Compliance Requirement: Reporting Criteria: According to 2 CFR section 200.313(d)(1), detailed property records must be maintained for equipment acquired under a federal grant award. Records should include a description of the property, a serial number or identification number, the source of funding (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and ultimate disposition data. Condition: During our audit, we noted the District’s fixed asset records were incomplete for some of the assets acquired with federal grant funding during the fiscal year. Cause: The timing of fixed asset additions to the District’s fixed asset records did not align with the acquisition date. Effect: If the District’s fixed asset records are incomplete, they may not be properly safeguarded, and the District may not comply with the aforementioned federal regulations. Recommendation: We recommend that the District update their fixed asset records to include required information for assets purchased with federal awards and that a system of communication and a review process be implemented to ensure completeness and timing of fixed asset addition records. District’s Response: The District’s response is included in their corrective plan. FINDING # 2022-001: According to 2 CFR section 200.313(d)(1), detailed property records must be maintained for equipment acquired under a federal grant award. Records should include a description of the property, a serial number or identification number, the source of funding (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and ultimate disposition data. During our prior year audit, we noted the District’s fixed asset records were incomplete for some of the assets acquired with federal grant funding during the fiscal year. We recommended the District update their fixed asset records to include required information for assets purchased with federal awards and that a system of communication and a review process be implemented to ensure completeness and timing of fixed asset addition records. STATUS: Not implemented.
MUNICIPALITY OF PATILLAS, PUERTO RICO SCHEDULE OF FINDINGS AND QUESTIONED COSTS YEAR ENDED JUNE 30, 2023 SECTION III – Federal Award Finding and Questioned Costs FINDING 2023-004 FEDERAL PROGRAM HEAD START (ASSISTANCE LISTING NO. 93.600) DEPARTMENT OF HEALTH AND HUMAN SERVICES CATEGORY INTERNAL CONTROL/COMPLIANCE NONCOMPLIANCE EQUIPMENT AND REAL PROPERTY MANAGEMENT CONDITIONS The Municipality and the Head Start Program are not maintaining adequate internal controls over property and equipment items acquired with Federal Funds. In testing property and equipment, we noted the following: • The property records do not indicate, among other things the source of the property, who holds title, the acquisition date, cost of the property, percentage of Federal participation in the cost of the property, use and condition of the property, and any ultimate disposition data including the date of disposal. CRITERIA 2 CFR 200.313 (d) and the 45 CFR 75.320 (d) establishes that procedures for managing equipment 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 property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (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 shall be investigated. CAUSE The Head Start Program has inadequate internal control procedures that guarantee adequate records, registering and safeguarding of property and equipment. EFFECT Due to the lack of internal controls and property accounting records, we could not validate the accuracy and completeness of the annual physical inventory report and any other related report against an accounting general ledger accounts. The Municipality is exposed to the risk of possible unauthorized use and disposition of equipment due to the lack of internal controls and property records. RECOMMENDATION The Head Start Program must prepare a report including a full description of the assets, location, use, responsible person, cost, and any other pertinent data. In addition, the Program should establish a property control account and a subsidiary ledger to provide for the reconciliation of property. QUESTIONED COST: None PRIOR YEAR 2022-004
Significant Deficiency 2023-001. Equipment and Real Property Management United States Department of Education, Passed Through New York State Department of Education: Education Stabilization Fund (ESF) COVID-19: Governor’s Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased using federal grant funds with its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchases codes to the annual capital asset additions, the equipment purchased under the federal awards was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with federal awards in the capital asset inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses federal grant awards for the purchase of equipment. As a result of this, when the District Treasurer was compiling the listing of equipment purchased during the year to be provided to the District’s third-party capital asset management company, the equipment purchased using federal grant awards was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed between all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory records. This will ensure that all equipment purchased with federal awards is identified and included in the capital asset inventory records of the District by year end. Additionally, all capital assets additions purchased with federal awards should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with federal awards is identified, reconciled, and included in the District’s capital assets inventory records.
Significant Deficiency 2023-001. Equipment and Real Property Management United States Department of Education, Passed Through New York State Department of Education: Education Stabilization Fund (ESF) COVID-19: Governor’s Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased using federal grant funds with its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchases codes to the annual capital asset additions, the equipment purchased under the federal awards was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with federal awards in the capital asset inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses federal grant awards for the purchase of equipment. As a result of this, when the District Treasurer was compiling the listing of equipment purchased during the year to be provided to the District’s third-party capital asset management company, the equipment purchased using federal grant awards was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed between all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory records. This will ensure that all equipment purchased with federal awards is identified and included in the capital asset inventory records of the District by year end. Additionally, all capital assets additions purchased with federal awards should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with federal awards is identified, reconciled, and included in the District’s capital assets inventory records.
