Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.
Finding 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During the testing of equipment acquisitions, it was noted the School Corporation is maintaining and updating property records, however, had not performed a physical inventory of capital assets during the period under audit. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management perform a physical inventory of capital assets at least once every two years to comply with federal and state regulations and document the inventory process as evidence the physical inventory was performed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During the testing of equipment acquisitions, it was noted the School Corporation is maintaining and updating property records, however, had not performed a physical inventory of capital assets during the period under audit. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management perform a physical inventory of capital assets at least once every two years to comply with federal and state regulations and document the inventory process as evidence the physical inventory was performed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During the testing of equipment acquisitions, it was noted the School Corporation is maintaining and updating property records, however, had not performed a physical inventory of capital assets during the period under audit. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management perform a physical inventory of capital assets at least once every two years to comply with federal and state regulations and document the inventory process as evidence the physical inventory was performed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: During the testing of equipment acquisitions, it was noted the School Corporation is maintaining and updating property records, however, had not performed a physical inventory of capital assets during the period under audit. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management perform a physical inventory of capital assets at least once every two years to comply with federal and state regulations and document the inventory process as evidence the physical inventory was performed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425U Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Significant Deficiency Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For 1 of the 2 equipment purchases sampled, the School Corporation did not add the equipment purchase to the capital asset listing. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Equipment and Real Property Management compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-006 Information on the federal program: Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Significant Deficiency Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: FINDING 2023-006 (Continued) (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. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For 1 of the 3 equipment purchases sampled, the School Corporation did not add the equipment purchase to the capital asset listing. Additionally, we noted no inventory was performed during the audit period. The finding is isolated to the ESSER II (84.425D) and ESSER III (84.425U) grants. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Equipment and Real Property Management compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-006 Information on the federal program: Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Significant Deficiency Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: FINDING 2023-006 (Continued) (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. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: For 1 of the 3 equipment purchases sampled, the School Corporation did not add the equipment purchase to the capital asset listing. Additionally, we noted no inventory was performed during the audit period. The finding is isolated to the ESSER II (84.425D) and ESSER III (84.425U) grants. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Equipment and Real Property Management compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-002 Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Award Numbers and Years (Or Other Identifying Numbers): S425D200013, S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Finding: Material Weakness Criteria: 2 CFR section 200.313 states in part: (a) Title. Subject to the requirements and conditions set forth in this section, title to equipment acquired under a Federal award will vest upon acquisition in the non-Federal entity. Unless a statute specifically authorizes the Federal agency to vest title in the non-Federal entity without further responsibility to the Federal Government, and the Federal agency elects to do so, the title must be a conditional title. Title must vest in the non-Federal entity subject to the following conditions: (1) Use the equipment for the authorized purposes of the project during the period of performance, or until the property is no longer needed for the purposes of the project. (2) Not encumber the property without approval of the Federal awarding agency or pass-through entity. (3) Use and dispose of the property in accordance with paragraphs (b), (c), and (e) of this section. (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (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. FINDING 2023-002 (Continued) Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: $5,163 (known questioned costs). Context: There were three equipment purchases made during the audit period and charged to the ESF grants which totaled $28,289 in the aggregate. During testing of equipment purchases, the following items were noted: For one of three equipment purchases selected for testing, we noted an equipment purchase for computer hardware totaling $9,711 was not properly added to the School Corporation’s capital asset ledger at June 30, 2023. The equipment purchase was charged to the ESSER III grant award (84.425U). For one of three equipment purchases selected for testing, we noted the equipment purchase was not pre-approved by the Indiana Department of Education (IDOE) within the approved grant application. The equipment purchase was for a middle school gym LED scoreboard in the amount of $5,163 and was recorded under the general supplies - instruction expenditure account for the ESSER II grant award (84.425D). Purchases for equipment exceeding $5,000 require preapproved by the Indiana Department of Education (IDOE). Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of controls to ensure all equipment expenditures under federal grants obtain proper pre-approval (as applicable) and are properly included on the School Corporation’s capital asset ledger. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-002 Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Award Numbers and Years (Or Other Identifying Numbers): S425D200013, S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Finding: Material Weakness Criteria: 2 CFR section 200.313 states in part: (a) Title. Subject to the requirements and conditions set forth in this section, title to equipment acquired under a Federal award will vest upon acquisition in the non-Federal entity. Unless a statute specifically authorizes the Federal agency to vest title in the non-Federal entity without further responsibility to the Federal Government, and the Federal agency elects to do so, the title must be a conditional title. Title must vest in the non-Federal entity subject to the following conditions: (1) Use the equipment for the authorized purposes of the project during the period of performance, or until the property is no longer needed for the purposes of the project. (2) Not encumber the property without approval of the Federal awarding agency or pass-through entity. (3) Use and dispose of the property in accordance with paragraphs (b), (c), and (e) of this section. (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (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. FINDING 2023-002 (Continued) Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: $5,163 (known questioned costs). Context: There were three equipment purchases made during the audit period and charged to the ESF grants which totaled $28,289 in the aggregate. During testing of equipment purchases, the following items were noted: For one of three equipment purchases selected for testing, we noted an equipment purchase for computer hardware totaling $9,711 was not properly added to the School Corporation’s capital asset ledger at June 30, 2023. The equipment purchase was charged to the ESSER III grant award (84.425U). For one of three equipment purchases selected for testing, we noted the equipment purchase was not pre-approved by the Indiana Department of Education (IDOE) within the approved grant application. The equipment purchase was for a middle school gym LED scoreboard in the amount of $5,163 and was recorded under the general supplies - instruction expenditure account for the ESSER II grant award (84.425D). Purchases for equipment exceeding $5,000 require preapproved by the Indiana Department of Education (IDOE). Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of controls to ensure all equipment expenditures under federal grants obtain proper pre-approval (as applicable) and are properly included on the School Corporation’s capital asset ledger. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-002 Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Award Numbers and Years (Or Other Identifying Numbers): S425D200013, S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Finding: Material Weakness Criteria: 2 CFR section 200.313 states in part: (a) Title. Subject to the requirements and conditions set forth in this section, title to equipment acquired under a Federal award will vest upon acquisition in the non-Federal entity. Unless a statute specifically authorizes the Federal agency to vest title in the non-Federal entity without further responsibility to the Federal Government, and the Federal agency elects to do so, the title must be a conditional title. Title must vest in the non-Federal entity subject to the following conditions: (1) Use the equipment for the authorized purposes of the project during the period of performance, or until the property is no longer needed for the purposes of the project. (2) Not encumber the property without approval of the Federal awarding agency or pass-through entity. (3) Use and dispose of the property in accordance with paragraphs (b), (c), and (e) of this section. (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (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. FINDING 2023-002 (Continued) Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: $5,163 (known questioned costs). Context: There were three equipment purchases made during the audit period and charged to the ESF grants which totaled $28,289 in the aggregate. During testing of equipment purchases, the following items were noted: For one of three equipment purchases selected for testing, we noted an equipment purchase for computer hardware totaling $9,711 was not properly added to the School Corporation’s capital asset ledger at June 30, 2023. The equipment purchase was charged to the ESSER III grant award (84.425U). For one of three equipment purchases selected for testing, we noted the equipment purchase was not pre-approved by the Indiana Department of Education (IDOE) within the approved grant application. The equipment purchase was for a middle school gym LED scoreboard in the amount of $5,163 and was recorded under the general supplies - instruction expenditure account for the ESSER II grant award (84.425D). Purchases for equipment exceeding $5,000 require preapproved by the Indiana Department of Education (IDOE). Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of controls to ensure all equipment expenditures under federal grants obtain proper pre-approval (as applicable) and are properly included on the School Corporation’s capital asset ledger. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-002 Information on the federal program: Subject: Education Stabilization Fund (ESSER) – Internal Controls Federal Agency: Department of Education Federal Program: COVID-19 – Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U, 84.425W Federal Award Numbers and Years (Or Other Identifying Numbers): S425D200013, S425U210013, S425W210015 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Finding: Material Weakness Criteria: 2 CFR section 200.313 states in part: (a) Title. Subject to the requirements and conditions set forth in this section, title to equipment acquired under a Federal award will vest upon acquisition in the non-Federal entity. Unless a statute specifically authorizes the Federal agency to vest title in the non-Federal entity without further responsibility to the Federal Government, and the Federal agency elects to do so, the title must be a conditional title. Title must vest in the non-Federal entity subject to the following conditions: (1) Use the equipment for the authorized purposes of the project during the period of performance, or until the property is no longer needed for the purposes of the project. (2) Not encumber the property without approval of the Federal awarding agency or pass-through entity. (3) Use and dispose of the property in accordance with paragraphs (b), (c), and (e) of this section. (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (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. FINDING 2023-002 (Continued) Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs: $5,163 (known questioned costs). Context: There were three equipment purchases made during the audit period and charged to the ESF grants which totaled $28,289 in the aggregate. During testing of equipment purchases, the following items were noted: For one of three equipment purchases selected for testing, we noted an equipment purchase for computer hardware totaling $9,711 was not properly added to the School Corporation’s capital asset ledger at June 30, 2023. The equipment purchase was charged to the ESSER III grant award (84.425U). For one of three equipment purchases selected for testing, we noted the equipment purchase was not pre-approved by the Indiana Department of Education (IDOE) within the approved grant application. The equipment purchase was for a middle school gym LED scoreboard in the amount of $5,163 and was recorded under the general supplies - instruction expenditure account for the ESSER II grant award (84.425D). Purchases for equipment exceeding $5,000 require preapproved by the Indiana Department of Education (IDOE). Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation's management establish a system of controls to ensure all equipment expenditures under federal grants obtain proper pre-approval (as applicable) and are properly included on the School Corporation’s capital asset ledger. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. A property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. The School Corporation purchased two assets, totaling $21,670, which exceeded the School Corporation's capitalization threshold. Both assets were selected for testing. Neither asset was properly added to the capital asset listing. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 19 LAKELAND SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, assets purchased with federal award dollars were not properly added to the asset listing. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 20 LAKELAND SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records are maintained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. A property record or capital asset listing which would include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. The School Corporation purchased two assets, totaling $21,670, which exceeded the School Corporation's capitalization threshold. Both assets were selected for testing. Neither asset was properly added to the capital asset listing. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 19 LAKELAND SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, assets purchased with federal award dollars were not properly added to the asset listing. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 20 LAKELAND SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records are maintained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indianna Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation hired a consultant to compile and provide to them a fixed asset report that was to contain all inventory and assets purchased that exceeded the School Corporation's capitalization threshold through June 30, 2023. The consultant prepared the report; however, the School Corporation did not have any policies or procedures in place to ensure the listing was complete, nor was there any documentation that differences between the compiled asset report and the School Corporation's equipment records were reviewed and resolved. A property record or capital asset listing would include the following for each asset: a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property, is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. During the audit period, the School Corporation purchased three assets with ESSER funds. Two of the three assets, totaling $68,459, were not included on the asset listing prepared by the consultant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 20 NETTLE CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "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, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." 2 CFR 200.313(d)(2) states: "A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, assets purchased with federal dollars, ESSER funds, were not properly added to the School Corporation's asset listing. In addition, assets on the listing did not denote whether federal funds were used to acquire the asset, nor were any discrepancies in the records reconciled. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information, new assets are properly added, and any discrepancies are reconciled. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 21
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indianna Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation hired a consultant to compile and provide to them a fixed asset report that was to contain all inventory and assets purchased that exceeded the School Corporation's capitalization threshold through June 30, 2023. The consultant prepared the report; however, the School Corporation did not have any policies or procedures in place to ensure the listing was complete, nor was there any documentation that differences between the compiled asset report and the School Corporation's equipment records were reviewed and resolved. A property record or capital asset listing would include the following for each asset: a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property, is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. During the audit period, the School Corporation purchased three assets with ESSER funds. Two of the three assets, totaling $68,459, were not included on the asset listing prepared by the consultant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 20 NETTLE CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "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, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." 2 CFR 200.313(d)(2) states: "A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, assets purchased with federal dollars, ESSER funds, were not properly added to the School Corporation's asset listing. In addition, assets on the listing did not denote whether federal funds were used to acquire the asset, nor were any discrepancies in the records reconciled. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information, new assets are properly added, and any discrepancies are reconciled. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 21
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indianna Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation hired a consultant to compile and provide to them a fixed asset report that was to contain all inventory and assets purchased that exceeded the School Corporation's capitalization threshold through June 30, 2023. The consultant prepared the report; however, the School Corporation did not have any policies or procedures in place to ensure the listing was complete, nor was there any documentation that differences between the compiled asset report and the School Corporation's equipment records were reviewed and resolved. A property record or capital asset listing would include the following for each asset: a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property, is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. During the audit period, the School Corporation purchased three assets with ESSER funds. Two of the three assets, totaling $68,459, were not included on the asset listing prepared by the consultant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 20 NETTLE CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "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, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." 2 CFR 200.313(d)(2) states: "A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, assets purchased with federal dollars, ESSER funds, were not properly added to the School Corporation's asset listing. In addition, assets on the listing did not denote whether federal funds were used to acquire the asset, nor were any discrepancies in the records reconciled. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information, new assets are properly added, and any discrepancies are reconciled. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 21
