Finding Number: 2023‐001 Repeat Finding: Yes, 2022‐002 Program Names/Assistance Listing Titles: COVID‐19 Education Stabilization Fund; COVID‐19 Emergency Connectivity Fund Program Assistance Listing Numbers: 84.425C, 84.425D, 84.425D, 84.425U, 84.425W, 32.009 Federal Award Numbers: N/A, S425D200038, S425D210038, S425U210038, S425W210003, N/A Questioned Costs: N/A Federal Agency(ies): U.S. Department of Education, Federal Communications Commission Pass‐Through Agency(ies): Arizona Department of Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Equipment and Real Property Management Criteria According to Office of Management and Budget Uniform Guidance requirements 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. Condition The District did not have documentation to support that a physical inventory was performed and reconciled at least once in the past two years. Cause Due to a cyber security incident, physical inventory records could not be recovered. Effect The District was not in compliance with the requirements set forth by the federal government. Context The District did not maintain documentation for the most recent physical inventory in July 2022 due to data loss from a cyber security incident. The District last performed and reconciled a physical inventory in fiscal year 2015. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure that a physical inventory is performed and reconciled to asset records at least once every two years. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: Yes, 2022‐002 Program Names/Assistance Listing Titles: COVID‐19 Education Stabilization Fund; COVID‐19 Emergency Connectivity Fund Program Assistance Listing Numbers: 84.425C, 84.425D, 84.425D, 84.425U, 84.425W, 32.009 Federal Award Numbers: N/A, S425D200038, S425D210038, S425U210038, S425W210003, N/A Questioned Costs: N/A Federal Agency(ies): U.S. Department of Education, Federal Communications Commission Pass‐Through Agency(ies): Arizona Department of Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Equipment and Real Property Management Criteria According to Office of Management and Budget Uniform Guidance requirements 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. Condition The District did not have documentation to support that a physical inventory was performed and reconciled at least once in the past two years. Cause Due to a cyber security incident, physical inventory records could not be recovered. Effect The District was not in compliance with the requirements set forth by the federal government. Context The District did not maintain documentation for the most recent physical inventory in July 2022 due to data loss from a cyber security incident. The District last performed and reconciled a physical inventory in fiscal year 2015. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure that a physical inventory is performed and reconciled to asset records at least once every two years. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: Yes, 2022‐002 Program Names/Assistance Listing Titles: COVID‐19 Education Stabilization Fund; COVID‐19 Emergency Connectivity Fund Program Assistance Listing Numbers: 84.425C, 84.425D, 84.425D, 84.425U, 84.425W, 32.009 Federal Award Numbers: N/A, S425D200038, S425D210038, S425U210038, S425W210003, N/A Questioned Costs: N/A Federal Agency(ies): U.S. Department of Education, Federal Communications Commission Pass‐Through Agency(ies): Arizona Department of Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Equipment and Real Property Management Criteria According to Office of Management and Budget Uniform Guidance requirements 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. Condition The District did not have documentation to support that a physical inventory was performed and reconciled at least once in the past two years. Cause Due to a cyber security incident, physical inventory records could not be recovered. Effect The District was not in compliance with the requirements set forth by the federal government. Context The District did not maintain documentation for the most recent physical inventory in July 2022 due to data loss from a cyber security incident. The District last performed and reconciled a physical inventory in fiscal year 2015. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure that a physical inventory is performed and reconciled to asset records at least once every two years. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: Yes, 2022‐002 Program Names/Assistance Listing Titles: COVID‐19 Education Stabilization Fund; COVID‐19 Emergency Connectivity Fund Program Assistance Listing Numbers: 84.425C, 84.425D, 84.425D, 84.425U, 84.425W, 32.009 Federal Award Numbers: N/A, S425D200038, S425D210038, S425U210038, S425W210003, N/A Questioned Costs: N/A Federal Agency(ies): U.S. Department of Education, Federal Communications Commission Pass‐Through Agency(ies): Arizona Department of Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Equipment and Real Property Management Criteria According to Office of Management and Budget Uniform Guidance requirements 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. Condition The District did not have documentation to support that a physical inventory was performed and reconciled at least once in the past two years. Cause Due to a cyber security incident, physical inventory records could not be recovered. Effect The District was not in compliance with the requirements set forth by the federal government. Context The District did not maintain documentation for the most recent physical inventory in July 2022 due to data loss from a cyber security incident. The District last performed and reconciled a physical inventory in fiscal year 2015. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure that a physical inventory is performed and reconciled to asset records at least once every two years. