Audit 409381

2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education Workforce for 2 C.F.R. § 200.313(d)(1), which requires that property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including the FAIN), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. 2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education Workforce for 2 C.F.R. §200.313(d)(2), which states, a physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years. Due to a failure of internal controls and lack of review of District policy, the District did not maintain property records for assets acquired under the Education Stabilization Fund – Elementary and Secondary Education that identify all of the property record elements noted per 2 C.F.R. § 200.313(d)(1). Additionally, there was no indication that a physical inventory of the property acquired under the Education Stabilization Fund – Elementary and Secondary Education had been performed within the preceding two years. Failure to maintain property records and perform physical inspections over equipment and real property acquired with federal funds may result in asset misappropriation and a loss of future federal funding. To ensure proper oversight and accountability for equipment and real property, the District should review its policy and verify that property records are maintained in accordance with 2 C.F.R. § 200.313(d). Additionally, physical inventories should be conducted, and the results must be reconciled with the property records at least once every two years.