Finding No.: 2024-003- Equipment – Material weakness and material non-compliance Federal Agency: Various Program Name: Research and Development Cluster ALN Number: Various Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions with federally acquired research and development equipment must adhere to specific guidelines outlined in 2 CFR 200.313. This regulation mandates that entities conduct bi-annual inventory counts of federally acquired equipment to ensure accurate tracking and accountability. It requires maintaining detailed records of all equipment, including acquisition date, cost, location, and current status, to reflect any changes or discrepancies following each inventory count .Additionally, the regulation specifies procedures for the appropriate disposal of federally acquired equipment that is no longer needed or has reached the end of its useful life. Entities must request disposal instructions from the federal awarding agency and ensure that disposal methods comply with federal regulations, including obtaining necessary approvals and documenting the disposal process.Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance withthe guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found During our audit, we sampled and tested the equipment listing and discovered that 1 out of 11samples selected for testing could not be located while on site at Union College as the equipmentitem's actual storage location had not been updated in the College's master listing appropriately.Additionally, we were informed that the equipment is no longer functional and should have been disposed of, but it had not been, showing a failure to maintain accurate records of federally acquired equipment and dispose of equipment according to compliance requirements. Cause: The cause of the condition found that the College did not follow its policies to conduct a physical inventory count, resulting in discrepancies in the equipment listing as well as a lack of formally written policies and procedures to update and report changes in equipment status at the College. Possible Asserted Effect: The inability to locate equipment and improper disposal practices compromise the integrity of inventory management. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs: No questioned costs were identified. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: The conditions found do not constitute a repeat finding from the prior year. Recommendation: We recommend that management perform a thorough physical inventory audit to locate all equipmentand update the master equipment listing with accurate details, including current locations and statuses .Additionally, we recommend the institution review and regularly circulate a formal plan for the appropriate disposal of non-functional or obsolete equipment. This plan should include obtaining necessary approvals and documenting the disposal process as per federal guidelines. Views of Responsible Officials: Recommendation accepted.
Finding No.: 2024-003- Equipment – Material weakness and material non-compliance Federal Agency: Various Program Name: Research and Development Cluster ALN Number: Various Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions with federally acquired research and development equipment must adhere to specific guidelines outlined in 2 CFR 200.313. This regulation mandates that entities conduct bi-annual inventory counts of federally acquired equipment to ensure accurate tracking and accountability. It requires maintaining detailed records of all equipment, including acquisition date, cost, location, and current status, to reflect any changes or discrepancies following each inventory count .Additionally, the regulation specifies procedures for the appropriate disposal of federally acquired equipment that is no longer needed or has reached the end of its useful life. Entities must request disposal instructions from the federal awarding agency and ensure that disposal methods comply with federal regulations, including obtaining necessary approvals and documenting the disposal process.Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance withthe guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found During our audit, we sampled and tested the equipment listing and discovered that 1 out of 11samples selected for testing could not be located while on site at Union College as the equipmentitem's actual storage location had not been updated in the College's master listing appropriately.Additionally, we were informed that the equipment is no longer functional and should have been disposed of, but it had not been, showing a failure to maintain accurate records of federally acquired equipment and dispose of equipment according to compliance requirements. Cause: The cause of the condition found that the College did not follow its policies to conduct a physical inventory count, resulting in discrepancies in the equipment listing as well as a lack of formally written policies and procedures to update and report changes in equipment status at the College. Possible Asserted Effect: The inability to locate equipment and improper disposal practices compromise the integrity of inventory management. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs: No questioned costs were identified. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: The conditions found do not constitute a repeat finding from the prior year. Recommendation: We recommend that management perform a thorough physical inventory audit to locate all equipmentand update the master equipment listing with accurate details, including current locations and statuses .Additionally, we recommend the institution review and regularly circulate a formal plan for the appropriate disposal of non-functional or obsolete equipment. This plan should include obtaining necessary approvals and documenting the disposal process as per federal guidelines. Views of Responsible Officials: Recommendation accepted.
Finding No.: 2024-003- Equipment – Material weakness and material non-compliance Federal Agency: Various Program Name: Research and Development Cluster ALN Number: Various Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions with federally acquired research and development equipment must adhere to specific guidelines outlined in 2 CFR 200.313. This regulation mandates that entities conduct bi-annual inventory counts of federally acquired equipment to ensure accurate tracking and accountability. It requires maintaining detailed records of all equipment, including acquisition date, cost, location, and current status, to reflect any changes or discrepancies following each inventory count .Additionally, the regulation specifies procedures for the appropriate disposal of federally acquired equipment that is no longer needed or has reached the end of its useful life. Entities must request disposal instructions from the federal awarding agency and ensure that disposal methods comply with federal regulations, including obtaining necessary approvals and documenting the disposal process.Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance withthe guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found During our audit, we sampled and tested the equipment listing and discovered that 1 out of 11samples selected for testing could not be located while on site at Union College as the equipmentitem's actual storage location had not been updated in the College's master listing appropriately.Additionally, we were informed that the equipment is no longer functional and should have been disposed of, but it had not been, showing a failure to maintain accurate records of federally acquired equipment and dispose of equipment according to compliance requirements. Cause: The cause of the condition found that the College did not follow its policies to conduct a physical inventory count, resulting in discrepancies in the equipment listing as well as a lack of formally written policies and procedures to update and report changes in equipment status at the College. Possible Asserted Effect: The inability to locate equipment and improper disposal practices compromise the integrity of inventory management. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs: No questioned costs were identified. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: The conditions found do not constitute a repeat finding from the prior year. Recommendation: We recommend that management perform a thorough physical inventory audit to locate all equipmentand update the master equipment listing with accurate details, including current locations and statuses .Additionally, we recommend the institution review and regularly circulate a formal plan for the appropriate disposal of non-functional or obsolete equipment. This plan should include obtaining necessary approvals and documenting the disposal process as per federal guidelines. Views of Responsible Officials: Recommendation accepted.
Finding No.: 2024-003- Equipment – Material weakness and material non-compliance Federal Agency: Various Program Name: Research and Development Cluster ALN Number: Various Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions with federally acquired research and development equipment must adhere to specific guidelines outlined in 2 CFR 200.313. This regulation mandates that entities conduct bi-annual inventory counts of federally acquired equipment to ensure accurate tracking and accountability. It requires maintaining detailed records of all equipment, including acquisition date, cost, location, and current status, to reflect any changes or discrepancies following each inventory count .Additionally, the regulation specifies procedures for the appropriate disposal of federally acquired equipment that is no longer needed or has reached the end of its useful life. Entities must request disposal instructions from the federal awarding agency and ensure that disposal methods comply with federal regulations, including obtaining necessary approvals and documenting the disposal process.Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance withthe guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found During our audit, we sampled and tested the equipment listing and discovered that 1 out of 11samples selected for testing could not be located while on site at Union College as the equipmentitem's actual storage location had not been updated in the College's master listing appropriately.Additionally, we were informed that the equipment is no longer functional and should have been disposed of, but it had not been, showing a failure to maintain accurate records of federally acquired equipment and dispose of equipment according to compliance requirements. Cause: The cause of the condition found that the College did not follow its policies to conduct a physical inventory count, resulting in discrepancies in the equipment listing as well as a lack of formally written policies and procedures to update and report changes in equipment status at the College. Possible Asserted Effect: The inability to locate equipment and improper disposal practices compromise the integrity of inventory management. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs: No questioned costs were identified. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: The conditions found do not constitute a repeat finding from the prior year. Recommendation: We recommend that management perform a thorough physical inventory audit to locate all equipmentand update the master equipment listing with accurate details, including current locations and statuses .Additionally, we recommend the institution review and regularly circulate a formal plan for the appropriate disposal of non-functional or obsolete equipment. This plan should include obtaining necessary approvals and documenting the disposal process as per federal guidelines. Views of Responsible Officials: Recommendation accepted.