Significant Deficiency 2023-001. Equipment and Real Property Management United States Department of Education, Passed Through New York State Department of Education: Education Stabilization Fund (ESF) COVID-19: Governor’s Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased using federal grant funds with its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchases codes to the annual capital asset additions, the equipment purchased under the federal awards was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with federal awards in the capital asset inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses federal grant awards for the purchase of equipment. As a result of this, when the District Treasurer was compiling the listing of equipment purchased during the year to be provided to the District’s third-party capital asset management company, the equipment purchased using federal grant awards was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed between all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory records. This will ensure that all equipment purchased with federal awards is identified and included in the capital asset inventory records of the District by year end. Additionally, all capital assets additions purchased with federal awards should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with federal awards is identified, reconciled, and included in the District’s capital assets inventory records.
Significant Deficiency 2023-001. Equipment and Real Property Management United States Department of Education, Passed Through New York State Department of Education: Education Stabilization Fund (ESF) COVID-19: Governor’s Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased using federal grant funds with its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchases codes to the annual capital asset additions, the equipment purchased under the federal awards was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with federal awards in the capital asset inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses federal grant awards for the purchase of equipment. As a result of this, when the District Treasurer was compiling the listing of equipment purchased during the year to be provided to the District’s third-party capital asset management company, the equipment purchased using federal grant awards was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed between all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory records. This will ensure that all equipment purchased with federal awards is identified and included in the capital asset inventory records of the District by year end. Additionally, all capital assets additions purchased with federal awards should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with federal awards is identified, reconciled, and included in the District’s capital assets inventory records.
Significant Deficiency 2023-001. Equipment and Real Property Management United States Department of Education, Passed Through New York State Department of Education: Education Stabilization Fund (ESF) COVID-19: Governor’s Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased using federal grant funds with its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchases codes to the annual capital asset additions, the equipment purchased under the federal awards was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with federal awards in the capital asset inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses federal grant awards for the purchase of equipment. As a result of this, when the District Treasurer was compiling the listing of equipment purchased during the year to be provided to the District’s third-party capital asset management company, the equipment purchased using federal grant awards was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed between all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory records. This will ensure that all equipment purchased with federal awards is identified and included in the capital asset inventory records of the District by year end. Additionally, all capital assets additions purchased with federal awards should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with federal awards is identified, reconciled, and included in the District’s capital assets inventory records.
Significant Deficiency 2023-001. Equipment and Real Property Management United States Department of Education, Passed Through New York State Department of Education: Education Stabilization Fund (ESF) COVID-19: Governor’s Emergency Education Relief Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased using federal grant funds with its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchases codes to the annual capital asset additions, the equipment purchased under the federal awards was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with federal awards in the capital asset inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses federal grant awards for the purchase of equipment. As a result of this, when the District Treasurer was compiling the listing of equipment purchased during the year to be provided to the District’s third-party capital asset management company, the equipment purchased using federal grant awards was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed between all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory records. This will ensure that all equipment purchased with federal awards is identified and included in the capital asset inventory records of the District by year end. Additionally, all capital assets additions purchased with federal awards should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with federal awards is identified, reconciled, and included in the District’s capital assets inventory records.
U.S. Department of Education – Passed-through the NYS Education Department - Education Stabilization Fund COVID-19 – Elementary and Secondary School Emergency Relief (ESSER) Fund; ALN 84.425D; Project #5891-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 COVID-19 – American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP-ESSER) Fund; ALN 84.425U; Project #’s 5880-21-2955, 5884-21-2955, 5883-21-2955, 5882-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 Significant Deficiency Compliance Requirement: Equipment/Real Property Management Criteria: The District did not adhere to the capitalization threshold requirements outlined in the Uniform Guidance (2 CFR 200.1) for the capitalization of assets. In addition, 2 CFR section 200.313(d)(1), requires an entity to retain detailed records such as a description of the property/equipment, a serial number or identification number, the source of funding (including the federal award identification number), who holds title, acquisition date, cost of the property/equipment, percentage of federal participation in the project costs for the federal award under which the property/equipment was acquired, the location, use and condition of the property/equipment, and ultimate disposition data. A physical inventory of the property and equipment must be taken, and the results reconciled with the property records at least once every two years. Condition: The District applied an incorrect capitalization threshold over federal expenditures, resulting in the misclassification of assets. Cause: The District did not utilize the lower of the two capitalization thresholds noted in the Districts policies. Capitalizable equipment purchased with federal funds was not properly captured at year end. Effect: The District did not capitalize expenditures that exceeded the District’s stated capitalization threshold. As such, the District did not comply with Equipment and Real Property compliance requirements in accordance with Uniform Guidance. Questioned Costs: None. Recommendation: We recommend the District review and update its policies and procedures related to capitalization thresholds. This includes ensuring that the correct threshold is applied consistently across all asset categories. We also recommend the District update their fixed asset records to include required information for capital equipment purchased with federal awards. A system of communication and review process should be implemented to ensure completeness and compliance with Uniform Guidance equipment and real property requirements. District’s Response: The District’s response is included in their corrective plan.