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: Yes, 2022‐002 Program Names/Assistance Listing Titles: COVID‐19 Education Stabilization Fund; COVID‐19 Emergency Connectivity Fund Program Assistance Listing Numbers: 84.425C, 84.425D, 84.425D, 84.425U, 84.425W, 32.009 Federal Award Numbers: N/A, S425D200038, S425D210038, S425U210038, S425W210003, N/A Questioned Costs: N/A Federal Agency(ies): U.S. Department of Education, Federal Communications Commission Pass‐Through Agency(ies): Arizona Department of Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Equipment and Real Property Management Criteria According to Office of Management and Budget Uniform Guidance requirements 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. Condition The District did not have documentation to support that a physical inventory was performed and reconciled at least once in the past two years. Cause Due to a cyber security incident, physical inventory records could not be recovered. Effect The District was not in compliance with the requirements set forth by the federal government. Context The District did not maintain documentation for the most recent physical inventory in July 2022 due to data loss from a cyber security incident. The District last performed and reconciled a physical inventory in fiscal year 2015. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure that a physical inventory is performed and reconciled to asset records at least once every two years. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: Yes, 2022‐002 Program Names/Assistance Listing Titles: COVID‐19 Education Stabilization Fund; COVID‐19 Emergency Connectivity Fund Program Assistance Listing Numbers: 84.425C, 84.425D, 84.425D, 84.425U, 84.425W, 32.009 Federal Award Numbers: N/A, S425D200038, S425D210038, S425U210038, S425W210003, N/A Questioned Costs: N/A Federal Agency(ies): U.S. Department of Education, Federal Communications Commission Pass‐Through Agency(ies): Arizona Department of Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Equipment and Real Property Management Criteria According to Office of Management and Budget Uniform Guidance requirements 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. Condition The District did not have documentation to support that a physical inventory was performed and reconciled at least once in the past two years. Cause Due to a cyber security incident, physical inventory records could not be recovered. Effect The District was not in compliance with the requirements set forth by the federal government. Context The District did not maintain documentation for the most recent physical inventory in July 2022 due to data loss from a cyber security incident. The District last performed and reconciled a physical inventory in fiscal year 2015. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure that a physical inventory is performed and reconciled to asset records at least once every two years. Views of Responsible Officials See Corrective Action Plan.
FINDING 2023-002 EQUIPMENT AND REAL PROPERTY MANAGEMENT SIGNIFICANT DEFICIENCY Federal Program: Education Stabilization Fund Assistance Listing Number: 84.425 Criteria 2 CFR 200.313(d) contains equipment management requirements which dictate property records entities must maintain and the need for procedures to adequately safeguard and maintain assets acquired with federal funding. Condition Sufficient and appropriate documentation did not exist to support a physical inventory had been completed for all assets once in the last two years. Cause The School does not have internal controls and procedures in place to ensure a physical inventory is completed at least every two years. Effect Failing to complete an inventory could result in inaccurate records of assets. Recommendation We recommend the School develop internal controls to ensure an inventory is completed at least every two years. Views of Responsible Officials The School’s Corrective Action Plan is included on pages 27.
FINDING 2023-002 EQUIPMENT AND REAL PROPERTY MANAGEMENT SIGNIFICANT DEFICIENCY Federal Program: Education Stabilization Fund Assistance Listing Number: 84.425 Criteria 2 CFR 200.313(d) contains equipment management requirements which dictate property records entities must maintain and the need for procedures to adequately safeguard and maintain assets acquired with federal funding. Condition Sufficient and appropriate documentation did not exist to support a physical inventory had been completed for all assets once in the last two years. Cause The School does not have internal controls and procedures in place to ensure a physical inventory is completed at least every two years. Effect Failing to complete an inventory could result in inaccurate records of assets. Recommendation We recommend the School develop internal controls to ensure an inventory is completed at least every two years. Views of Responsible Officials The School’s Corrective Action Plan is included on pages 27.
SIGNIFICANT DEFICENCY and NONCOMPLIANCE Equipment/Real Property Management Condition: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.303 “the non-federal entity must establish and maintain effective internal control over the Federal aware 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.” Condition: When investigating the controls and compliance related to equipment management, we became aware that the District does not have a inventory tracking managmenet system in place for non-technology items. Cause: The controls related to equipment maintenance for Education Stabilization Fund are non-existent. Effect: There is no internal control related to non-technology equipment maintenance. Recommendations: The Board of Directors, the Director and key positions of management should adequately document internal control procedures for equipment inventory, log maintenance, and dispositions requirements consistent with 2 CFR sections 200.313(c) through (e). Board should then periodically check that all procedures agreed upon are operational and effective, and adjust procedures as needed. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.
