Audit 392859

IDEA Equipment Management Program - Special Education Cluster (IDEA), Assistance Listing Numbers 84.027A, 84.173A. Criteria or Specific Requirement - Federal regulations outlined in 2 CFR 200.313 and the Compliance Supplement, as amended by the State of Tennessee Department of Education, require that equipment purchases in excess of $5,000 (or more than $100 if the item is considered sensitive minor equipment) be properly accounted for and tracked by the entity if funded by Federal grants. Specifically, property records must be maintained that includes a description of the property, a serial number or other identification number, the acquisition date, cost of the property, the location, use and condition of the property, and any ultimate disposition of the property. Condition - During our single audit testing, we noted various instances where School equipment was not being tracked properly. Issues included equipment not being entered into the system with a correct value, not receiving an asset tag, or not being tracked accurately as to its location. Cause and Effect - The issue resulted from inconsistent execution and monitoring of existing equipment inventory procedures, which affected the completeness and accuracy of information recorded in the equipment management system. The effect was immaterial noncompliance with equipment management required under Uniform Guidance. Questioned Costs - None Context - We tested 40 current year property acquisitions during our audit. In that sample size, seven were not recorded accurately as to cost due to shipping or discounts. In addition, one item did not have an asset tag or serial number listed. We also selected 50 inventory items to test. Of these selections, 16 items were in a different location than where the system said they were supposed to be and not able to be counted or not able to be counted. Recommendations - The Schools need to strengthen oversight and monitoring to ensure existing inventory procedures for IDEA funded equipment are fully and consistently followed. Management’s Response - We concur. Oversight and monitoring will be strengthened by undertaking a new inventory and a departmental restructure for improving management of items purchased with Federal IDEA grant funds.