Audit 390690

Significant Deficiency 2025-001. Equipment and Real Property Management United States of Education, Passed-through New York State, Department of Education: Special Education Cluster Special Education Grants to States: IDEA Part B ALN: 84.027 Special Education Preschool Grants: IDEA Preschool ALN: 84.173 Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records 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 (FAIN), and who holds title. In addition, it requires the District to track the acquisition date and 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 sale price of the property. Condition: The District did not include, as additions in the District’s capital assets inventory records, all equipment purchased with federal awards. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have procedures in place to timely review and reconcile the District’s purchases posted to the equipment codes to the annual capital assets additions in the inventory records, equipment purchased with federal awards was inadvertently omitted from the current year capital assets inventory. Effect: The inability to include and differentiate capital assets acquired with federal awards in the capital assets inventory records could lead to improper procedures for tracking and disposal of those capital assets. Questioned Costs: Dollar amount undetermined, as adequate documentation was not available. Context: The District rarely uses federal awards for the purchase of equipment. As a result of this, when District staff was compiling the listing of equipment purchased during the year, to be provided to the District’s third-party capital assets management company, the equipment purchased using federal awards was inadvertently omitted from the listing. Identification of a Repeat Finding: This is a repeat finding from the previous year audit, 2024-001 in connection with audit of the Education Stabilization Fund awards expended, ALN: 84.425D, ALN: 84.425U, and ALN: 84.425W. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually for all equipment expenditures with the additions to the District’s capital assets inventory. This will ensure that all equipment purchased with federal awards is captured and included in the capital assets inventory records. Additionally, all capital assets additions purchased with federal funds should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with federal awards is identified and included in the District’s capital assets inventory records as part of the capital assets reconciliation process.