SIGNIFICANT DEFICENCY and NONCOMPLIANCE Equipment/Real Property Management Condition: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.303 “the non-federal entity must establish and maintain effective internal control over the Federal aware 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.” Condition: When investigating the controls and compliance related to equipment management, we became aware that the District does not have a inventory tracking managmenet system in place for non-technology items. Cause: The controls related to equipment maintenance for Education Stabilization Fund are non-existent. Effect: There is no internal control related to non-technology equipment maintenance. Recommendations: The Board of Directors, the Director and key positions of management should adequately document internal control procedures for equipment inventory, log maintenance, and dispositions requirements consistent with 2 CFR sections 200.313(c) through (e). Board should then periodically check that all procedures agreed upon are operational and effective, and adjust procedures as needed. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.
SIGNIFICANT DEFICENCY and NONCOMPLIANCE Equipment/Real Property Management Condition: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.303 “the non-federal entity must establish and maintain effective internal control over the Federal aware 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.” Condition: When investigating the controls and compliance related to equipment management, we became aware that the District does not have a inventory tracking managmenet system in place for non-technology items. Cause: The controls related to equipment maintenance for Education Stabilization Fund are non-existent. Effect: There is no internal control related to non-technology equipment maintenance. Recommendations: The Board of Directors, the Director and key positions of management should adequately document internal control procedures for equipment inventory, log maintenance, and dispositions requirements consistent with 2 CFR sections 200.313(c) through (e). Board should then periodically check that all procedures agreed upon are operational and effective, and adjust procedures as needed. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.
Finding Number: 2023-002 AL Number and Title: Education Stabilization Fund – AL# 84.425 Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education 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) which requires 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 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 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. The School District purchased 6 buses at a total amount of $643,208 with funds from the ARP ESSER grant and due to deficiencies in inventory controls, failed to add the assets to the District inventory system. The lack of maintaining the required property records not only violates federal grant requirements but also increases the risk of noncompliance with grant requirements going undetected in a timely manner. The School District should review the Equipment Inventory System and make the proper adjustments to include all assets purchased with ARP ESSER Funds. Officials’ Response: See corrective action plan.
Finding Number: 2023-002 AL Number and Title: Education Stabilization Fund – AL# 84.425 Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education 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) which requires 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 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 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. The School District purchased 6 buses at a total amount of $643,208 with funds from the ARP ESSER grant and due to deficiencies in inventory controls, failed to add the assets to the District inventory system. The lack of maintaining the required property records not only violates federal grant requirements but also increases the risk of noncompliance with grant requirements going undetected in a timely manner. The School District should review the Equipment Inventory System and make the proper adjustments to include all assets purchased with ARP ESSER Funds. Officials’ Response: See corrective action plan.
Finding Number: 2023-002 AL Number and Title: Education Stabilization Fund – AL# 84.425 Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education 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) which requires 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 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 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. The School District purchased 6 buses at a total amount of $643,208 with funds from the ARP ESSER grant and due to deficiencies in inventory controls, failed to add the assets to the District inventory system. The lack of maintaining the required property records not only violates federal grant requirements but also increases the risk of noncompliance with grant requirements going undetected in a timely manner. The School District should review the Equipment Inventory System and make the proper adjustments to include all assets purchased with ARP ESSER Funds. Officials’ Response: See corrective action plan.
Criteria 2 CFR 200.313, Equipment , requires the following with respect to equipment purchased with Federal Funds: (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. Condition: The District does not currently maintain a detailed accounting/list of its capital assets, including Federal assets. The District does not have a recent replacement cost valuation for insurance purposes. We consider this finding to be a material weakness in internal control over major programs. Questioned Costs: N/A Context: The District has not updated or prepared a detailed listing of capital assets in recent years, but rather has relied upon the auditor to provided non-auditing services in this area. The District has not obtained an insurance valuation of its property in recent years. Effect: The District is out of compliance with Federal property regulations as a result of this condition. Cause: The cause of the condition is because the District has not contracted with any third parties to accomplish the task, nor has it allocated internal resources to the condition. Recommendation: We recommend that the District contract with a third party asset vendor or allocate internal business office resources to performing a detailed inventory and accounting of capital assets. We also recommend the District obtain an appraisal for insurance purposes to ensure that the District's property is appropriately insured in the event of loss. Management Response: Management agrees with this finding. Management is in the process of determining the most efficient way to handle this process and is evaluating the cost-benefit of implementing various processes and procedures.