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indianna Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation hired a consultant to compile and provide to them a fixed asset report that was to contain all inventory and assets purchased that exceeded the School Corporation's capitalization threshold through June 30, 2023. The consultant prepared the report; however, the School Corporation did not have any policies or procedures in place to ensure the listing was complete, nor was there any documentation that differences between the compiled asset report and the School Corporation's equipment records were reviewed and resolved. A property record or capital asset listing would include the following for each asset: a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property, is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. During the audit period, the School Corporation purchased three assets with ESSER funds. Two of the three assets, totaling $68,459, were not included on the asset listing prepared by the consultant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 20 NETTLE CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "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, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." 2 CFR 200.313(d)(2) states: "A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, assets purchased with federal dollars, ESSER funds, were not properly added to the School Corporation's asset listing. In addition, assets on the listing did not denote whether federal funds were used to acquire the asset, nor were any discrepancies in the records reconciled. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information, new assets are properly added, and any discrepancies are reconciled. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 21
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indianna Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation hired a consultant to compile and provide to them a fixed asset report that was to contain all inventory and assets purchased that exceeded the School Corporation's capitalization threshold through June 30, 2023. The consultant prepared the report; however, the School Corporation did not have any policies or procedures in place to ensure the listing was complete, nor was there any documentation that differences between the compiled asset report and the School Corporation's equipment records were reviewed and resolved. A property record or capital asset listing would include the following for each asset: a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property, is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. During the audit period, the School Corporation purchased three assets with ESSER funds. Two of the three assets, totaling $68,459, were not included on the asset listing prepared by the consultant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 20 NETTLE CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "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, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." 2 CFR 200.313(d)(2) states: "A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, assets purchased with federal dollars, ESSER funds, were not properly added to the School Corporation's asset listing. In addition, assets on the listing did not denote whether federal funds were used to acquire the asset, nor were any discrepancies in the records reconciled. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information, new assets are properly added, and any discrepancies are reconciled. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 21
FINDING 2023-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013 Pass-Through Entity: Indianna Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation hired a consultant to compile and provide to them a fixed asset report that was to contain all inventory and assets purchased that exceeded the School Corporation's capitalization threshold through June 30, 2023. The consultant prepared the report; however, the School Corporation did not have any policies or procedures in place to ensure the listing was complete, nor was there any documentation that differences between the compiled asset report and the School Corporation's equipment records were reviewed and resolved. A property record or capital asset listing would include the following for each asset: a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number (FAIN)), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, and use and condition of the property, is to be maintained for assets purchased that exceed the School Corporation's capitalization threshold. During the audit period, the School Corporation purchased three assets with ESSER funds. Two of the three assets, totaling $68,459, were not included on the asset listing prepared by the consultant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: INDIANA STATE BOARD OF ACCOUNTS 20 NETTLE CREEK SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d)(1) states: "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, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." 2 CFR 200.313(d)(2) states: "A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, assets purchased with federal dollars, ESSER funds, were not properly added to the School Corporation's asset listing. In addition, assets on the listing did not denote whether federal funds were used to acquire the asset, nor were any discrepancies in the records reconciled. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure asset records include all the necessary information, new assets are properly added, and any discrepancies are reconciled. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. INDIANA STATE BOARD OF ACCOUNTS 21
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION – PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – EDUCATION STABILIZATION FUND – FEDERAL ALN 84.425 2023-005 Internal Control Over Compliance and Material Noncompliance With Equipment and Real Property Management Requirements Criteria – 2 CFR § 200.313 requires the District to designate fixed assets purchased under federal programs and to maintain related property records, including a description of the property, a serial number or other unique identification number, the source of funding for the property (including the federal Assistance Listing Number (ALN)), 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 sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least every two years. Condition – During our audit, we noted that the District did not have sufficient controls in place within the COVID-19 – Education Stabilization Fund federal program to specifically identify federally funded fixed assets and maintain the required records as noted above to assure compliance with federal equipment and real property management requirements. The District does not have a process or procedure in place for a physical inventory of property acquired with federal funds. Two fixed assets purchased with federal awards in the current year were not maintained in accordance with federal equipment and real property management requirements. Questioned Costs – None. Context – A population of two applicable fixed assets purchased with federal awards were noted during the course of our audit. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – The District did not have a system in place for specifically identifying federally funded fixed assets and maintaining the required records as noted above. Effect – This could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management for the COVID-19 Education Stabilization Fund federal program. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District intends to review its control procedures relating to equipment and real property management requirements to ensure compliance for future federal awards expenditures. The District has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION – PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – EDUCATION STABILIZATION FUND – FEDERAL ALN 84.425 2023-005 Internal Control Over Compliance and Material Noncompliance With Equipment and Real Property Management Requirements Criteria – 2 CFR § 200.313 requires the District to designate fixed assets purchased under federal programs and to maintain related property records, including a description of the property, a serial number or other unique identification number, the source of funding for the property (including the federal Assistance Listing Number (ALN)), 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 sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least every two years. Condition – During our audit, we noted that the District did not have sufficient controls in place within the COVID-19 – Education Stabilization Fund federal program to specifically identify federally funded fixed assets and maintain the required records as noted above to assure compliance with federal equipment and real property management requirements. The District does not have a process or procedure in place for a physical inventory of property acquired with federal funds. Two fixed assets purchased with federal awards in the current year were not maintained in accordance with federal equipment and real property management requirements. Questioned Costs – None. Context – A population of two applicable fixed assets purchased with federal awards were noted during the course of our audit. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – The District did not have a system in place for specifically identifying federally funded fixed assets and maintaining the required records as noted above. Effect – This could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management for the COVID-19 Education Stabilization Fund federal program. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District intends to review its control procedures relating to equipment and real property management requirements to ensure compliance for future federal awards expenditures. The District has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE – U.S. DEPARTMENT OF EDUCATION – PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 – EDUCATION STABILIZATION FUND – FEDERAL ALN 84.425 2023-005 Internal Control Over Compliance and Material Noncompliance With Equipment and Real Property Management Requirements Criteria – 2 CFR § 200.313 requires the District to designate fixed assets purchased under federal programs and to maintain related property records, including a description of the property, a serial number or other unique identification number, the source of funding for the property (including the federal Assistance Listing Number (ALN)), 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 sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least every two years. Condition – During our audit, we noted that the District did not have sufficient controls in place within the COVID-19 – Education Stabilization Fund federal program to specifically identify federally funded fixed assets and maintain the required records as noted above to assure compliance with federal equipment and real property management requirements. The District does not have a process or procedure in place for a physical inventory of property acquired with federal funds. Two fixed assets purchased with federal awards in the current year were not maintained in accordance with federal equipment and real property management requirements. Questioned Costs – None. Context – A population of two applicable fixed assets purchased with federal awards were noted during the course of our audit. This was not a statistically valid sample. Repeat Finding – This is a current year finding. Cause – The District did not have a system in place for specifically identifying federally funded fixed assets and maintaining the required records as noted above. Effect – This could be viewed as a violation of the award agreement. Recommendation – We recommend that the District review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management for the COVID-19 Education Stabilization Fund federal program. View of Responsible Official and Planned Corrective Actions – The District agrees with the finding. The District intends to review its control procedures relating to equipment and real property management requirements to ensure compliance for future federal awards expenditures. The District has separately issued a Corrective Action Plan related to this finding.
Finding 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Internal Controls over Equipment Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." FINDING 2023-005 (Continued) Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation expended $2,354,885 during the audit period on equipment acquisitions for a new HVAC system and chiller at the North White Middle-High School building. Equipment acquisitions were charged to the ESSER II (84.425D) and ESSER III (84.425U) grant awards. During the testing of equipment acquisitions, it was noted the School Corporation had not update the capital asset ledger as of June 30, 2023 for equipment acquisitions made during the period under audit. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management implement a system of controls to ensure the capital asset ledger is updated timely for capital asset acquisitions and dispositions on at least an annual basis. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-005 Information on the federal program: Subject: Education Stabilization Fund – Internal Controls over Equipment Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." FINDING 2023-005 (Continued) Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: The School Corporation expended $2,354,885 during the audit period on equipment acquisitions for a new HVAC system and chiller at the North White Middle-High School building. Equipment acquisitions were charged to the ESSER II (84.425D) and ESSER III (84.425U) grant awards. During the testing of equipment acquisitions, it was noted the School Corporation had not update the capital asset ledger as of June 30, 2023 for equipment acquisitions made during the period under audit. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management implement a system of controls to ensure the capital asset ledger is updated timely for capital asset acquisitions and dispositions on at least an annual basis. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2023-001 Information on the federal program: Subject: Education Stabilization Fund – Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Number and Year: S425C200018, S425D200013, S425D210013, S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness Criteria: 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management Requirements compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: There were no questioned costs identified. Context: In our testing of two equipment selections, we noted the School Corporation did not add either of the selections to the capital asset listing. Identification as a repeat finding: No. Recommendation: We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and Equipment and Real Property Management compliance requirements Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.