Finding No.: 2024-003- Equipment – Material weakness and material non-compliance Federal Agency: Various Program Name: Research and Development Cluster ALN Number: Various Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions with federally acquired research and development equipment must adhere to specific guidelines outlined in 2 CFR 200.313. This regulation mandates that entities conduct bi-annual inventory counts of federally acquired equipment to ensure accurate tracking and accountability. It requires maintaining detailed records of all equipment, including acquisition date, cost, location, and current status, to reflect any changes or discrepancies following each inventory count .Additionally, the regulation specifies procedures for the appropriate disposal of federally acquired equipment that is no longer needed or has reached the end of its useful life. Entities must request disposal instructions from the federal awarding agency and ensure that disposal methods comply with federal regulations, including obtaining necessary approvals and documenting the disposal process.Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance withthe guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found During our audit, we sampled and tested the equipment listing and discovered that 1 out of 11samples selected for testing could not be located while on site at Union College as the equipmentitem's actual storage location had not been updated in the College's master listing appropriately.Additionally, we were informed that the equipment is no longer functional and should have been disposed of, but it had not been, showing a failure to maintain accurate records of federally acquired equipment and dispose of equipment according to compliance requirements. Cause: The cause of the condition found that the College did not follow its policies to conduct a physical inventory count, resulting in discrepancies in the equipment listing as well as a lack of formally written policies and procedures to update and report changes in equipment status at the College. Possible Asserted Effect: The inability to locate equipment and improper disposal practices compromise the integrity of inventory management. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs: No questioned costs were identified. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: The conditions found do not constitute a repeat finding from the prior year. Recommendation: We recommend that management perform a thorough physical inventory audit to locate all equipmentand update the master equipment listing with accurate details, including current locations and statuses .Additionally, we recommend the institution review and regularly circulate a formal plan for the appropriate disposal of non-functional or obsolete equipment. This plan should include obtaining necessary approvals and documenting the disposal process as per federal guidelines. Views of Responsible Officials: Recommendation accepted.
Finding No.: 2024-003- Equipment – Material weakness and material non-compliance Federal Agency: Various Program Name: Research and Development Cluster ALN Number: Various Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions with federally acquired research and development equipment must adhere to specific guidelines outlined in 2 CFR 200.313. This regulation mandates that entities conduct bi-annual inventory counts of federally acquired equipment to ensure accurate tracking and accountability. It requires maintaining detailed records of all equipment, including acquisition date, cost, location, and current status, to reflect any changes or discrepancies following each inventory count .Additionally, the regulation specifies procedures for the appropriate disposal of federally acquired equipment that is no longer needed or has reached the end of its useful life. Entities must request disposal instructions from the federal awarding agency and ensure that disposal methods comply with federal regulations, including obtaining necessary approvals and documenting the disposal process.Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance withthe guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found During our audit, we sampled and tested the equipment listing and discovered that 1 out of 11samples selected for testing could not be located while on site at Union College as the equipmentitem's actual storage location had not been updated in the College's master listing appropriately.Additionally, we were informed that the equipment is no longer functional and should have been disposed of, but it had not been, showing a failure to maintain accurate records of federally acquired equipment and dispose of equipment according to compliance requirements. Cause: The cause of the condition found that the College did not follow its policies to conduct a physical inventory count, resulting in discrepancies in the equipment listing as well as a lack of formally written policies and procedures to update and report changes in equipment status at the College. Possible Asserted Effect: The inability to locate equipment and improper disposal practices compromise the integrity of inventory management. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs: No questioned costs were identified. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: The conditions found do not constitute a repeat finding from the prior year. Recommendation: We recommend that management perform a thorough physical inventory audit to locate all equipmentand update the master equipment listing with accurate details, including current locations and statuses .Additionally, we recommend the institution review and regularly circulate a formal plan for the appropriate disposal of non-functional or obsolete equipment. This plan should include obtaining necessary approvals and documenting the disposal process as per federal guidelines. Views of Responsible Officials: Recommendation accepted.
Finding No.: 2024-003- Equipment – Material weakness and material non-compliance Federal Agency: Various Program Name: Research and Development Cluster ALN Number: Various Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions with federally acquired research and development equipment must adhere to specific guidelines outlined in 2 CFR 200.313. This regulation mandates that entities conduct bi-annual inventory counts of federally acquired equipment to ensure accurate tracking and accountability. It requires maintaining detailed records of all equipment, including acquisition date, cost, location, and current status, to reflect any changes or discrepancies following each inventory count .Additionally, the regulation specifies procedures for the appropriate disposal of federally acquired equipment that is no longer needed or has reached the end of its useful life. Entities must request disposal instructions from the federal awarding agency and ensure that disposal methods comply with federal regulations, including obtaining necessary approvals and documenting the disposal process.Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance withthe guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found During our audit, we sampled and tested the equipment listing and discovered that 1 out of 11samples selected for testing could not be located while on site at Union College as the equipmentitem's actual storage location had not been updated in the College's master listing appropriately.Additionally, we were informed that the equipment is no longer functional and should have been disposed of, but it had not been, showing a failure to maintain accurate records of federally acquired equipment and dispose of equipment according to compliance requirements. Cause: The cause of the condition found that the College did not follow its policies to conduct a physical inventory count, resulting in discrepancies in the equipment listing as well as a lack of formally written policies and procedures to update and report changes in equipment status at the College. Possible Asserted Effect: The inability to locate equipment and improper disposal practices compromise the integrity of inventory management. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs: No questioned costs were identified. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: The conditions found do not constitute a repeat finding from the prior year. Recommendation: We recommend that management perform a thorough physical inventory audit to locate all equipmentand update the master equipment listing with accurate details, including current locations and statuses .Additionally, we recommend the institution review and regularly circulate a formal plan for the appropriate disposal of non-functional or obsolete equipment. This plan should include obtaining necessary approvals and documenting the disposal process as per federal guidelines. Views of Responsible Officials: Recommendation accepted.
Finding No.: 2024-003- Equipment – Material weakness and material non-compliance Federal Agency: Various Program Name: Research and Development Cluster ALN Number: Various Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions with federally acquired research and development equipment must adhere to specific guidelines outlined in 2 CFR 200.313. This regulation mandates that entities conduct bi-annual inventory counts of federally acquired equipment to ensure accurate tracking and accountability. It requires maintaining detailed records of all equipment, including acquisition date, cost, location, and current status, to reflect any changes or discrepancies following each inventory count .Additionally, the regulation specifies procedures for the appropriate disposal of federally acquired equipment that is no longer needed or has reached the end of its useful life. Entities must request disposal instructions from the federal awarding agency and ensure that disposal methods comply with federal regulations, including obtaining necessary approvals and documenting the disposal process.Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance withthe guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found During our audit, we sampled and tested the equipment listing and discovered that 1 out of 11samples selected for testing could not be located while on site at Union College as the equipmentitem's actual storage location had not been updated in the College's master listing appropriately.Additionally, we were informed that the equipment is no longer functional and should have been disposed of, but it had not been, showing a failure to maintain accurate records of federally acquired equipment and dispose of equipment according to compliance requirements. Cause: The cause of the condition found that the College did not follow its policies to conduct a physical inventory count, resulting in discrepancies in the equipment listing as well as a lack of formally written policies and procedures to update and report changes in equipment status at the College. Possible Asserted Effect: The inability to locate equipment and improper disposal practices compromise the integrity of inventory management. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs: No questioned costs were identified. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: The conditions found do not constitute a repeat finding from the prior year. Recommendation: We recommend that management perform a thorough physical inventory audit to locate all equipmentand update the master equipment listing with accurate details, including current locations and statuses .Additionally, we recommend the institution review and regularly circulate a formal plan for the appropriate disposal of non-functional or obsolete equipment. This plan should include obtaining necessary approvals and documenting the disposal process as per federal guidelines. Views of Responsible Officials: Recommendation accepted.
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D PASS-THROUGH NUMBER 4605 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 2024-001. Equipment and Real Property Management Criteria or specific requirement: Proper records should be maintained for equipment acquired with federal awards as specified in 2 CFR section 200.313. Specifically, the property records must include a serial number or other identification number. Condition: We were unable to verify 3 of 24 Education Stabilization Fund equipment items selected for sighting because serial numbers were not included in the property records, and the equipment items did not have any other identification numbers attached. The cost of the items was $4,428. Cause: Lack of internal controls over capital asset subsidiary records. Effect or potential effect: The District's capital asset subsidiary records were not accurate. Context: Observation of 24 equipment items recorded on equipment subsidiary records at an initial cost of $61,408 from a total population of 242 items at an initial cost of $1,894,302. Identification as a repeat finding: No Recommendation: The District should maintain proper records for equipment acquired with federal awards. Views of responsible officials: The district will develop written fixed/capital asset procedures that will require that all equipment over the capitalization threshold must include serial numbers in property records and be affixed with a unique asset identification tag. We will conduct a full physical inventory of equipment. As part of this process we will record serial numbers for all applicable items, affix asset tags to all untagged equipment, and record proper disposal of assets. We will provide staff training for all relevant staff on asset management procedures and responsibilities.
U.S. DEPARTMENT OF EDUCATION MAGNET SCHOOLS ASSISTANCE - AL NUMBER 84.165A AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 2024-002. Equipment and Real Property Management Criteria or specific requirement: Proper records should be maintained for equipment acquired with federal awards as specified in 2 CFR section 200.313. Additionally, the District should ensure that disposition of such equipment is in accordance with federal requirements, including the federal awarding agency is appropriately compensated for its share of any property sold or converted to non-federal use. Condition: The District could not account for 2 of 25 Magnet School Assistance equipment items purchased in previous years costing $3,383. Cause: Lack of internal controls over capital asset subsidiary records. Effect or potential effect: The District's capital asset subsidiary records were not accurate. Context: Observation of 25 equipment items recorded on equipment subsidiary records at an initial cost of $52,900 from a total population of 1038 items at an initial cost of $3,111,161. Identification as a repeat finding: No Recommendation: The District should maintain proper records for equipment acquired with federal awards. Views of responsible officials: The district will develop written fixed/capital asset procedures that will require that all equipment over the capitalization threshold must include serial numbers in property records and be affixed with a unique asset identification tag. We will conduct a full physical inventory of equipment. As part of this process we will record serial numbers for all applicable items, affix asset tags to all untagged equipment, and record proper disposal of assets. We will provide staff training for all relevant staff on asset management procedures and responsibilities.