Criteria 2 CFR 200.313, Equipment , requires the following with respect to equipment purchased with Federal Funds: (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. Condition: The District does not currently maintain a detailed accounting/list of its capital assets, including Federal assets. The District does not have a recent replacement cost valuation for insurance purposes. We consider this finding to be a material weakness in internal control over major programs. Questioned Costs: N/A Context: The District has not updated or prepared a detailed listing of capital assets in recent years, but rather has relied upon the auditor to provided non-auditing services in this area. The District has not obtained an insurance valuation of its property in recent years. Effect: The District is out of compliance with Federal property regulations as a result of this condition. Cause: The cause of the condition is because the District has not contracted with any third parties to accomplish the task, nor has it allocated internal resources to the condition. Recommendation: We recommend that the District contract with a third party asset vendor or allocate internal business office resources to performing a detailed inventory and accounting of capital assets. We also recommend the District obtain an appraisal for insurance purposes to ensure that the District's property is appropriately insured in the event of loss. Management Response: Management agrees with this finding. Management is in the process of determining the most efficient way to handle this process and is evaluating the cost-benefit of implementing various processes and procedures.
Criteria 2 CFR 200.313, Equipment , requires the following with respect to equipment purchased with Federal Funds: (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. Condition: The District does not currently maintain a detailed accounting/list of its capital assets, including Federal assets. The District does not have a recent replacement cost valuation for insurance purposes. We consider this finding to be a material weakness in internal control over major programs. Questioned Costs: N/A Context: The District has not updated or prepared a detailed listing of capital assets in recent years, but rather has relied upon the auditor to provided non-auditing services in this area. The District has not obtained an insurance valuation of its property in recent years. Effect: The District is out of compliance with Federal property regulations as a result of this condition. Cause: The cause of the condition is because the District has not contracted with any third parties to accomplish the task, nor has it allocated internal resources to the condition. Recommendation: We recommend that the District contract with a third party asset vendor or allocate internal business office resources to performing a detailed inventory and accounting of capital assets. We also recommend the District obtain an appraisal for insurance purposes to ensure that the District's property is appropriately insured in the event of loss. Management Response: Management agrees with this finding. Management is in the process of determining the most efficient way to handle this process and is evaluating the cost-benefit of implementing various processes and procedures.
Criteria 2 CFR 200.313, Equipment , requires the following with respect to equipment purchased with Federal Funds: (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. Condition: The District does not currently maintain a detailed accounting/list of its capital assets, including Federal assets. The District does not have a recent replacement cost valuation for insurance purposes. We consider this finding to be a material weakness in internal control over major programs. Questioned Costs: N/A Context: The District has not updated or prepared a detailed listing of capital assets in recent years, but rather has relied upon the auditor to provided non-auditing services in this area. The District has not obtained an insurance valuation of its property in recent years. Effect: The District is out of compliance with Federal property regulations as a result of this condition. Cause: The cause of the condition is because the District has not contracted with any third parties to accomplish the task, nor has it allocated internal resources to the condition. Recommendation: We recommend that the District contract with a third party asset vendor or allocate internal business office resources to performing a detailed inventory and accounting of capital assets. We also recommend the District obtain an appraisal for insurance purposes to ensure that the District's property is appropriately insured in the event of loss. Management Response: Management agrees with this finding. Management is in the process of determining the most efficient way to handle this process and is evaluating the cost-benefit of implementing various processes and procedures.
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND AND HOMELESS CHILDREN AND YOUTH - AL NUMBERS 84.425U AND 84.425W PASS-THROUGH NUMBER 3505 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-003. Equipment and Real Property Management Criteria or specific requirement: Property records should be maintained for equipment acquired with federal awards as specified in OMB 2 CFR section 200.313. Condition: A test of the COVID-19 Education Stabilization Fund disbursements and walkthrough procedures revealed that three equipment items purchased with a cost greater than $1,000 each were not recorded in the District's equipment subsidiary ledger. The total cost of the equipment was $45,468. Cause: Lack of internal controls over the equipment subsidiary ledger. Effect or potential effect: The District's equipment subsidiary records were not accurate. Context: All equipment purchases (3) from the federal program were reviewed. The total population consisted of two invoices totaling $47,927 that contained three equipment items. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District concurs with this finding. Deficiencies in the internal control activities adversely affected the District's ability to record program expenditures in the District's equipment subsidiary ledger. District management recognizes the importance of recording such expenditures so that these assets can accurately be traced over time.
U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - AMERICAN RESCUE PLAN - ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND AND HOMELESS CHILDREN AND YOUTH - AL NUMBERS 84.425U AND 84.425W PASS-THROUGH NUMBER 3505 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-003. Equipment and Real Property Management Criteria or specific requirement: Property records should be maintained for equipment acquired with federal awards as specified in OMB 2 CFR section 200.313. Condition: A test of the COVID-19 Education Stabilization Fund disbursements and walkthrough procedures revealed that three equipment items purchased with a cost greater than $1,000 each were not recorded in the District's equipment subsidiary ledger. The total cost of the equipment was $45,468. Cause: Lack of internal controls over the equipment subsidiary ledger. Effect or potential effect: The District's equipment subsidiary records were not accurate. Context: All equipment purchases (3) from the federal program were reviewed. The total population consisted of two invoices totaling $47,927 that contained three equipment items. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District concurs with this finding. Deficiencies in the internal control activities adversely affected the District's ability to record program expenditures in the District's equipment subsidiary ledger. District management recognizes the importance of recording such expenditures so that these assets can accurately be traced over time.
