Condition: Equipment records do not include the source of funding which includes the federal award identification number, who holds the title, the federal participation rate, and the location, use and condition of the asset to be in accordance with the Uniform Guidance. Cause: This condition appears...
Condition: Equipment records do not include the source of funding which includes the federal award identification number, who holds the title, the federal participation rate, and the location, use and condition of the asset to be in accordance with the Uniform Guidance. Cause: This condition appears to be the result of a lack of internal controls designed to ensure compliance with Uniform Guidance. Auditor Recommendation: We recommend that the District develop policies to ensure that assets acquired with federal funds are properly identified in capital assets records. Plan of Action: The District's plan is a two-pronged approach to ensure that appropriate policies and procedures are in place and that recoding assets whose resources include federal funds will clearly indicate the federal award identification number, who holds the title, the participation rate, the location, use, and condition that the asset is to be put to in accordance with uniform guidance. A. The District will implement a robust Capital Asset Policy to be reviewed and approved by the District's Board of Directors, Standard Operation Procedures will accompany the policy and there will be the standard guidelines in which all capital assets will be treated, regardless of where the funding resources are generated from. B. The District plans to use its accounting software, SAGE 50, and capital asset software, FAS, to document funding resources, which should include all the required information as noted in Uniform Guidance. Additionally, capital asset invoices will include proper documentation showing the funding resources and required information. Date of implementation: Corrective actions began in October 2025 and are being implemented through June 2026. In October 2025, the District developed standardized documentation to accompany capital asset acquisitions and disposals to ensure required funding source information and asset details are consistently recorded. Beginning July 1, 2025, the District began using its accounting software (SAGE 50) to track purchases funded with State or Federal sources. The Finance Department will apply this procedure to earlier capital asset records as time permits in order to improve the completeness of historical records. On February 25, 2026, the District's Board of Directors formally reviewed and approved the District's Capital Asset Policy, which establishes consistent requirements for identifying, tracking, and reporting capital assets regardless of funding source. Supporting written procedures and process documentation are being finalized and are expected to be completed by June, 30, 2026.