Federal Program Name and Year: COVID 19- Educational Stabilization Fund Project No.: 24-4998-E3 AL No.: 84.425U Passed Through: Illinois State Board of Education Federal Agency: United States Department of Education Criteria or specific requirement (including statutory, regulatory, or other citation): Property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property (2 CFR section 200.313(d)(1)). Condition: The District did not maintain adequate property records to comply with 2 CFR section 200.313(d)(1). Questioned Costs: None Context: The District last updated its property records in 2021. Since 2021, the District has relied upon non-audit services from its accounting firm to assist with compiling capital asset values for external reporting. These non-audit services are not detailed enough to comply with Federal regulations because they are meant to satisfy Accounting Principles Generally Accepted in the United States of America. Effect: The District was out of compliance with Federal Equipment and Real Property Management regulations. Cause: The cause of the condition was a lack of a business office policy and procedure to ensure annual updating of property records, including the tagging and marking of items or Federal origin. Recommendation: It is recommended that the business office establish a policy and procedure to ensure annual updating of property records, including the tagging and marking of items of Federal origin. Management Response: See corrective action plan.
Federal Program Name and Year: COVID 19- Educational Stabilization Fund Project No.: 24-4998-E3 AL No.: 84.425U Passed Through: Illinois State Board of Education Federal Agency: United States Department of Education Criteria or specific requirement (including statutory, regulatory, or other citation): Property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property (2 CFR section 200.313(d)(1)). Condition: The District did not maintain adequate property records to comply with 2 CFR section 200.313(d)(1). Questioned Costs: None Context: The District last updated its property records in 2021. Since 2021, the District has relied upon non-audit services from its accounting firm to assist with compiling capital asset values for external reporting. These non-audit services are not detailed enough to comply with Federal regulations because they are meant to satisfy Accounting Principles Generally Accepted in the United States of America. Effect: The District was out of compliance with Federal Equipment and Real Property Management regulations. Cause: The cause of the condition was a lack of a business office policy and procedure to ensure annual updating of property records, including the tagging and marking of items or Federal origin. Recommendation: It is recommended that the business office establish a policy and procedure to ensure annual updating of property records, including the tagging and marking of items of Federal origin. Management Response: See corrective action plan.
Statement of condition: Property records for equipment acquired under the Education Stabilization Fund program were not maintained. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.313(d)(1) requires that property records be maintained 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), who holds title, the acquisition date, 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 sales price of the property. Per the School’s policies, property records should be maintained for all equipment and theft-sensitive assets. Cause of condition: Procedures are in place for property records to be maintained for all equipment acquired during the fiscal year. However, these procedures do not include maintaining all of the information required by 2 CFR 200.313(d)(1). Effect of condition: During testing, it was noted that property records including all required information were not maintained for capital assets acquired under the Education Stabilization Fund program. Context: Property including HVAC units and various other equipment and furniture and fixtures was acquired under the Education Stabilization Fund program. The audit testing found that for all property acquired during the fiscal year, records including a description of the property, the acquisition date, and the cost of the property are being maintained. However, the property records do not include various additional information as required by 2 CFR 200.313(d)(1). Recommendation: Procedures should be put in place to ensure that property records including all required information are maintained for all capital assets purchased by the School in accordance with 2 CFR 200.313(d)(1). Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to maintain adequate property records.
Statement of condition: A physical inventory of property was not performed within the last two years. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.313(d)(2) requires that a physical inventory of property must be conducted, and the results must be reconciled with the property records at least once every two years. Cause of condition: A physical inventory of property was planned for the current fiscal year, however, due to employee turnover, this inventory was never performed. Effect of condition: The School was not in compliance with 2 CFR 200.313(d)(2) as a physical inventory of property had not been performed within the past two years. Context: Property including HVAC units and various other equipment and furniture and fixtures was acquired under the Education Stabilization Fund program. A physical inventory of this property has not been performed with the past two years as required by 2 CFR 200.313(d)(2). Recommendation: Procedures should be put in place to ensure that a physical inventory of property is being performed every two years in accordance with 2 CFR 200.313(d)(2). We also recommend that the Federal Program Director position is filled by an individual that has training and knowledge of the federal program they are administrating. Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place to perform a physical inventory of property at least once very two years. See 2024-007 for management's detailed action plan surrounding the property findings.
Federal Agency: U.S. Department of Education Federal Program Name: Elementary and Secondary School Relief Fund Assistance Listing Number: 84.425U Federal Award Identification Number and Year: S425U210044 Federal Award Date 12/6/2021 and 3/13/2020 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2022-105726-DPI-ESSERFIII-165 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: 2 CFR 200.313(d)(2) 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." 2 CFR 200.313(d)(1) states " 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. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property." Condition: District used ESSER funds in 2022-23 as one funding source for a van and a playground and building project. In 2023-24, the district purchased a second van with ESSER funds. The District has not completed a physical inventory of its capital assets as required by Uniform Guidance. The District did not include all of the required information in the property records maintained in its capital asset software. Questioned Costs: None. Context: While performing audit procedures, it was noted that the District did not have policies in place to ensure compliance with retaining information about capital asset purchases with federal funds for all assets in our sample. The District did not have adequate procedures in place to ensure that a physical inventory was conducted within the required timeframe. There was no review of the capital asset records by someone other than the person responsible for maintaining the list. Cause: The District has not historically used federal funds to purchase equipment and real property and was unaware of the requirements. Effect: Failure to conduct a physical inventory may result in inaccurate equipment records, which can lead to mismanagement of assets and potential loss or misuse of equipment. Equipment or real property purchased with federal funds may not have properly maintained property records and upon disposition of the asset the District may have failed to provide information and funds back to the federal government. Repeat Finding: No. Recommendation: We recommend that the District establish and implement procedures to ensure that a physical inventory of equipment is conducted at least once every two years. This should include assigning responsibility for the inventory process, setting a schedule for inventory counts, and ensuring that the results are reconciled with the equipment records. We also recommend the District review its capital asset tracking processes and implement internal controls to help ensure that all required documentation is entered into the capital asset software when federal funding is involved and there is adequate segregation of duties in regards to capital asset reporting. Views of Responsible Officials: There is no disagreement with the audit finding. The District will either do a self-inventory or hire a firm to do the inventory for us.
Federal Agency: U.S. Department of Education Federal Program Name: Elementary and Secondary School Relief Fund Assistance Listing Number: 84.425U Federal Award Identification Number and Year: S425U210044 Federal Award Date 12/6/2021 and 3/13/2020 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Number(s): 2022-105726-DPI-ESSERFIII-165 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: 2 CFR 200.313(d)(2) 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." 2 CFR 200.313(d)(1) states " 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. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property." Condition: District used ESSER funds in 2022-23 as one funding source for a van and a playground and building project. In 2023-24, the district purchased a second van with ESSER funds. The District has not completed a physical inventory of its capital assets as required by Uniform Guidance. The District did not include all of the required information in the property records maintained in its capital asset software. Questioned Costs: None. Context: While performing audit procedures, it was noted that the District did not have policies in place to ensure compliance with retaining information about capital asset purchases with federal funds for all assets in our sample. The District did not have adequate procedures in place to ensure that a physical inventory was conducted within the required timeframe. There was no review of the capital asset records by someone other than the person responsible for maintaining the list. Cause: The District has not historically used federal funds to purchase equipment and real property and was unaware of the requirements. Effect: Failure to conduct a physical inventory may result in inaccurate equipment records, which can lead to mismanagement of assets and potential loss or misuse of equipment. Equipment or real property purchased with federal funds may not have properly maintained property records and upon disposition of the asset the District may have failed to provide information and funds back to the federal government. Repeat Finding: No. Recommendation: We recommend that the District establish and implement procedures to ensure that a physical inventory of equipment is conducted at least once every two years. This should include assigning responsibility for the inventory process, setting a schedule for inventory counts, and ensuring that the results are reconciled with the equipment records. We also recommend the District review its capital asset tracking processes and implement internal controls to help ensure that all required documentation is entered into the capital asset software when federal funding is involved and there is adequate segregation of duties in regards to capital asset reporting. Views of Responsible Officials: There is no disagreement with the audit finding. The District will either do a self-inventory or hire a firm to do the inventory for us.