U.S. Department of Education – Passed-through the NYS Education Department - Education Stabilization Fund COVID-19 – Elementary and Secondary School Emergency Relief (ESSER) Fund; ALN 84.425D; Project #5891-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 COVID-19 – American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP-ESSER) Fund; ALN 84.425U; Project #’s 5880-21-2955, 5884-21-2955, 5883-21-2955, 5882-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 Significant Deficiency Compliance Requirement: Equipment/Real Property Management Criteria: The District did not adhere to the capitalization threshold requirements outlined in the Uniform Guidance (2 CFR 200.1) for the capitalization of assets. In addition, 2 CFR section 200.313(d)(1), requires an entity to retain detailed records such as a description of the property/equipment, a serial number or identification number, the source of funding (including the federal award identification number), who holds title, acquisition date, cost of the property/equipment, percentage of federal participation in the project costs for the federal award under which the property/equipment was acquired, the location, use and condition of the property/equipment, and ultimate disposition data. A physical inventory of the property and equipment must be taken, and the results reconciled with the property records at least once every two years. Condition: The District applied an incorrect capitalization threshold over federal expenditures, resulting in the misclassification of assets. Cause: The District did not utilize the lower of the two capitalization thresholds noted in the Districts policies. Capitalizable equipment purchased with federal funds was not properly captured at year end. Effect: The District did not capitalize expenditures that exceeded the District’s stated capitalization threshold. As such, the District did not comply with Equipment and Real Property compliance requirements in accordance with Uniform Guidance. Questioned Costs: None. Recommendation: We recommend the District review and update its policies and procedures related to capitalization thresholds. This includes ensuring that the correct threshold is applied consistently across all asset categories. We also recommend the District update their fixed asset records to include required information for capital equipment purchased with federal awards. A system of communication and review process should be implemented to ensure completeness and compliance with Uniform Guidance equipment and real property requirements. District’s Response: The District’s response is included in their corrective plan.
U.S. Department of Education – Passed-through the NYS Education Department - Education Stabilization Fund COVID-19 – Elementary and Secondary School Emergency Relief (ESSER) Fund; ALN 84.425D; Project #5891-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 COVID-19 – American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP-ESSER) Fund; ALN 84.425U; Project #’s 5880-21-2955, 5884-21-2955, 5883-21-2955, 5882-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 Significant Deficiency Compliance Requirement: Equipment/Real Property Management Criteria: The District did not adhere to the capitalization threshold requirements outlined in the Uniform Guidance (2 CFR 200.1) for the capitalization of assets. In addition, 2 CFR section 200.313(d)(1), requires an entity to retain detailed records such as a description of the property/equipment, a serial number or identification number, the source of funding (including the federal award identification number), who holds title, acquisition date, cost of the property/equipment, percentage of federal participation in the project costs for the federal award under which the property/equipment was acquired, the location, use and condition of the property/equipment, and ultimate disposition data. A physical inventory of the property and equipment must be taken, and the results reconciled with the property records at least once every two years. Condition: The District applied an incorrect capitalization threshold over federal expenditures, resulting in the misclassification of assets. Cause: The District did not utilize the lower of the two capitalization thresholds noted in the Districts policies. Capitalizable equipment purchased with federal funds was not properly captured at year end. Effect: The District did not capitalize expenditures that exceeded the District’s stated capitalization threshold. As such, the District did not comply with Equipment and Real Property compliance requirements in accordance with Uniform Guidance. Questioned Costs: None. Recommendation: We recommend the District review and update its policies and procedures related to capitalization thresholds. This includes ensuring that the correct threshold is applied consistently across all asset categories. We also recommend the District update their fixed asset records to include required information for capital equipment purchased with federal awards. A system of communication and review process should be implemented to ensure completeness and compliance with Uniform Guidance equipment and real property requirements. District’s Response: The District’s response is included in their corrective plan.
