Audit 379321

(#2025-001) Equipment Tracking/Capitalization 84.425U-ARP – ESSER 3 – COVID-19 Year Ended – June 30, 2025 Federal Agency – U.S. Department of Education Criteria – The Uniform Grant Guidance requires that New York State school districts follow formal capitalization procedures. Condition – One purchase of equipment with grant funds was in excess of the capitalization threshold and was not tracked with fixed assets in accordance with the District’s capitalization policy. Cause – The District did not have a process in place to review equipment purchases in all funds to ensure that all equipment purchases exceeding the threshold were capitalized. Effect – The District will not be considered a low-risk auditee for single audit purposes. In addition, the District is not in compliance with its capitalization policy. Question Costs – There were no questioned costs noted related to this finding. Context - This finding was identified during testing of purchases made with grant funds, follow up inquiries of management, and review of the related policies noted above. Recommendation – We recommend the District ensure that assets are properly capitalized when they excess the established threshold. District’s Response Thank you for noting the omission of certain capital assets from the District’s depreciation schedule. Management acknowledges this oversight and appreciates the identification of the issue. To address this matter, the omitted capital assets have been reviewed and recorded on the depreciation schedule to ensure accurate financial reporting. In addition, management will develop and implement a formalized procedure for identifying, recording, and reviewing capital asset activity as it occurs. This procedure will be put into place immediately and will include periodic reconciliation and supervisory review to ensure that all qualifying capital assets are properly captured and depreciated in accordance with applicable accounting standards. Management believes that these corrective actions will prevent similar omissions in the future and strengthen internal controls over capital asset accounting.