2024-007 Material Weakness and Noncompliance, Equipment and Real Property Management U.S. Department of Education Passed through the State of Connecticut Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D Program Name: COVID-19 Elementary and Secondary School Relief Fund (ESSER) Assistance Listing Number: 84.425U Program Name: COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) Criteria: Non-federal entities other than states must follow 2 CFR sections 200.313 (c) through (e) which require that property records must be maintained 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), who holds the title, the acquisition date, 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 sales price of the property (2 CFR section 200.313(d)(1)) and a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: The Town could not provide property records including all required information as indicated in 2 CFR section 200.313(d)(1). The Town did not perform a physical inventory of the property. Cause: The Town does not have processes and procedures in place related to equipment management, tracking and required physical inventories. Effect: The Town is not in compliance with federal grant requirements over the tracking and physical inventory of equipment. Improper equipment procedures could result in actions taken by oversight agencies which could impact future funding. Questioned costs: None. Context: See condition above. Identification as a repeat finding if applicable: N/A Recommendation: We recommend the Town develop processes and procedures to tag and track equipment purchased with federal funding, and maintain support that physical inventory inventories were performed as required. View of responsible officials: We agree with the finding. See corrective action plan.
2024-007 Material Weakness and Noncompliance, Equipment and Real Property Management U.S. Department of Education Passed through the State of Connecticut Department of Education Education Stabilization Fund Assistance Listing Number: 84.425D Program Name: COVID-19 Elementary and Secondary School Relief Fund (ESSER) Assistance Listing Number: 84.425U Program Name: COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) Criteria: Non-federal entities other than states must follow 2 CFR sections 200.313 (c) through (e) which require that property records must be maintained 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), who holds the title, the acquisition date, 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 sales price of the property (2 CFR section 200.313(d)(1)) and a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: The Town could not provide property records including all required information as indicated in 2 CFR section 200.313(d)(1). The Town did not perform a physical inventory of the property. Cause: The Town does not have processes and procedures in place related to equipment management, tracking and required physical inventories. Effect: The Town is not in compliance with federal grant requirements over the tracking and physical inventory of equipment. Improper equipment procedures could result in actions taken by oversight agencies which could impact future funding. Questioned costs: None. Context: See condition above. Identification as a repeat finding if applicable: N/A Recommendation: We recommend the Town develop processes and procedures to tag and track equipment purchased with federal funding, and maintain support that physical inventory inventories were performed as required. View of responsible officials: We agree with the finding. See corrective action plan.
Finding No. 2024-044 Federal Awarding Agency: USDOI Impact: Material Weakness AL Number and Title: 15.605, 15.611 FWC Federal Award Number: Multiple Applicable Compliance Requirement: Equipment and Real Property Management Condition: Auditors could not obtain sufficient and appropriate evidence to verify compliance with FWC’s equipment and real property management requirements. Context: DFG is responsible for ensuring equipment, real property, and capital improvements, acquired with FWC funds, are used for an authorized purpose, sufficiently tracked, and appropriately disposed of in accordance with federal regulations. In FY 24, DFG staff did not maintain sufficient evidence to demonstrate compliance with equipment and real property management requirements. DFG equipment and real property records did not reliably catalog the universe of equipment, real property, and capital improvements funded with FWC grant monies. Equipment records were incomplete and not trackable by funding source in the accounting system. As a result, the audit was unable to determine the extent of equipment purchased with FWC funds. Real property records had not been reconciled since 2019 and could not be matched with DFG site visit logs. The audit could not identify the FWC assets to be monitored and the extent of site visits conducted during the audit period, and whether the site visits included monitoring for authorized uses. Cause: DFG management attributed the deficiencies to a lack of department-wide procedures, staff turnover, and insufficient training. Criteria: Title 2 CFR 200.303 requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Title 2 CFR 200.311 and Title 50 CFR 80.134 requires the State to use real property for the purpose authorized in the grant for as long as it is needed for that purpose. When real property is no longer needed for the originally authorized purpose, property must be disposed of in accordance with federal requirements. Title 2 CFR 200.313 requires the State to use, manage and dispose of equipment acquired under a federal award in accordance with State laws and procedures. Such equipment must be used for the project or program for which it was acquired and for as long as needed. The State agency must maintain equipment property records, perform physical inventory of equipment, develop a control system, and perform regular maintenance of equipment. Title 50 CFR 80.133 requires the State to maintain acquired or completed capital improvements under FWC grants to ensure that each capital improvement continues to serve its authorized purpose during its useful life. Effect: The lack of department-wide procedures increases the risk that FWC funded assets are not used for authorized purposes and properly disposed of when no longer needed. Inadequate equipment tracking increases the risk of loss or theft. Further, noncompliance with federal regulations may result in the federal awarding agency imposing additional conditions or taking corrective action, including additional reporting requirements or withholding/terminating funding. Questioned Costs: Indeterminate Recommendation: DFG’s commissioner should ensure procedures are developed and training is implemented so that FWC funded equipment, real property and capital improvements are managed in compliance with federal requirements. Views of Responsible Officials: Management agrees with this finding.
Finding No. 2024-044 Federal Awarding Agency: USDOI Impact: Material Weakness AL Number and Title: 15.605, 15.611 FWC Federal Award Number: Multiple Applicable Compliance Requirement: Equipment and Real Property Management Condition: Auditors could not obtain sufficient and appropriate evidence to verify compliance with FWC’s equipment and real property management requirements. Context: DFG is responsible for ensuring equipment, real property, and capital improvements, acquired with FWC funds, are used for an authorized purpose, sufficiently tracked, and appropriately disposed of in accordance with federal regulations. In FY 24, DFG staff did not maintain sufficient evidence to demonstrate compliance with equipment and real property management requirements. DFG equipment and real property records did not reliably catalog the universe of equipment, real property, and capital improvements funded with FWC grant monies. Equipment records were incomplete and not trackable by funding source in the accounting system. As a result, the audit was unable to determine the extent of equipment purchased with FWC funds. Real property records had not been reconciled since 2019 and could not be matched with DFG site visit logs. The audit could not identify the FWC assets to be monitored and the extent of site visits conducted during the audit period, and whether the site visits included monitoring for authorized uses. Cause: DFG management attributed the deficiencies to a lack of department-wide procedures, staff turnover, and insufficient training. Criteria: Title 2 CFR 200.303 requires the State to establish and maintain effective internal controls over the federal award that provides reasonable assurance that the State is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Title 2 CFR 200.311 and Title 50 CFR 80.134 requires the State to use real property for the purpose authorized in the grant for as long as it is needed for that purpose. When real property is no longer needed for the originally authorized purpose, property must be disposed of in accordance with federal requirements. Title 2 CFR 200.313 requires the State to use, manage and dispose of equipment acquired under a federal award in accordance with State laws and procedures. Such equipment must be used for the project or program for which it was acquired and for as long as needed. The State agency must maintain equipment property records, perform physical inventory of equipment, develop a control system, and perform regular maintenance of equipment. Title 50 CFR 80.133 requires the State to maintain acquired or completed capital improvements under FWC grants to ensure that each capital improvement continues to serve its authorized purpose during its useful life. Effect: The lack of department-wide procedures increases the risk that FWC funded assets are not used for authorized purposes and properly disposed of when no longer needed. Inadequate equipment tracking increases the risk of loss or theft. Further, noncompliance with federal regulations may result in the federal awarding agency imposing additional conditions or taking corrective action, including additional reporting requirements or withholding/terminating funding. Questioned Costs: Indeterminate Recommendation: DFG’s commissioner should ensure procedures are developed and training is implemented so that FWC funded equipment, real property and capital improvements are managed in compliance with federal requirements. Views of Responsible Officials: Management agrees with this finding.
Finding No. 2024-082 Federal Awarding Agency: U.S. Department of Health and Human Services (USDHHS) Impact: Significant Deficiency, Noncompliance AL Number and Title: 93.859 RDC Federal Award Number: 5P20GM103395-23 Applicable Compliance Requirement: Equipment and Real Property Management Condition: One of the 40 sampled equipment had a lapse of greater than two years between physical inventories. Context: During the testing of equipment for real property management, one item of equipment was found to have an interval between physical inventories that was greater than two years. Inventory for this equipment was taken May 7, 2021, then again June 4, 2024. Cause: University of Alaska Anchorage (UAA) had a loss of information regarding compliance requirements through employee turnover at the responsible department level. Criteria: Per 2 CFR 200.313(d)(2), a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effect: The equipment was not inventoried within the two-year timeframe. Questioned Costs: None Recommendation: UAA management should ensure proper policies and procedures are in place to monitor capital asset inventory observations. Views of Responsible Officials: Management agrees with this finding.
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 shoul e reconciled with the property records at least once every two years.