U.S. Department of Education – Passed-through the NYS Education Department - Education Stabilization Fund COVID-19 – Elementary and Secondary School Emergency Relief (ESSER) Fund; ALN 84.425D; Project #5891-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 COVID-19 – American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP-ESSER) Fund; ALN 84.425U; Project #’s 5880-21-2955, 5884-21-2955, 5883-21-2955, 5882-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 Significant Deficiency Compliance Requirement: Equipment/Real Property Management Criteria: The District did not adhere to the capitalization threshold requirements outlined in the Uniform Guidance (2 CFR 200.1) for the capitalization of assets. In addition, 2 CFR section 200.313(d)(1), requires an entity to retain detailed records such as a description of the property/equipment, a serial number or identification number, the source of funding (including the federal award identification number), who holds title, acquisition date, cost of the property/equipment, percentage of federal participation in the project costs for the federal award under which the property/equipment was acquired, the location, use and condition of the property/equipment, and ultimate disposition data. A physical inventory of the property and equipment must be taken, and the results reconciled with the property records at least once every two years. Condition: The District applied an incorrect capitalization threshold over federal expenditures, resulting in the misclassification of assets. Cause: The District did not utilize the lower of the two capitalization thresholds noted in the Districts policies. Capitalizable equipment purchased with federal funds was not properly captured at year end. Effect: The District did not capitalize expenditures that exceeded the District’s stated capitalization threshold. As such, the District did not comply with Equipment and Real Property compliance requirements in accordance with Uniform Guidance. Questioned Costs: None. Recommendation: We recommend the District review and update its policies and procedures related to capitalization thresholds. This includes ensuring that the correct threshold is applied consistently across all asset categories. We also recommend the District update their fixed asset records to include required information for capital equipment purchased with federal awards. A system of communication and review process should be implemented to ensure completeness and compliance with Uniform Guidance equipment and real property requirements. District’s Response: The District’s response is included in their corrective plan.
U.S. Department of Education – Passed-through the NYS Education Department - Education Stabilization Fund COVID-19 – Elementary and Secondary School Emergency Relief (ESSER) Fund; ALN 84.425D; Project #5891-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 COVID-19 – American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP-ESSER) Fund; ALN 84.425U; Project #’s 5880-21-2955, 5884-21-2955, 5883-21-2955, 5882-21-2955; Grant Period – Fiscal Year Ended June 30, 2023 Significant Deficiency Compliance Requirement: Equipment/Real Property Management Criteria: The District did not adhere to the capitalization threshold requirements outlined in the Uniform Guidance (2 CFR 200.1) for the capitalization of assets. In addition, 2 CFR section 200.313(d)(1), requires an entity to retain detailed records such as a description of the property/equipment, a serial number or identification number, the source of funding (including the federal award identification number), who holds title, acquisition date, cost of the property/equipment, percentage of federal participation in the project costs for the federal award under which the property/equipment was acquired, the location, use and condition of the property/equipment, and ultimate disposition data. A physical inventory of the property and equipment must be taken, and the results reconciled with the property records at least once every two years. Condition: The District applied an incorrect capitalization threshold over federal expenditures, resulting in the misclassification of assets. Cause: The District did not utilize the lower of the two capitalization thresholds noted in the Districts policies. Capitalizable equipment purchased with federal funds was not properly captured at year end. Effect: The District did not capitalize expenditures that exceeded the District’s stated capitalization threshold. As such, the District did not comply with Equipment and Real Property compliance requirements in accordance with Uniform Guidance. Questioned Costs: None. Recommendation: We recommend the District review and update its policies and procedures related to capitalization thresholds. This includes ensuring that the correct threshold is applied consistently across all asset categories. We also recommend the District update their fixed asset records to include required information for capital equipment purchased with federal awards. A system of communication and review process should be implemented to ensure completeness and compliance with Uniform Guidance equipment and real property requirements. District’s Response: The District’s response is included in their corrective plan.
