is performed in accordance with accounting policies. Procedures should be developed, as necessary, to ensure that disposals are properly identified and recorded. Views of Responsible Officials and Planned Corrective Action: We agree with this finding. Personnel turnover and a small administrative department provide challenges in performing all accounting functions during the year. The finance officer will review and develop procedures to ensure that all fixed asset additions and disposals are properly identified and recorded.

U.S DEPARTMENT OF EDUCATION Passed through the N.C. Department of Public Instruction Program Name: Education Stabilization Fund Assistance Listing Numbers: 84.425B, 84.425C, 84.425D, 84.425U, 84.425W Grant Numbers: PRCs 146, 169, 170, 176, 181, 183, 184, 188, 189, 198, 204, 206 MATERIAL WEAKNESS MATERIAL NONCOMPLIANCE EQUIPMENT AND REAL PROPERTY MANAGEMENT Criteria: All fixed assets purchases made by the governmental funds meeting the Board’s capitalization threshold should be properly identified and included in the Board’s fixed asset depreciation records. Also, all fixed asset disposals should be identified and properly removed from the Board’s fixed asset depreciation records. Condition: During our audit of fixed asset records, we determined none of the expenditures meeting the Board’s fixed asset requirements were identified and recorded in the Board’s fixed asset depreciation records. Also, none of the disposals were identified and removed from the Board’s fixed asset depreciation records. Effect: The Board’s governmental fixed assets could be materially misstated if additions and disposals are not properly identified and recorded. Cause: Personnel responsible for maintaining fixed asset records have not received appropriate training in certain areas. Also, disposal procedures are not in place to ensure that appropriate accounting personnel receive necessary information regarding fixed assets that are sold or otherwise disposed. Personnel turnover during the year significantly impacted fixed asset accounting. Recommendation: Personnel should receive adequate training to ensure fixed asset accounting is performed in accordance with accounting policies. Procedures should be developed, as necessary, to ensure that disposals are properly identified and recorded. Views of Responsible Officials and Planned Corrective Action: We agree with this finding. Personnel turnover and a small administrative department provide challenges in performing all accounting functions during the year. The finance officer will review and develop procedures to ensure that all fixed asset additions and disposals are properly identified and recorded.