2024-002 (2023-001) – Equipment and Real Property Management – Material Weakness in Internal Controls over Compliance (Repeat Finding) Federal Program Information: Funding Agency: U. S. Department of Health and Human Services Title: Head Start CFDA Number: 93.600 Federal Award Identification number: 06CH012005 Pass Through Entity: N/A Award Year: 2024 & 2023 Condition: The Organization did not conduct a physical inventory in current year or prior year and, in additional, requested reimbursement from the Department of Health and Human services for repair costs for which insurance proceeds were received. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years. 2 CFR 200.406 requires that any recoveries on losses, such as insurance proceeds, be credited to the Federal award as a cost reduction or a cash refund. Questioned costs: $16,033 Effect: The Organization could dispose of, lose, or encumber federally funded equipment without following Federal guidelines. Cause: The Organization does not have policies and procedures to ensure that a physical inventory of equipment is performed at a minimum frequency of every two years. Additionally, the Entity filed a claim for damages to asset(s) purchased with Federal funds and did not offset the insurance proceeds against the repair costs charged to the Federal program, resulting in reimbursement of unallowable costs.
2024-002 (2023-001) – Equipment and Real Property Management – Material Weakness in Internal Controls over Compliance (Repeat Finding) Federal Program Information: Funding Agency: U. S. Department of Health and Human Services Title: Head Start CFDA Number: 93.600 Federal Award Identification number: 06CH012005 Pass Through Entity: N/A Award Year: 2024 & 2023 Condition: The Organization did not conduct a physical inventory in current year or prior year and, in additional, requested reimbursement from the Department of Health and Human services for repair costs for which insurance proceeds were received. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years. 2 CFR 200.406 requires that any recoveries on losses, such as insurance proceeds, be credited to the Federal award as a cost reduction or a cash refund. Questioned costs: $16,033 Effect: The Organization could dispose of, lose, or encumber federally funded equipment without following Federal guidelines. Cause: The Organization does not have policies and procedures to ensure that a physical inventory of equipment is performed at a minimum frequency of every two years. Additionally, the Entity filed a claim for damages to asset(s) purchased with Federal funds and did not offset the insurance proceeds against the repair costs charged to the Federal program, resulting in reimbursement of unallowable costs.
Finding Number: 2024-002 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(d)(1) which provides that property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property. The School District purchased HVAC equipment in the amount of $1,032,599 using COVID 19: Elementary and Secondary School Emergency Relief Funds in FY 22; however, they failed to add these assets to their capital asset listing due to a failure in adequately designed controls and still have not updated this in the capital asset records as of June 30, 2024. The also have not performed an inventory count in the past 2 years. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer and Superintendent should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.
Finding Number: 2024-002 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(d)(1) which provides that property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property. The School District purchased HVAC equipment in the amount of $1,032,599 using COVID 19: Elementary and Secondary School Emergency Relief Funds in FY 22; however, they failed to add these assets to their capital asset listing due to a failure in adequately designed controls and still have not updated this in the capital asset records as of June 30, 2024. The also have not performed an inventory count in the past 2 years. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer and Superintendent should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.
Finding Number: 2024-002 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(d)(1) which provides that property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property. The School District purchased HVAC equipment in the amount of $1,032,599 using COVID 19: Elementary and Secondary School Emergency Relief Funds in FY 22; however, they failed to add these assets to their capital asset listing due to a failure in adequately designed controls and still have not updated this in the capital asset records as of June 30, 2024. The also have not performed an inventory count in the past 2 years. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer and Superintendent should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.
Finding Number: 2024-002 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(d)(1) which provides that property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property. The School District purchased HVAC equipment in the amount of $1,032,599 using COVID 19: Elementary and Secondary School Emergency Relief Funds in FY 22; however, they failed to add these assets to their capital asset listing due to a failure in adequately designed controls and still have not updated this in the capital asset records as of June 30, 2024. The also have not performed an inventory count in the past 2 years. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer and Superintendent should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.
Finding Number: 2024-002 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(d)(1) which provides that property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property. The School District purchased HVAC equipment in the amount of $1,032,599 using COVID 19: Elementary and Secondary School Emergency Relief Funds in FY 22; however, they failed to add these assets to their capital asset listing due to a failure in adequately designed controls and still have not updated this in the capital asset records as of June 30, 2024. The also have not performed an inventory count in the past 2 years. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer and Superintendent should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.
Finding Number: 2024-002 Assistance Listing Number and Title: AL # 84.425 Education Stabilization Fund Federal Award Identification Number / Year: 2024 Federal Agency: US Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education and Workforce Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(d)(1) which provides that property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property. The School District purchased HVAC equipment in the amount of $1,032,599 using COVID 19: Elementary and Secondary School Emergency Relief Funds in FY 22; however, they failed to add these assets to their capital asset listing due to a failure in adequately designed controls and still have not updated this in the capital asset records as of June 30, 2024. The also have not performed an inventory count in the past 2 years. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer and Superintendent should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(d)(1) which provides that property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property. Additionally, 2 CFR § 200.313(d)(2) states that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Due to inadequate controls, the District failed to appropriately track a bus purchased in part with Special Education Cluster grants monies in September 2019. The bus is included on the District's capital asset listing; however, it is listed as being purchased from a fund other than the Special Education Cluster grant funds. Additionally, the District did not maintain support for the cost allocation information as required by the Ohio Department of Education and Workforce (DEW). Therefore, the District does not have support for the proportionate share of the cost covered by the grant as required upon disposition of the bus. The District also did not maintain documentation of the required physical inventory. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The District should implement controls to ensure compliance with all DEW and Uniform Guidance requirements when purchasing equipment with Federal award funds.
2024-004 — Equipment and Real Property Management – Significant Deficiency in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Education Titles: Higher Education Institutional Aid ALN Number: 84.031 Award years: Various Criteria: 2 CFR 200.313(c) through (e), requires that equipment be used in federal programs for which it was acquired for, when appropriate, other federal programs. Equipment records shall be maintained including required elements, a physical inventory of equipment be taken at least once every 2 years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Condition: The College has not completed a physical inventory within the previous two fiscal years as required. In addition, the records were not detailed enough that program management is able to adequately and efficiently identify and locate any and all items. Questioned Costs: None Cause: The College is not enforcing their procedures to verify that the capital assets inventory has been taken annually and reconciled to the general ledger. Effect: Without a physical inventory, there is an increase in the probability that the capital asset listing will be incorrect, or assets listed may not exist. Auditor’s Recommendations: Enforce internal control procedures and complete an inventory of the school’s capital assets annually. Management’s Response: The College will take an inventory of its capital assets as required by policies.
2024-004 — Equipment and Real Property Management – Significant Deficiency in Internal Control Over Compliance and Noncompliance Federal program information: Funding agencies: U.S. Department of Education Titles: Higher Education Institutional Aid ALN Number: 84.031 Award years: Various Criteria: 2 CFR 200.313(c) through (e), requires that equipment be used in federal programs for which it was acquired for, when appropriate, other federal programs. Equipment records shall be maintained including required elements, a physical inventory of equipment be taken at least once every 2 years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Condition: The College has not completed a physical inventory within the previous two fiscal years as required. In addition, the records were not detailed enough that program management is able to adequately and efficiently identify and locate any and all items. Questioned Costs: None Cause: The College is not enforcing their procedures to verify that the capital assets inventory has been taken annually and reconciled to the general ledger. Effect: Without a physical inventory, there is an increase in the probability that the capital asset listing will be incorrect, or assets listed may not exist. Auditor’s Recommendations: Enforce internal control procedures and complete an inventory of the school’s capital assets annually. Management’s Response: The College will take an inventory of its capital assets as required by policies.