FINDING 2023-002 Information on the federal program: Subject: Head Start Cluster – Equipment Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Numbers and Years (or Other Identifying Numbers): 05CH011249, 05HP000285, 05HE000044 Compliance Requirement: Equipment Audit Finding: 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 Unit to ensure compliance with requirements related to the grant agreement and the equipment compliance requirements. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the equipment requirements. Effect: The failure to establish an effective internal control system placed the Unit 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: None. Context: For the eight buses sampled for equipment testing, the buses were not added to the capital assets listing. Additionally, no inventory was performed during the audit period. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior audit finding number was 2022-003. Recommendation: We recommend that the Unit add the bus purchases to their capital assets listing and perform an inventory at least every two years. 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: Head Start Cluster – Equipment Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Numbers and Years (or Other Identifying Numbers): 05CH011249, 05HP000285, 05HE000044 Compliance Requirement: Equipment Audit Finding: 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 Unit to ensure compliance with requirements related to the grant agreement and the equipment compliance requirements. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the equipment requirements. Effect: The failure to establish an effective internal control system placed the Unit 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: None. Context: For the eight buses sampled for equipment testing, the buses were not added to the capital assets listing. Additionally, no inventory was performed during the audit period. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior audit finding number was 2022-003. Recommendation: We recommend that the Unit add the bus purchases to their capital assets listing and perform an inventory at least every two years. 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: Head Start Cluster – Equipment Federal Agency: Department of Health and Human Services Federal Program: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Numbers and Years (or Other Identifying Numbers): 05CH011249, 05HP000285, 05HE000044 Compliance Requirement: Equipment Audit Finding: 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 Unit to ensure compliance with requirements related to the grant agreement and the equipment compliance requirements. Cause: The Unit's management had not developed a system of internal controls to ensure compliance with the equipment requirements. Effect: The failure to establish an effective internal control system placed the Unit 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: None. Context: For the eight buses sampled for equipment testing, the buses were not added to the capital assets listing. Additionally, no inventory was performed during the audit period. Identification as a repeat finding, if applicable: This is a repeat finding from the immediately prior audit. The prior audit finding number was 2022-003. Recommendation: We recommend that the Unit add the bus purchases to their capital assets listing and perform an inventory at least every two years. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2023-018: Equipment Records Federal Agency: Department of Education Federal Program Title: Education Stabilization Fund Assistance Listing Number: 84.425C Award Number and Year: GEER (November 8, 2021 – September 30, 2023) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Applicable Institution: Jackson State University (JSU) Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance – 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 CFR section 200.313(d)(1)). Condition: Property records did not contain accurate information related to certain equipment purchases. Questioned Costs: None Context: We noted the following discrepancies with the property records of the University: • For 2 out of 8 equipment assets selected for testing, the cost of the property per the invoice did not agree to the cost included on the property record. • For 1 out of 8 equipment assets selected for testing, the description of the property on the property record was inaccurate. • For 1 out of 8 equipment assets selected for testing, the serial number included on the property record did not match the serial number on the equipment. Cause: Personnel made inaccurate entries on the front end of receiving and tagging the equipment. Effect: The University is not in compliance with equipment requirements for its federal programs. As a result, equipment may not be properly accounted for and inventoried. Repeat Finding: No Recommendation: We recommend the institution strengthen its controls and processes related to capturing information relating to equipment purchases and ensure that property records properly reflect the required information. Views of Responsible Officials: There is no disagreement with the audit finding.
FINDING 2023-004 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 Numbers: S425C200018, 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. . . ." 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 one equipment selection, we noted the School Corporation did not add the capital asset 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 2023-004 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 Numbers: S425C200018, 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. . . ." 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 one equipment selection, we noted the School Corporation did not add the capital asset 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 2023-004 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 Numbers: S425C200018, 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. . . ." 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 one equipment selection, we noted the School Corporation did not add the capital asset 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 2023-004 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 Numbers: S425C200018, 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. . . ." 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 one equipment selection, we noted the School Corporation did not add the capital asset 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
Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2023 Assistance Listing #: 84.425U Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: The Board did not ensure that equipment purchased with funds from the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) was properly tracked through an inventory list. In addition, the Board was unable to provide evidence of prior written approval for a construction project. CONTEXT: Specifically, we identified the following: Equipment purchased through a lease purchase agreement dated May 15, 2020, totaling $2,147,541, was not placed on an equipment inventory listing maintained for each school. The final lease payment of $536,829 was made during fiscal year 2023. Additional equipment, totaling $38,475, was not placed on an equipment inventory listing maintained for each school. The Board was unable to provide documentation of prior written approval from the West Virginia Department of Education for a HVAC construction project, totaling $1,777,483. CRITERIA: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Appendix XI Part 4 Section 84.425-ESF Section 1 - Elementary and Secondary Education states, in part, that: "F. Equipment/Real Property Management Any purchases with ESF funds in this category are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, "Equipment /Real Property Management" of the 2023 Compliance Supplement. Auditors should determine whether governors, SEAs, and/or subrecipients received prior approval for capital expenditures for equipment acquisition or improvements to land, buildings, or equipment. (1) For capital equipment or improvements to land, buildings, or equipment that were purchased with grant funds, the governor or SEA must receive prior approval from ED. (2) For capital equipment or improvements to land, buildings, or equipment that were purchased with grant funds, the governor or SEA pass-through agency must provide prior approval to subrecipients." Title 2 U.S. Code of Federal Regulations (CFR) Part 200.439 Equipment and other