Audit 408445

Criteria 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards require compliance with the provision 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 no equipment expenditures made with ESSER grants under the ESF program in the current year that would be subject to the equipment requirements. Cause The District had turnover in several key areas and lacked formalized, documented procedures and controls over inventory maintenance record documentation requirements. Potential effect of Condition The District was unable to provide documentation of compliance with the equipment requirements of the ESSER grant. Recommendation We recommend the District design procedures and controls to ensure that equipment requirements for federal grant programs are met and documented. Management’s Response The District concurs with the audit finding and is taking immediate steps to strengthen internal controls regarding federal equipment inventory. The following corrective actions will be implemented: • Collaboration & Compliance: The Business Office is currently working closely with the Federal Programs Director/Coordinator to ensure all federal compliance measures are rigorously met. • Inventory Tracking System: The Business Office has developed and implemented a robust inventory tracking and asset-tagging system to accurately monitor all items purchased with federal funds. At a minimum, the system will track item descriptions, physical locations, useful lives, and disposal dates. • Policy Review: The Board of Trustees will review and update current board policy to ensure full alignment with Uniform Guidance procurement and equipment standards. • Annual Oversight: The Federal Programs Director will maintain all inventory records and provide them in their entirety to the Business Manager at the end of each fiscal year. The Business Manager will conduct a comprehensive review of these records to verify accuracy and completeness.