2 CFR 3474.1 gives regulatory effect to the Department of Education for 2 CFR §200.313(d) which requires procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, at 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. (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. The United States Department of Education (USDE) clarified in the 2023 Office of Management and Budget (OMB) Compliance Supplement, "Any purchases with Education Stabilization Fund money in this category [minor remodeling] are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, “Equipment/Real Property Management” of the Compliance Supplement." Due to the lack of an internal control(s) over inventory management for equipment and real property purchased from Federal grants, a school building renovation project for the School Based Health Center, in the amount of $374,154 paid from the COVID- 19 Education Stabilization Fund - AL #84.425C Governor’s Emergency Education Relief (GEER) funding was not added to the capital asset records of the School District. Noncompliance with the requirements of Federal grants may result in the loss of current or future federal funding and possible questioned costs in future audits. The School District should establish an internal control(s) over equipment and real property paid for from Federal grants to ensure that such assets with an acquisition cost which equals or exceeds the lesser of the School District’s capitalization threshold or $5,000, are added and maintained in the capital asset records until disposition.
2 CFR 3474.1 gives regulatory effect to the Department of Education for 2 CFR §200.313(d) which requires procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, at 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. (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. The United States Department of Education (USDE) clarified in the 2023 Office of Management and Budget (OMB) Compliance Supplement, "Any purchases with Education Stabilization Fund money in this category [minor remodeling] are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, “Equipment/Real Property Management” of the Compliance Supplement." Due to the lack of an internal control(s) over inventory management for equipment and real property purchased from Federal grants, a school building renovation project for the School Based Health Center, in the amount of $374,154 paid from the COVID- 19 Education Stabilization Fund - AL #84.425C Governor’s Emergency Education Relief (GEER) funding was not added to the capital asset records of the School District. Noncompliance with the requirements of Federal grants may result in the loss of current or future federal funding and possible questioned costs in future audits. The School District should establish an internal control(s) over equipment and real property paid for from Federal grants to ensure that such assets with an acquisition cost which equals or exceeds the lesser of the School District’s capitalization threshold or $5,000, are added and maintained in the capital asset records until disposition.
2 CFR 3474.1 gives regulatory effect to the Department of Education for 2 CFR §200.313(d) which requires procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, at 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. (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. The United States Department of Education (USDE) clarified in the 2023 Office of Management and Budget (OMB) Compliance Supplement, "Any purchases with Education Stabilization Fund money in this category [minor remodeling] are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, “Equipment/Real Property Management” of the Compliance Supplement." Due to the lack of an internal control(s) over inventory management for equipment and real property purchased from Federal grants, a school building renovation project for the School Based Health Center, in the amount of $374,154 paid from the COVID- 19 Education Stabilization Fund - AL #84.425C Governor’s Emergency Education Relief (GEER) funding was not added to the capital asset records of the School District. Noncompliance with the requirements of Federal grants may result in the loss of current or future federal funding and possible questioned costs in future audits. The School District should establish an internal control(s) over equipment and real property paid for from Federal grants to ensure that such assets with an acquisition cost which equals or exceeds the lesser of the School District’s capitalization threshold or $5,000, are added and maintained in the capital asset records until disposition.
2 CFR 3474.1 gives regulatory effect to the Department of Education for 2 CFR §200.313(d) which requires procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, at 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. (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. The United States Department of Education (USDE) clarified in the 2023 Office of Management and Budget (OMB) Compliance Supplement, "Any purchases with Education Stabilization Fund money in this category [minor remodeling] are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, “Equipment/Real Property Management” of the Compliance Supplement." Due to the lack of an internal control(s) over inventory management for equipment and real property purchased from Federal grants, a school building renovation project for the School Based Health Center, in the amount of $374,154 paid from the COVID- 19 Education Stabilization Fund - AL #84.425C Governor’s Emergency Education Relief (GEER) funding was not added to the capital asset records of the School District. Noncompliance with the requirements of Federal grants may result in the loss of current or future federal funding and possible questioned costs in future audits. The School District should establish an internal control(s) over equipment and real property paid for from Federal grants to ensure that such assets with an acquisition cost which equals or exceeds the lesser of the School District’s capitalization threshold or $5,000, are added and maintained in the capital asset records until disposition.