capital expenditures, states, in part, that: "(b) (1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity. "(b) (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity. Title 2 U.S. Code of Federal Regulations (CFR) Part 200.313 Equipment states, in part, that: "... (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 (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 sales price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every 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." Title 7 CFR Section 3015.169 states, in part, that: "Recipient procedures for managing equipment shall, as a minimum, meet the following requirements (including replacement equipment) until such actions as transfer, replacement or disposal takes place: (a) Property records shall be maintained accurately. (Subpart D of this part contains retention and access requirements for these records.) The records shall include for each item of equipment the following: (1) A description of the equipment including manufacturer's serial numbers. (2) An identification number, such as the manufacturer's serial number. (3) Identification of the grant under which the recipient acquired the equipment. (4) The information needed to calculate the Federal share of the equipment (see § 3015.172). (5) Acquisition date and unit acquisition cost. (6) Location, use and condition of the equipment and the date the information was reported. (7) All pertinent information on the ultimate transfer, replacement, or disposal of the equipment. ... (b) Every two years, at a minimum, a physical inventory shall be conducted and the results reconciled with the property records to verify the existence, current utilization, and continued need for the equipment. Any discrepancies between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the differences." QUESTIONED COSTS: Unknown CAUSE: The Board did not have controls that would ensure inventory is properly tracked in accordance with all requirements of the ESSER program. Additionally, controls were not in place to track purchases of equipment. Also, the Board did not have controls in place to ensure that proper written approval was obtained in advance of starting a construction project. EFFECT: The Board did not properly track all equipment on an inventory list. Additionally, documentation was not available to verify compliance with requirements for approval of capital expenditures. This issue contributed to the disclaimer of opinion for the ESSER program. REPEAT FINDING: No RECOMMENDATION: The Upshur County Board of Education should establish and follow policies and procedures that will ensure compliance with requirements of the United States Department of Education's equipment management requirements and the requirements applicable to the ESSER program. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Board will establish procedures that will ensure compliance with requirements of the United States Department of Education's equipment management requirements applicable to the ESSER program.
FINDING 2023-007 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: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Funds (ESF) may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by the Department of Education (ED) or the pass-through entity. In addition, with prior approval by the ED or the pass-through entity, recipients and subrecipients may use the ESF funds to purchase real property and perform construction or minor remodeling, and for improvements to land, buildings, or equipment that meet the overall purpose of the ESF program, which is "to prevent, prepare for, and respond to" the COVID-19 pandemic. 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 servers and completed an HVAC project using Education Stabilization Funds; however, those items were not included on property records that included all the required information. The missing information included a description of the property, source of funding, percentage of federal participation in the project costs, location, and use and condition of the property. In addition, a physical inventory was not completed after the equipment was purchased, nor were any procedures in place to ensure the proper safeguarding and maintenance of the equipment purchased. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause A proper system of internal controls was not designed by management of the 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, property records were not maintained, physical inventories were not conducted, and safeguarding and maintenance of equipment purchased with the Education Stabilization Funds was not conducted. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds 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 necessary information and are added individually, inventories and safeguarding and maintenance of equipment purchased is conducted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-007 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: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Funds (ESF) may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by the Department of Education (ED) or the pass-through entity. In addition, with prior approval by the ED or the pass-through entity, recipients and subrecipients may use the ESF funds to purchase real property and perform construction or minor remodeling, and for improvements to land, buildings, or equipment that meet the overall purpose of the ESF program, which is "to prevent, prepare for, and respond to" the COVID-19 pandemic. 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 servers and completed an HVAC project using Education Stabilization Funds; however, those items were not included on property records that included all the required information. The missing information included a description of the property, source of funding, percentage of federal participation in the project costs, location, and use and condition of the property. In addition, a physical inventory was not completed after the equipment was purchased, nor were any procedures in place to ensure the proper safeguarding and maintenance of the equipment purchased. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause A proper system of internal controls was not designed by management of the 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, property records were not maintained, physical inventories were not conducted, and safeguarding and maintenance of equipment purchased with the Education Stabilization Funds was not conducted. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds 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 necessary information and are added individually, inventories and safeguarding and maintenance of equipment purchased is conducted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-007 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: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Funds (ESF) may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by the Department of Education (ED) or the pass-through entity. In addition, with prior approval by the ED or the pass-through entity, recipients and subrecipients may use the ESF funds to purchase real property and perform construction or minor remodeling, and for improvements to land, buildings, or equipment that meet the overall purpose of the ESF program, which is "to prevent, prepare for, and respond to" the COVID-19 pandemic. 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 servers and completed an HVAC project using Education Stabilization Funds; however, those items were not included on property records that included all the required information. The missing information included a description of the property, source of funding, percentage of federal participation in the project costs, location, and use and condition of the property. In addition, a physical inventory was not completed after the equipment was purchased, nor were any procedures in place to ensure the proper safeguarding and maintenance of the equipment purchased. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause A proper system of internal controls was not designed by management of the 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, property records were not maintained, physical inventories were not conducted, and safeguarding and maintenance of equipment purchased with the Education Stabilization Funds was not conducted. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds 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 necessary information and are added individually, inventories and safeguarding and maintenance of equipment purchased is conducted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-007 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: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Funds (ESF) may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by the Department of Education (ED) or the pass-through entity. In addition, with prior approval by the ED or the pass-through entity, recipients and subrecipients may use the ESF funds to purchase real property and perform construction or minor remodeling, and for improvements to land, buildings, or equipment that meet the overall purpose of the ESF program, which is "to prevent, prepare for, and respond to" the COVID-19 pandemic. 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 servers and completed an HVAC project using Education Stabilization Funds; however, those items were not included on property records that included all the required information. The missing information included a description of the property, source of funding, percentage of federal participation in the project costs, location, and use and condition of the property. In addition, a physical inventory was not completed after the equipment was purchased, nor were any procedures in place to ensure the proper safeguarding and maintenance of the equipment purchased. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause A proper system of internal controls was not designed by management of the 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, property records were not maintained, physical inventories were not conducted, and safeguarding and maintenance of equipment purchased with the Education Stabilization Funds was not conducted. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds 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 necessary information and are added individually, inventories and safeguarding and maintenance of equipment purchased is conducted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-007 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: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Funds (ESF) may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by the Department of Education (ED) or the pass-through entity. In addition, with prior approval by the ED or the pass-through entity, recipients and subrecipients may use the ESF funds to purchase real property and perform construction or minor remodeling, and for improvements to land, buildings, or equipment that meet the overall purpose of the ESF program, which is "to prevent, prepare for, and respond to" the COVID-19 pandemic. 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 servers and completed an HVAC project using Education Stabilization Funds; however, those items were not included on property records that included all the required information. The missing information included a description of the property, source of funding, percentage of federal participation in the project costs, location, and use and condition of the property. In addition, a physical inventory was not completed after the equipment was purchased, nor were any procedures in place to ensure the proper safeguarding and maintenance of the equipment purchased. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause A proper system of internal controls was not designed by management of the 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, property records were not maintained, physical inventories were not conducted, and safeguarding and maintenance of equipment purchased with the Education Stabilization Funds was not conducted. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds 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 necessary information and are added individually, inventories and safeguarding and maintenance of equipment purchased is conducted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-007 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: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context The COVID-19 - Education Stabilization Funds (ESF) may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by the Department of Education (ED) or the pass-through entity. In addition, with prior approval by the ED or the pass-through entity, recipients and subrecipients may use the ESF funds to purchase real property and perform construction or minor remodeling, and for improvements to land, buildings, or equipment that meet the overall purpose of the ESF program, which is "to prevent, prepare for, and respond to" the COVID-19 pandemic. 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 servers and completed an HVAC project using Education Stabilization Funds; however, those items were not included on property records that included all the required information. The missing information included a description of the property, source of funding, percentage of federal participation in the project costs, location, and use and condition of the property. In addition, a physical inventory was not completed after the equipment was purchased, nor were any procedures in place to ensure the proper safeguarding and maintenance of the equipment purchased. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313(d) states in part: ". . . (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. . . ." Cause A proper system of internal controls was not designed by management of the 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, property records were not maintained, physical inventories were not conducted, and safeguarding and maintenance of equipment purchased with the Education Stabilization Funds was not conducted. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds 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 necessary information and are added individually, inventories and safeguarding and maintenance of equipment purchased is conducted. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2023-001. Equipment and Real Property Management Education Stabilization Fund (ESF) COVID-19: Elementary and Secondary Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased with Federal grant funds in its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchase codes to the annual capital assets additions, the equipment purchased under the Federal grants was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with Federal awards in the capital assets inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses Federal grant funds for the purchase of equipment. As a result of this, when the District was compiling the listing of equipment purchased during the year, to be provided to the District’s third-party capital asset management company, the equipment purchased using Federal grant funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually for all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory. This will ensure that all equipment purchased with Federal funds is captured and included in the capital assets inventory records. Additionally, all capital assets additions purchased with Federal funds should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with Federal funds is identified and included in the District’s capital assets inventory records as part of the capital assets reconciliation process.
2023-001. Equipment and Real Property Management Education Stabilization Fund (ESF) COVID-19: Elementary and Secondary Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased with Federal grant funds in its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchase codes to the annual capital assets additions, the equipment purchased under the Federal grants was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with Federal awards in the capital assets inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses Federal grant funds for the purchase of equipment. As a result of this, when the District was compiling the listing of equipment purchased during the year, to be provided to the District’s third-party capital asset management company, the equipment purchased using Federal grant funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually for all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory. This will ensure that all equipment purchased with Federal funds is captured and included in the capital assets inventory records. Additionally, all capital assets additions purchased with Federal funds should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with Federal funds is identified and included in the District’s capital assets inventory records as part of the capital assets reconciliation process.
