Audit 375239

2023-004: Education Stabilization Fund (ESF) Equipment Inventory Federal Agency: U.S. Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425D & 84.425U Federal and State Award Identification Number and Year: S425D200043 - 2020, S425D210043 – 2021 & S425U210043 - 2021 Pass-Through Agency: Idaho Department of Education Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of equipment management. These provisions require maintaining records of the property purchased including but not limited to source of the funding for the property, acquisition date and cost. The District should have internal controls designed to ensure compliance with those requirements. Condition: During our testing, the District maintenance documentation did not include the source of the funding for the property. Thus we were unable to verify any equipment inventory from prior years. Questioned costs: None Context: There were a total of 26 equipment expenditures made with ESSER grants under the ESF program in the current year that would be subject to the equipment requirement. Cause: The District had turnover in several key areas and lacked formalized, documented procedures and controls over inventory maintenance record documentation requirements. Effect: The District was unable to provide documentation of compliance with the equipment requirements of the ESSER grant. Repeat Finding: No. Recommendation: We recommend the District design controls to ensure that equipment requirements for federal grant programs are met and documented. Views of responsible officials: There is no disagreement with the audit finding. All federal programs will have a federal programs director/coordinator and the Business Office will work closely with the federal programs director/coordinator to ensure that all federal compliance measures are met. The Business Office will develop and implement an accurate inventory tracking system for items purchased with federal funds. The board will review board policy to ensure it meets the uniform guidance as required for purchasing equipment with federal funds. Inventory records will be maintained by the federal program director and shared in entirety at the end of each fiscal year with the business manager. The business manager will review the inventory for accuracy and completeness. Inventory record management must track at a minimum the following: description of item, serial number or other identifying numbers, funding source, acquisition date, cost of the item, location of the item, disposal date and useful life. The tagging system will be developed to accurate track each inventory item within the district.

Federal Agency: U.S. Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425D & 84.425U Federal and State Award Identification Number and Year: S425D200043 - 2020, S425D210043 – 2021 & S425U210043 - 2021 Pass-Through Agency: Idaho Department of Education Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or specific requirement: Elementary and Secondary School Emergency Relief Fund (ESSER) grantees must submit an annual performance report. Subrecipients are to submit their data to the State Department of Education. The District should have internal controls designed to ensure compliance with those requirements. Condition: During our testing, the District was unable to provide copies or documentation of the required annual performance reports being submitted to the State Department of Education. Questioned costs: None Context: There were a total of three ESSER grants under the ESF program that required submission of the annual performance reports which District was unable to provide copies or documentation of the submission. Cause: The District had turnover in several key areas and lacked formalized, documented procedures and controls over reporting requirements. Effect: The District was unable to provide documentation of compliance with the reporting requirements of the ESSER grant. Repeat Finding: No. Recommendation: We recommend the District design controls to ensure that reporting requirements for federal grant programs are met and documented. Views of responsible officials: There is no disagreement with the audit finding. All federal programs will have a federal programs director/coordinator and the Business Office will work closely with the federal programs director/coordinator to ensure that all federal compliance measures are met. A calendar of all federal reporting requirements will be developed and maintained. This calendar will be reviewed monthly to ensure all federal compliance timelines are met. A federal program grant activity report will be shared monthly with the district leadership team. This report will keep financial monitoring to the forefront of the leadership team. All federal program reporting will be reviewed with the Business Office prior to submission. Business Office will complete federal program management and reporting training by December 31st by working with the federal program specialists at the State Department of Education and reading and retaining for future reference any grant specific guidance.