WILLIAMSVILLE COMMUNITY UNIT SCHOOL DISTRICT 15 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2023 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER: 2023- 002 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: COVID 19: Education Stabilization Fund (2022) 4. Project No.: 4998-E3 5. CFDA No.: 84.425U-COVID 19 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Equipment and Real Property Management compliance requirements require that property records be maintained that include a description of the property, a serial number or other identification number, the source of funding of 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 the sales price of the property. (2 CFR section 200.313(d)(1)) 9. Condition The District is not maintaining property records required by 2 CFR section 200.313(d)(1). 10. Questioned Costs None 11. Context The inventory of equipment is material to the program. 12. Effect The District is not in compliance with Equipment and Real Property Management compliance requirements. 13. Cause Documentation for equipment purchases is retained by the District; however, a comprehensive record of equipment purchased with Education Stabilization Funds is not maintained. 14. Recommendation The District should assign an employee, preferably with knowledge of applicable federal grant expenditures, to prepare and maintain the District's property records and ensure the listing is complete and meets the requirements of 2 CFR section 200.313(d)(1). 15. Management's response Management will implement the auditor's recommendation for the year ended June 30, 2024.
Criteria or specific requirement (including statutory, regulatory, or other citation) - The Code of Federal Regulations (CFR) Title 2, part 200.313(d) states that the non-federal entity must maintain property records that include a description of the property, a serial number or other identification number, the source of funding, who holds title, the acquisition date, the 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. Condition - The District did not maintain the proper property records as required under CFR Title 2, part 200.313(d). Questioned Costs - None. Context - The District maintained an inventory control list for property purchased with grant funds. However, the listing did not adequately identify categories for unique identification or serial number, funding source (including in-kind) and disposition of property date. Effect - Noncompliance with the federal award program's Equipment and Real Property Management occured. Cause - Management has not ensured compliance with the Equipment and Real Property Management requirements. Recommendation - Management needs to expand their existing listing to include the required missing elements related to the Equipment and Real Property Management compliance requirements. Management's response - There is no disagreement with this finding and the District will update the invenory control sheet to include all of the required elements to ensure the District is complying with the Equipment and Real Property compliance requirements.
Criteria or specific requirement (including statutory, regulatory, or other citation) - The Code of Federal Regulations (CFR) Title 2, part 200.313(d) states that the non-federal entity must maintain property records that include a description of the property, a serial number or other identification number, the source of funding, who holds title, the acquisition date, the 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. Condition - The District did not maintain the proper property records as required under CFR Title 2, part 200.313(d). Questioned Costs - None. Context - The District maintained an inventory control list for property purchased with grant funds. However, the listing did not adequately identify categories for unique identification or serial number, funding source (including in-kind) and disposition of property date. Effect - Noncompliance with the federal award program's Equipment and Real Property Management occured. Cause - Management has not ensured compliance with the Equipment and Real Property Management requirements. Recommendation - Management needs to expand their existing listing to include the required missing elements related to the Equipment and Real Property Management compliance requirements. Management's response - There is no disagreement with this finding and the District will update the invenory control sheet to include all of the required elements to ensure the District is complying with the Equipment and Real Property compliance requirements.
Criteria or specific requirement (including statutory, regulatory, or other citation) - The Code of Federal Regulations (CFR) Title 2, part 200.313(d) states that the non-federal entity must maintain property records that include a description of the property, a serial number or other identification number, the source of funding, who holds title, the acquisition date, the 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. Condition - The District did not maintain the proper property records as required under CFR Title 2, part 200.313(d). Questioned Costs - None. Context - The District maintained an inventory control list for property purchased with grant funds. However, the listing did not adequately identify categories for unique identification or serial number, funding source (including in-kind) and disposition of property date. Effect - Noncompliance with the federal award program's Equipment and Real Property Management occured. Cause - Management has not ensured compliance with the Equipment and Real Property Management requirements. Recommendation - Management needs to expand their existing listing to include the required missing elements related to the Equipment and Real Property Management compliance requirements. Management's response - There is no disagreement with this finding and the District will update the invenory control sheet to include all of the required elements to ensure the District is complying with the Equipment and Real Property compliance requirements.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Assistance Number – Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or Specific Requirement – Equipment and Real Property Management In accordance with 2 CFR Section 200.313, a non-federal entity must manage equipment that was procured through the use of federal funds by: maintaining property records, performing a physical inventory once every two years, controls must be implemented to safeguard against loss, and adequate maintenance procedures developed. Condition – During testing of equipment, a complete listing of all property and equipment purchased with federal funds with required information per 2 CFR 200.313(d)(1) was not maintained. A physical inventory of property and equipment was not completed in the past two years. Questioned Costs – None noted. Context – The Institute purchased two pieces of equipment totaling $142,986 during 2023. Both pieces of equipment were included in a detail listing of all equipment the Institute maintains. However, during further discussions with the Institute, they were unable to provide a complete listing of equipment purchased through the use of federal funds with all required information. Effect – Equipment purchased through the use of federal funds is not maintained or disposed of in accordance with the Uniform Guidance. Cause – The Institute's misunderstanding of the requirements. Identification as a Repeat Finding, if applicable – Not a repeat finding. Recommendation – Policies and procedures should be modified to ensure that management understands the equipment policies and procedures outlined by the Uniform Guidance and that the Institute is in compliance. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