FINDING REFERENCE NUMBER 2024-006 FEDERAL PROGRAMS (ALN – 84.027) SPECIAL EDUCATION – GRANTS TO STATES (IDEA, PART B) – SPECIAL EDUCATION CLUSTER (IDEA) (ALN – 84.173) SPECIAL EDUCATION – PRESCHOOL GRANTS (IDEA PRESCHOOL) – SPECIAL EDUCATION CLUSTER (IDEA) (ALN – 84.425R) COVID-19 EDUCATION STABILIZATION FUND: CORONAVIRUS RESPONSE AND RELIEF SUPPLEMENTAL APPROPRIATIONS ACT, 2021 – EMERGENCY ASSISTANCE FOR NON-PUBLIC SCHOOLS (CRRSA EANS) (ALN – 84.425U) COVID-19 EDUCATION STABILIZATION FUND: AMERICAN RESCUE PLAN – ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF (ARP ESSER) (ALN – 84.938A) HURRICANE EDUCATION RECOVERY – IMMEDIATE AID TO RESTART SCHOOL OPERATIONS (RESTART) U.S. DEPARTMENT OF EDUCATION AWARD NUMBERS H027A230003 – 23A (07/01/2023 – 09/30/2024); H027A230003 – 24A (07/01/2024 – 09/30/2025); H173A230002 (07/01/2023 – 09/30/2024); H173A230002 (07/01/2024 – 09/30/2025); S425R210053 (06/28/2021 – 03/31/2025); S425U210029 (03/24/2021 – 03/28/2026); S938A180002 (04/26/2018 – 09/30/2025) COMPLIANCE REQUIREMENT EQUIPMENT AND REAL PROPERTY MANAGEMENT TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS CRITERIA 2 CFR Section 200.313, establishes that procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, 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. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. STATEMENT OF CONDITION As part of our procedures on equipment requirements, we requested an inventory of equipment from the PRDE as of June 30, 2024. No inventory was taken since 2019. The PRDE provided a list of all additions made during the fiscal year. In the list of additions provided to us, we found that a total amount of $844,273.56, classified as programs and licenses, should not be capitalized as equipment because they have a useful life of less than one year. From the samples selected for the different programs, we were able to identify that the property records are not being updated in a reasonable timeframe, since for a total of twenty-six (26) items evaluated, the person assigned as the equipment custodian in the records is not the current custodian of the equipment. We selected a sample of forty (40) units for the IDEA Cluster, to determine that the items were properly safeguarded and the usage was in accordance with the regulations. We found the following deficiencies: 1. There is an item describing a three-person sectional sofa, when we viewed the article, they showed us a five-burner stove with the sofa's property number. 2. One (1) item could not be observed. We selected a sample of forty (40) items for the Education Stabilization Fund Programs, to determine that the items were properly recorded, identified, safeguarded and the usage was in accordance with the regulations. We found the following deficiencies: 1. One (1) item could not be observed. 2. One (1) item, an air-conditioning, purchased in February 2024, at the time of our test in September 2025, is still uninstalled, as the area lacks the necessary connection. 3. Two (2) items, an institutional frying pan and a stainless-steel worktable, purchased in October 2023 and February 2024 respectively, at the time of our test in September 2025, remain in the equipment warehouse at Las Piedras without being installed and used. 4. One (1) item, a hydroponic nursery, purchased in November 2023, at the time of our test in September 2025, was not in used and looks as if not fully installed and deteriorated. 5. One (1) item, an Apple Computer, purchased in December 2023 to a private school, at the time of our test in September 2025 was observed at the OFA equipment warehouse because the private school closed operations, the equipment records were not updated to reflect these changes. QUESTIONED COSTS None. PERSPECTIVE INFORMATION Each school principal conducted an equipment count, but it was not reviewed, and not all schools did so. No inventory taken was provided, the last inventory was made in 2019, and the latter revealed deficiencies. The identified deficiencies constitute a systemic problem. Items purchased during fiscal year under audit were not installed, located, and no proper tracking of transfer of equipment is maintained in the PRDE. STATEMENT OF CAUSE Due to various natural events that have occurred and the COVID-19 pandemic, the PRDE has not been able to work with the inventory and update it. In addition, the Property Department does not have procedures in place in order to identify incomplete records, unidentified dispositions, equipment not installed or not in use. POSSIBLE ASSERTED EFFECT It was not possible to validate that the PRDE complies with the requirements established by the Federal regulation related to the maintenance of records of equipment acquired with Federal funds. In addition, deficiencies were noted in the usage and proper safeguard of the equipment purchased. IDENTIFICATION OF REPEAT FINDING This is a repeat finding (Finding Reference Number 2023-006). RECOMMENDATIONS We recommend that the PRDE carry out an inventory and reconcile it with the records maintained by the PRDE. In addition, internal controls must be implemented to ensure that only equipment that is necessary for the operation of the programs is purchased. In addition, the use of this equipment must be monitored, so that its installation and use are followed up, as well as the transfer of equipment and changes to the property records. VIEWS OF RESPONSIBLE OFFICIALS Management agrees with the finding and has initiated corrective actions to address each of the issues identified by the auditors. The Department of Education of Puerto Rico (PRDE) recognizes the importance of maintaining an accurate and up-to-date property inventory in accordance with federal regulations under 2 CFR §200.313(d), and is implementing measures to strengthen controls, ensure proper tagging, and monitor the location, use, and condition of all federally funded equipment. The Property Office has initiated a complete physical inventory to reconcile the existing property records with actual assets. All equipment custodians will be required to verify and certify their assigned inventory to ensure records are accurate and reflect current locations and responsible personnel. For deficiencies identified for the IDEA Cluster: Condition 1: For the item describing a three-person sectional sofa, which upon inspection corresponded to a five-burner stove, the Property Office corrected the equipment tag to ensure identification of both items. The correction was made directly on the physical assets to properly reflected the correct property numbers and descriptions. Condition 2: The item identified as not observed corresponds to software licenses that were distributed to teachers for instructional use. The Property Office maintains a detailed record identifying the licenses purchased, the specific equipment on which each license was installed, and the corresponding custodian. For deficiencies identified for the Education Stabilization Fund Programs: Condition 1: For the items that could not be observed during the auditors’ site visits, the Property Office will perform a follow-up investigation with the corresponding school to locate the equipment. Condition 2: The school where the air-conditioning unit is located has experienced electrical voltage issues, which have delayed its installation to prevent potential damage to the equipment. The situation is being addressed in coordination with the school’s maintenance team to correct the electrical problem. Once resolved, the PRDE will proceed with the installation. In parallel, the property office will consult with the corresponding federal program to evaluate the possibility of relocating the unit to another school where the equipment is needed and can be safely installed and used. Condition 3: This type of equipment is kept in the warehouse until a specific need is identified in a school facility. Once a school requests or is identified as requiring the equipment, the Property Office initiates the corresponding transfer, and the movement is duly documented and updated in the property management system.. this process ensures that equipment is allocated efficiently based on program needs and that all transfers are properly supported with documentation. Condition 4: The hydroponic nursery will be relocated to a school where it can be properly utilized for educational purposes. The Property Office, in coordination with the corresponding program, will verify the current condition of the equipment and perform the necessary repairs or adjustments to ensure it is fully functional and in use as intended. Condition 5: The Property Office has already identified a new school to which the Apple computer will be transferred to ensure it is properly utilized for educational purposes. The transfer will be completed om coordination with the corresponding program, and the property records will be updated accordingly to reflect the new location and custodian of the equipment. The PRDE is committed to correcting all deficiencies noted in the finding. All actions described above will be documented and reported as part of the corrective action plan, with an expected completion timeline within fiscal year 2025. These measures will ensure compliance with the Uniform Guidance and strengthen the overall management and safeguarding of federally funded property and equipment. IMPLEMENTATION DATE In process. RESPONSIBLE PERSON Nilda Z. Morales Vazquez Property Office Director
CRITERIA/SPECIFIC REQUIREMENT: The Regional Office of Education No. 39 did not have adequate record keeping over its equipment acquired from federal funds. The Code of Federal Regulations (2 CFR §200.313(d)(1)) requires that procedures for managing equipment acquired with federal funds must maintain property records that include the following information: (i) a description of the property, (ii) manufacturer’s serial number or other identification number, (iii) source of the funding for the property (including the Federal Award Identification Number (FAIN)), (iv) who holds title, (v) acquisition date (vi) cost of the property, (vii) percentage of federal contribution in the project cost for the Federal award under which the property was acquired, (viii) location (ix) use and condition of the property, and (x) and any ultimate disposition data, including date of disposal and sale price of the property. Moreover, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include record keeping and monitoring of equipment acquired from federal funds. CONDITION: The Regional Office of Education No. 39 manually maintains and stores its inventory of property and equipment. Asset details in the property records include only the description of the property, manufacturer’s serial number or other identification number, source of funds, who holds title, acquisition date, and cost of the property. The other minimum requirements specified by the Code including FAIN, location, use and condition of the property are not included in the property records. EFFECT: Inadequate record keeping over equipment acquired from federal funds may result in noncompliance with the Code. CAUSE: Management indicated that the issue was due to oversight and lack of training on requirements. RECOMMENDATION: The Regional Office of Education No. 39 should maintain detailed property records as required by federal regulations to ensure full compliance. MANAGEMENT’S RESPONSE: The Regional Office of Education No. 39 agrees with the audit findings and is implementing documents and procedures to meet requirements in the future
2024-004 – Significant Deficiency and Nonmaterial Noncompliance – Equipment and Real Property Management Program: Education Stabilization Fund (ALN 84.425) – United States Department of Education – Virginia Department of Education; Federal Award Year: 2024. Prior Year Audit Finding Number: N/A Criteria: 2 CFR section 200.313(d)(2) states: A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition: The School Board began purchasing equipment under this program in 2022. A physical inventory was not performed during 2024. Cause: Procedures over equipment and property management not properly designed and implemented. Effect: Equipment and property not examined for any potential loss, damage, theft, or disposal. Questioned Costs: None Recommendation: Grant administrator should perform a physical inventory of property at least every two years Views of Responsible Officials and Planned Corrective Action: The Designees of the Grants Monitoring and Compliance team will oversee the completion of a physical inventory of all equipment that exceed $5,000 by October 31, 2026. The Grants team will also house documentation.
Finding 2024-001 – Equipment and Real Property Federal Program: Coal Miners Respiratory Impairment Treatment Clinics and Services ALN: 93.965 Federal Agency: U.S. Department of Health and Human Services Federal Award Years: July 1, 2023 through June 30, 2024 Criteria: 2 CFR section 200.313(d)(2) requires a physical inventory of federal property to be taken and the results to be reconciled with the property records at least once every two years. Condition Found, Including Perspective: The System did not conduct a physical inventory of the property purchased with federal funds and reconcile the inventory with the property records in 2024 nor in 2023. Therefore, the System was not in compliance with the applicable federal requirements. Possible Cause and Effect: The System lacks a formalized process to verify the condition and existence of federally funded purchased equipment and the System lacks a formalized process to reconcile these amounts back to the property records. Questioned Costs: None. Statistical Validity: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year: This is not a repeat finding. Recommendation We recommend that management strengthen procedures around performing a physical inventory of the property and reconciling the results at least once every two years. Views of Responsible Officials: Owensboro Health, Inc. concurs with this finding and is working to put procedures in place to perform a formalized physical inventory and a reconciliation of the results on at least a biannual basis.
Finding 2024-001 – Equipment and Real Property Federal Program: Coal Miners Respiratory Impairment Treatment Clinics and Services ALN: 93.965 Federal Agency: U.S. Department of Health and Human Services Federal Award Years: July 1, 2023 through June 30, 2024 Criteria: 2 CFR section 200.313(d)(2) requires a physical inventory of federal property to be taken and the results to be reconciled with the property records at least once every two years. Condition Found, Including Perspective: The System did not conduct a physical inventory of the property purchased with federal funds and reconcile the inventory with the property records in 2024 nor in 2023. Therefore, the System was not in compliance with the applicable federal requirements. Possible Cause and Effect: The System lacks a formalized process to verify the condition and existence of federally funded purchased equipment and the System lacks a formalized process to reconcile these amounts back to the property records. Questioned Costs: None. Statistical Validity: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding in the Prior Year: This is not a repeat finding. Recommendation We recommend that management strengthen procedures around performing a physical inventory of the property and reconciling the results at least once every two years. Views of Responsible Officials: Owensboro Health, Inc. concurs with this finding and is working to put procedures in place to perform a formalized physical inventory and a reconciliation of the results on at least a biannual basis.
Physical Inventory Observation Federal Program Information: Funding agency: U.S. Department of Health and Human Services Title: Head Start Cluster AL number: 93.600 Award number: 90CH01142504 90HE00049801C6 Criteria or Specific Requirement: Under 2 CFR 200 200.313(4)(2), a physical inventory of property must be taken at lease once every two years. The results should be reconciled with the general ledger. Condition: CAPSC has not performed a physical inventory in the last two years. Questioned Costs: None Effect: The capital asset listing and corresponding financial statement balances may be misstated or incomplete. Without taking a physical inventory, CAPSC may be overstating or understating capital assets in its financial statements. Cause: CAPSC has experienced turnover and, as a result, did not perform the physical inventory. Repeat: No Auditor's Recommendation: CAPSC should maintain its documentation of an entity-wide physical inventory of its capital assets performed every two years. Once completed, the listing should be reconciled to the general ledger control totals and the control totals adjusted to the balances supported by the physical inventory results. CAPSC should also implement procedures to retain adequate supporting documentation and ensure the proper recording of additions, deletions, and depreciation on a timely basis. View of Responsible Officials: CAPSC agrees with the audit finding and has written a corrective action plan.
Physical Inventory Observation Federal Program Information: Funding agency: U.S. Department of Health and Human Services Title: Head Start Cluster AL number: 93.600 Award number: 90CH01142504 90HE00049801C6 Criteria or Specific Requirement: Under 2 CFR 200 200.313(4)(2), a physical inventory of property must be taken at lease once every two years. The results should be reconciled with the general ledger. Condition: CAPSC has not performed a physical inventory in the last two years. Questioned Costs: None Effect: The capital asset listing and corresponding financial statement balances may be misstated or incomplete. Without taking a physical inventory, CAPSC may be overstating or understating capital assets in its financial statements. Cause: CAPSC has experienced turnover and, as a result, did not perform the physical inventory. Repeat: No Auditor's Recommendation: CAPSC should maintain its documentation of an entity-wide physical inventory of its capital assets performed every two years. Once completed, the listing should be reconciled to the general ledger control totals and the control totals adjusted to the balances supported by the physical inventory results. CAPSC should also implement procedures to retain adequate supporting documentation and ensure the proper recording of additions, deletions, and depreciation on a timely basis. View of Responsible Officials: CAPSC agrees with the audit finding and has written a corrective action plan.
Physical Inventory Observation Federal Program Information: Funding agency: U.S. Department of Health and Human Services Title: Head Start Cluster AL number: 93.600 Award number: 90CH01142504 90HE00049801C6 Criteria or Specific Requirement: Under 2 CFR 200 200.313(4)(2), a physical inventory of property must be taken at lease once every two years. The results should be reconciled with the general ledger. Condition: CAPSC has not performed a physical inventory in the last two years. Questioned Costs: None Effect: The capital asset listing and corresponding financial statement balances may be misstated or incomplete. Without taking a physical inventory, CAPSC may be overstating or understating capital assets in its financial statements. Cause: CAPSC has experienced turnover and, as a result, did not perform the physical inventory. Repeat: No Auditor's Recommendation: CAPSC should maintain its documentation of an entity-wide physical inventory of its capital assets performed every two years. Once completed, the listing should be reconciled to the general ledger control totals and the control totals adjusted to the balances supported by the physical inventory results. CAPSC should also implement procedures to retain adequate supporting documentation and ensure the proper recording of additions, deletions, and depreciation on a timely basis. View of Responsible Officials: CAPSC agrees with the audit finding and has written a corrective action plan.
Physical Inventory Observation Federal Program Information: Funding agency: U.S. Department of Health and Human Services Title: Head Start Cluster AL number: 93.600 Award number: 90CH01142504 90HE00049801C6 Criteria or Specific Requirement: Under 2 CFR 200 200.313(4)(2), a physical inventory of property must be taken at lease once every two years. The results should be reconciled with the general ledger. Condition: CAPSC has not performed a physical inventory in the last two years. Questioned Costs: None Effect: The capital asset listing and corresponding financial statement balances may be misstated or incomplete. Without taking a physical inventory, CAPSC may be overstating or understating capital assets in its financial statements. Cause: CAPSC has experienced turnover and, as a result, did not perform the physical inventory. Repeat: No Auditor's Recommendation: CAPSC should maintain its documentation of an entity-wide physical inventory of its capital assets performed every two years. Once completed, the listing should be reconciled to the general ledger control totals and the control totals adjusted to the balances supported by the physical inventory results. CAPSC should also implement procedures to retain adequate supporting documentation and ensure the proper recording of additions, deletions, and depreciation on a timely basis. View of Responsible Officials: CAPSC agrees with the audit finding and has written a corrective action plan.
Finding 2023-001 Assistance Listing: 93.889 Regional Healthcare System Coordinate for Disaster Preparedness Condition: The Center did not perform a physical inventory of the equipment provided to any member hospitals within the past two years. Criteria: 2 CFR 200.313 addresses requirements and conditions regarding equipment acquired under a Federal award. 2 CFR 200.313(d)(2) states that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Cause: Due to organizational turnover in fiscal year 2022 and again in fiscal year 2023, no physical inventory was completed during these years. Effect: The Center did not perform adequate procedures to ensure proper equipment management was taking place at member hospitals. Repeat finding: This is not a repeat finding. Questioned costs: None Recommendation: We recommend that The Center develop a policy and procedure to ensure that all member hospitals are visited at least once every two years for a physical equipment inspection. Views of responsible officials: Management concurs with this recommendation. See also corrective action plan.
Finding No. 2023-002: Equipment and Real Property Management Policy U.S. Department of Housing and Urban Development, CFDA 14.231, Emergency Solutions Grant Type of Finding: Significant Deficiency in Internal Controls over Compliance Compliance Requirement: Non-compliance Criteria: Per 2 CFR 200.313 the entity must use its own documented procedures surrounding the acquisition, safekeeping, maintenance, and disposal of all equipment and real property acquired with federal awards. Condition: When testing and evaluating the Organization’s compliance with documented policy surrounding the equipment and real property management, it was determined that the Organization does not have a documented policy. Additionally, although there is a listing of property and equipment this is not regularly reviewed or maintained. Cause: Program administrative staff are not familiar with equipment and real property management requirements of Federal grants and contracts. Effect/Context: As a result, the entity could inadvertently engage in an equipment or property transaction for which the appropriate standards were not followed. Questions Costs: None Repeat Finding from Prior Year: No Recommendation: Coachella Valley Rescue Mission should document and implement policy and procedures to comply with the standards surrounding equipment and real property management standards. Management’s Views and Corrective Action Plan: See the accompanying Management’s Views and Corrective Action Plan, which are considered part of this report.