2 CFR 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.313 (d) which states 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. (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 The School District used federal Education Stabilization Funds for capital outlay expenditures for a restroom upgrade of $222,512. Due to lack of policies and procedures, the School District failed to record the upgrade in their capital asset system. Furthermore, the School District also failed to perform a physical inventory and reconcile the property records for fiscal year 2023. Noncompliance with the requirements of Federal grants may result in the loss of current or future federal funding and possible questioned costs in future audits. Also, failure to include equipment and capital assets purchases on the School District asset listing could result in misappropriation of the equipment. The School District should establish and implement policies and procedures over equipment and real property paid for from Federal grants to ensure that such assets with an acquisition cost which equals or exceeds the lesser of the School District’s capitalization threshold or $5,000, are added and maintained in the capital asset records until disposition. Additionally, the School District should implement procedures to verify that all equipment is recorded, and the required physical inventory is completed at least once every two years.
2 CFR 3474.1 gives regulatory effect to the Department of Education for 2 CFR 200.313 (d) which states 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. (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 The School District used federal Education Stabilization Funds for capital outlay expenditures for a restroom upgrade of $222,512. Due to lack of policies and procedures, the School District failed to record the upgrade in their capital asset system. Furthermore, the School District also failed to perform a physical inventory and reconcile the property records for fiscal year 2023. Noncompliance with the requirements of Federal grants may result in the loss of current or future federal funding and possible questioned costs in future audits. Also, failure to include equipment and capital assets purchases on the School District asset listing could result in misappropriation of the equipment. The School District should establish and implement policies and procedures over equipment and real property paid for from Federal grants to ensure that such assets with an acquisition cost which equals or exceeds the lesser of the School District’s capitalization threshold or $5,000, are added and maintained in the capital asset records until disposition. Additionally, the School District should implement procedures to verify that all equipment is recorded, and the required physical inventory is completed at least once every two years.
SHELBYVILLE COMMUNITY UNIT SCHOOL DISTRICT 4 SCHEDULE OF FINDINGS AND QUESTIONED COSTS Year Ending June 30, 2023 SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER: 2023- 001 2. THIS FINDING IS: __X__ NEW ___Repeat from Prior Year? 3. Federal Program Name and Year: COVID 19: Education Stabilization Fund (2022) 4. Project No.: 4998-E3 5. CFDA No.: 84.425U-COVID 19 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Equipment and Real Property Management compliance requirements require that property records be maintained that include a description of the property, a serial number or other identification number, the source of funding of 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 the sales price of the property. (2 CFR section 200.313(d)(1)) 9. Condition The District's property records did not include all equipment purchased with Education Stabilization Funding. 10. Questioned Costs None 11. Context The inventory of equipment is material to the program. 12. Effect The District is not in compliance with Equipment and Real Property Management compliance requirements. 13. Cause A material amount of smartboards were purchased for District classrooms and were not included in the inventory of equipment purchased with Education Stabilization Funding. 14. Recommendation The District should assign an employee independent of the preparer, preferably with knowledge of applicable federal grant expenditures, to review the District's property records on a periodic basis to ensure the listing is complete and meets the requirements of 2 CFR section 200.313(d)(1). 15. Management's response Management will implement the auditor's recommendation for the year ended June 30, 2024.
MATERIAL WEAKNESS U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - EDUCATION STABILIZATION FUND - AL NUMBER 84.425D and 84.425U PASS-THROUGH NUMBER 4801 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001. Equipment and Real Property Management Criteria or specific requirement: Property records should be maintained for equipment acquired with federal awards as specified in OMB 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: A review of the equipment subsidiary ledger revealed that no equipment items purchased with Education Stabilization Funds in fiscal year 2023, were added to the ledger. The total cost of the equipment was $640,899. Also, the District could not account for 1 of 4 Education Stabilization Fund equipment items selected for sighting, costing $1,177. Cause: Lack of internal controls over the equipment subsidiary ledger. Effect or potential effect: The District's equipment subsidiary records did not include any equipment items purchased in fiscal year 2023. Context: All equipment items purchased in fiscal year 2023, were not added to the equipment subsidiary ledger for a total cost of $640,899. Also, 4 equipment items ($4,709) from a total of 40 equipment items ($47,094) that were included on the equipment subsidiary ledger were selected for observation. The sample was statistically valid. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. In addition, the District should maintain proper records for equipment acquired with federal awards. Views of responsible officials: The Superintendent will work with the business manager and the technology coordinator to identify all items purchased with a cost greater than $1,000 that need to be properly recorded in the district's equipment subsidiary ledger. Items that are being retired will be approved by the board and removed from the ledger. The modular buildings will be added immediately to the fixed asset list as well as the 10 Dell laptops. The laptop that the teacher lost will be removed from the fixed asset list and moving forward, all staff will complete an equipment incident form when equipment is lost or stolen. A police report will be filed for all stolen equipment.