Federal Agency - United States Department of Agriculture Federal Programs - Water and Waste Disposal Systems for Rural Communities - (10.760) Federal Award Years - 2019 State Agency - Not applicable Reference - 2023-002 Capital Asset Records - Material Weakness and Noncompliance Criteria - Management is responsible for maintaining capital asset records that are accurate. Code of Federal Regulations (CFR) §200.313(d) Equipment states, at a minimum, the following must be met: 1. Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, 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. 2. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. 3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. 4. Adequate maintenance procedures must be developed to keep the property in good condition. 5. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition - The capital asset records are insufficient as they do not include the source of funding, acquisition date, or the cost of the property as well as certain other information required by Federal regulations. Additionally, no physical inventory has occurred nor is there a control system that has been implemented over these assets. Cause - The Town has not maintained capital asset records or engaged a third party export. Effect of Condition - The Town is not in compliance with CFR §200.313(d). Additionally, capital assets have been excluded from these financial statements. Repeat Finding - This is a repeat finding of item 2022-002 as reported for the year ended December 31, 2022. Recommendation - We recommend the Town invest in capital asset software to maintain the capital assets and have a physical inventory performed. Questioned Costs - None. Perspective - No other material omissions were noted in the financial statements. This is an isolated issue. View’s of Responsible Officials and Planned Corrective Actions - Management will look at investing in a capital asset software and having a physical inventory performed.
FINDING 2023-001 Subject: CDBG - Entitlement Grants Cluster - Equipment and Real Property Management Federal Agency: Department of Housing and Urban Development Federal Program: Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Year (or Other Identifying Numbers): B-18-MC-18-0001, B-19-MC-18-0001, B-20-MC-18-0001, B-21-MC-18-0001, B-22-MC-18-0001, B-23-MC-18-0001 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context Community Development Block Grants/Entitlement Grants (CDBG) may be used to acquire real and personal property, supplies, and equipment. Equipment purchased with CDBG funds requires management, among other things, to maintain property records, complete a physical inventory, safeguard against loss, and properly maintain the equipment. A property record or capital asset listing, which would include the following attributes, is to be maintained for assets purchased. 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). Who holds title. The acquisition date. 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. Although the City maintained property records, adequate property records for assets purchased with CDBG award funds was not maintained. The one asset purchased with CDBG funds, totaling $222,333, was added to the property records, but did not include the source of funding for the property, who holds title, percentage of federal participation, and condition of the property. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, 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. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause A proper system of internal controls was not designed by management of the City. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. The City did not add an improvement as they were unaware that this should be added to the property records. In addition, the property records did not include all the necessary fields as the City did not know the additional information was needed. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, not all required elements of the property record were documented for assets acquired with CDBG award funds nor were all assets added to the property records. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the City establish a proper system of internal controls and develop policies and procedures to ensure property records are maintained for all assets purchased and that all required elements are included within the property records. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria - Management is responsible for maintaining capital asset records that are accurate. Code of Federal Regulations (CFR) §200.313(d) Equipment states, at a minimum, the following must be met: 1. Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, 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. 2. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. 3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. 4. Adequate maintenance procedures must be developed to keep the property in good condition. 5. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition - The capital asset records are insufficient as they do not include the source of funding, acquisition date, or the cost of the property as well as certain other information required by Federal regulations. Additionally, no physical inventory has occurred nor is there a control system that has been implemented over these assets. Cause - The Town has not maintained capital asset records or engaged a third party expert. Effect of Condition - The Town is not in compliance with CFR §200.313(d). Additionally, capital assets have been excluded from these financial statements. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Recommendation - We recommend the Town invest in capital asset software to maintain the capital assets and have a physical inventory performed. Questioned Costs - None. Perspective - No other material omissions were noted in the financial statements. This is an isolated issue.
FINDING 2023-004 Subject: Water and Waste Disposal Systems for Rural Communities - Equipment and Real Property Management Federal Agency: Department of Agriculture Federal Program: Water and Waste Disposal Systems for Rural Communities Assistance Listings Number: 10.760 Federal Award Number and Year (or Other Identifying Number): FY 2023 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context The Town had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. A property record or capital asset listing, which would include the information listed below, is to be maintained for assets purchased that exceed the Town's capitalization threshold. In addition, a physical inventory of all capital assets should be completed at least every two years. Capital Asset Listing Information 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)). Who holds title. The acquisition date. 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. The Town purchased one asset, totaling $477,750, which exceeded the Town's capitalization threshold. The asset was determined not to have been recorded in property records, nor was the asset on the inventory listing. Additionally, the Town did not complete a capital asset inventory every two years as required. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 22 TOWN OF FRANKTON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, 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. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause A proper system of internal controls was not designed by the management of the Town. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the Town's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. The Clerk-Treasurer was new to the position as of January 1, 2024. The former Clerk-Treasurer was not knowledgeable on the compliance requirements of the federal award. The Town contracted with outside engineers to manage the compliance requirement, and there was no documentation that an inventory of capital assets had been completed. Additionally, the provided capital asset listing did not include the asset in question. Lastly, the capital asset listing included items that were under the capital asset threshold in the Town's Capital Asset Policy. INDIANA STATE BOARD OF ACCOUNTS 23 TOWN OF FRANKTON SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, a capital asset purchased with federal funds was not properly recorded in a capital asset ledger, and a physical inventory was not performed. Noncompliance with the provisions of federal regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the Town. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the Town design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure capital assets purchased with federal funds are included on a capital asset ledger and that a physical inventory is performed every two years. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: Airport Improvement Program - Equipment and Real Property Management Federal Agency: Department of Transportation Federal Program: Airport Improvement Program, COVID-19 Airports Programs, and Infrastructure Investment and Jobs Act Programs Assistance Listings Number: 20.106 Federal Award Number and Year (or Other Identifying Number): 3-18-0082-050 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 TERRE HAUTE REGIONAL AIRPORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Detailed capital asset records are to be maintained by the entity. The records should contain the equipment description (including serial number or other identification number), source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The Authority provided a capital asset list that only included the asset description and value amount. The listing did not include all the requirements as stated above. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, 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. . . ." Cause The Authority was unaware that they needed to maintain detailed capital asset records with requirements as stated above. Effect Without the proper implementation of an effectively designed system of internal controls, the Authority cannot ensure that all capital assets are being included in the records of the Authority. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 14 TERRE HAUTE REGIONAL AIRPORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the Authority's management strengthen its system of internal controls to ensure that they maintain detailed capital asset records that include all the requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Reference Number: 2023-002 Federal Agency: U.S. Department of Homeland Security Federal Program: Rail and Transit Security Grant Program ALN Number: 97.075 Contract Number: FE2019-RA-00004; FE2020-RA-00005; FE2021-RA-00004; FE2022-RA-00006 Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency-Non-Compliance (1) CRITERIA Equipment and Real Property Management - As stated in Uniform Grant Guidance - §200.313 Requirements for Equipment and Real Property Management: • Property records must be maintained 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), who holds title, the acquisition date, 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 sales price of the property (2 CFR section 200.313(d)(1)). • A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). (2) CONDITION/PERSPECTIVE The MTA has Equipment and Real Property management procedures in place. MTA has corporate policies and procedures regarding Equipment and Real Property management. We tested the Rail and Transit Security Grant Program’s Equipment and Real Property management compliance. Based on our review of the Equipment and Real Property for this program, we noted that the physical inventory of the program property was not taken in the last two years, as required by 2 CFR section 200.313(d)(2). (3) CAUSE MTA did not ensure that the physical inventory of the program property was completed and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). (4) EFFECT MTA may be considered non-compliant related to Equipment and Real Property management compliance as required by 2 CFR section 200.313(d)(2). (5) REPEAT FINDING No (6) RECOMMENDATION We recommend that MTA ensure that the physical inventory of the property must be taken and the results reconciled with the property records at least once every two years as required by 2 CFR section 200.313(d)(2). (7) QUESTIONED COST None. (8) VIEWS OF RESPONSIBLE OFFICIAL The MTA Office of Security is acknowledging the finding. The MTA Office of Security is implementing an update on our procedures for equipment inventory management. We will be working with the Office of Security’s Director of Quality Assurance along with MTAHQ Audit, to help us review all equipment inventory listings and physical inventory inspection of federally funded purchased equipment. We will be implementing an internal agreement between MTA Office of Security and the MTA Agency awarded federal funds under grant programs managed by HQ Office of Security. This agreement will include all terms and conditions applicable to the specific grant award. Also, see “Corrective Action Plan”.