MATERIAL WEAKNESS U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - EDUCATION STABILIZATION FUND - AL NUMBER 84.425D and 84.425U PASS-THROUGH NUMBER 4801 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001. Equipment and Real Property Management Criteria or specific requirement: Property records should be maintained for equipment acquired with federal awards as specified in OMB 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: A review of the equipment subsidiary ledger revealed that no equipment items purchased with Education Stabilization Funds in fiscal year 2023, were added to the ledger. The total cost of the equipment was $640,899. Also, the District could not account for 1 of 4 Education Stabilization Fund equipment items selected for sighting, costing $1,177. Cause: Lack of internal controls over the equipment subsidiary ledger. Effect or potential effect: The District's equipment subsidiary records did not include any equipment items purchased in fiscal year 2023. Context: All equipment items purchased in fiscal year 2023, were not added to the equipment subsidiary ledger for a total cost of $640,899. Also, 4 equipment items ($4,709) from a total of 40 equipment items ($47,094) that were included on the equipment subsidiary ledger were selected for observation. The sample was statistically valid. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. In addition, the District should maintain proper records for equipment acquired with federal awards. Views of responsible officials: The Superintendent will work with the business manager and the technology coordinator to identify all items purchased with a cost greater than $1,000 that need to be properly recorded in the district's equipment subsidiary ledger. Items that are being retired will be approved by the board and removed from the ledger. The modular buildings will be added immediately to the fixed asset list as well as the 10 Dell laptops. The laptop that the teacher lost will be removed from the fixed asset list and moving forward, all staff will complete an equipment incident form when equipment is lost or stolen. A police report will be filed for all stolen equipment.
FINDING #2023-003: EDUCATION STABILIZATION FUNDS (ESF) – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Name: Elementary and Secondary School Emergency Relief II (ESSER II) Fund Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education (ED) Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing a representative sample of ESF expenditures, we noted that the network switch purchases did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of network switches with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $208,801. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-003: EDUCATION STABILIZATION FUNDS (ESF) – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Name: Elementary and Secondary School Emergency Relief II (ESSER II) Fund Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education (ED) Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing a representative sample of ESF expenditures, we noted that the network switch purchases did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of network switches with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $208,801. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-003: EDUCATION STABILIZATION FUNDS (ESF) – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Name: Elementary and Secondary School Emergency Relief II (ESSER II) Fund Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education (ED) Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing a representative sample of ESF expenditures, we noted that the network switch purchases did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of network switches with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $208,801. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-003: EDUCATION STABILIZATION FUNDS (ESF) – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Name: Elementary and Secondary School Emergency Relief II (ESSER II) Fund Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education (ED) Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing a representative sample of ESF expenditures, we noted that the network switch purchases did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of network switches with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $208,801. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-003: EDUCATION STABILIZATION FUNDS (ESF) – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Name: Elementary and Secondary School Emergency Relief II (ESSER II) Fund Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education (ED) Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing a representative sample of ESF expenditures, we noted that the network switch purchases did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of network switches with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $208,801. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.
FINDING #2023-003: EDUCATION STABILIZATION FUNDS (ESF) – EQUIPMENT AND OTHER CAPITAL EXPENDITURES (50000) Program Name: Elementary and Secondary School Emergency Relief II (ESSER II) Fund Assistance Listing Number: 84.425 Pass-Through Agency: California Department of Education (CDE) Federal Agency: U.S. Department of Education (ED) Criteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity. Condition: Through testing a representative sample of ESF expenditures, we noted that the network switch purchases did not appear to be pre-approved by the California Department of Education (CDE). Each purchase order provided for the purchase and installation of network switches with a per unit cost in excess of $5,000 (including installation and other ancillary costs). Context: The condition was identified through the testing of ESF expenditures. Cause: District oversight. Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency. Questioned Costs: $208,801. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District obtain prior approval from CDE for all capital purchases from the Education Stabilization Fund in excess of $5,000. Views of Responsible Officials: See Corrective Action Plan on following page.