2023-001. Equipment and Real Property Management Education Stabilization Fund (ESF) COVID-19: Elementary and Secondary Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased with Federal grant funds in its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchase codes to the annual capital assets additions, the equipment purchased under the Federal grants was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with Federal awards in the capital assets inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses Federal grant funds for the purchase of equipment. As a result of this, when the District was compiling the listing of equipment purchased during the year, to be provided to the District’s third-party capital asset management company, the equipment purchased using Federal grant funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually for all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory. This will ensure that all equipment purchased with Federal funds is captured and included in the capital assets inventory records. Additionally, all capital assets additions purchased with Federal funds should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with Federal funds is identified and included in the District’s capital assets inventory records as part of the capital assets reconciliation process.
2023-001. Equipment and Real Property Management Education Stabilization Fund (ESF) COVID-19: Elementary and Secondary Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased with Federal grant funds in its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchase codes to the annual capital assets additions, the equipment purchased under the Federal grants was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with Federal awards in the capital assets inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses Federal grant funds for the purchase of equipment. As a result of this, when the District was compiling the listing of equipment purchased during the year, to be provided to the District’s third-party capital asset management company, the equipment purchased using Federal grant funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually for all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory. This will ensure that all equipment purchased with Federal funds is captured and included in the capital assets inventory records. Additionally, all capital assets additions purchased with Federal funds should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with Federal funds is identified and included in the District’s capital assets inventory records as part of the capital assets reconciliation process.
2023-001. Equipment and Real Property Management Education Stabilization Fund (ESF) COVID-19: Elementary and Secondary Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased with Federal grant funds in its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchase codes to the annual capital assets additions, the equipment purchased under the Federal grants was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with Federal awards in the capital assets inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses Federal grant funds for the purchase of equipment. As a result of this, when the District was compiling the listing of equipment purchased during the year, to be provided to the District’s third-party capital asset management company, the equipment purchased using Federal grant funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually for all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory. This will ensure that all equipment purchased with Federal funds is captured and included in the capital assets inventory records. Additionally, all capital assets additions purchased with Federal funds should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with Federal funds is identified and included in the District’s capital assets inventory records as part of the capital assets reconciliation process.
2023-001. Equipment and Real Property Management Education Stabilization Fund (ESF) COVID-19: Elementary and Secondary Emergency Relief Fund ALN: 84.425D COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief ALN: 84.425U COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief – Homeless Children and Youth ALN: 84.425W Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place. This includes maintaining property records that include a description of the property, a serial number or other identification number, the source of funding for the property, including the Federal Award Identification Number (FAIN), and who holds title. In addition, it requires the District to track 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. Condition: The District did not include equipment purchased with Federal grant funds in its current year additions in the District’s capital assets inventory records. Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchase codes to the annual capital assets additions, the equipment purchased under the Federal grants was inadvertently omitted from the current year capital assets inventory additions. Effect: The inability to include and differentiate capital assets acquired with Federal awards in the capital assets inventory records could lead to improper procedures for disposal of those capital assets. Questioned Costs: None reported. Context: The District rarely uses Federal grant funds for the purchase of equipment. As a result of this, when the District was compiling the listing of equipment purchased during the year, to be provided to the District’s third-party capital asset management company, the equipment purchased using Federal grant funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually for all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory. This will ensure that all equipment purchased with Federal funds is captured and included in the capital assets inventory records. Additionally, all capital assets additions purchased with Federal funds should be managed in accordance with 2 CFR §200.313. Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with Federal funds is identified and included in the District’s capital assets inventory records as part of the capital assets reconciliation process.
(2023-067) Title: Internal control over ESF subrecipient monitoring procedures needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Education State Bureau: Commissioner’s Office Federal Agency: U.S. Department of Education Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19) Assistance Listing Number: 84.425D, 84.425R, 84.425U Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.313; 2 CFR 200.332 The Department must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Department is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. For equipment acquired with Federal funding, records must be maintained that include: • a description and identification number; • the source of funding, including the Federal Award Identification Number; • who holds title and the acquisition date; • the cost of the property, including the percentage of Federal participation in the project costs for the Federal award under which the property was acquired; • the location, use and condition; 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 once every two years. 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. The Department must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: The Education Stabilization Fund (ESF) provides funding to school administrative units (SAUs) to purchase equipment for use in preventing, preparing for, or responding to the COVID-19 pandemic. SAUs were required to submit applications to the Office of Federal Emergency Relief Programs (OFERP) under the Department of Education outlining identified uses for ESF, including planned equipment purchases. Program coordinators within OFERP were responsible for reviewing and approving applications submitted by SAUs. Once there was an approved application on file, SAUs could submit reimbursement requests to the Department for equipment purchases identified and approved in the application. All SAU equipment purchases reimbursed with ESF are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Federal regulations for equipment and real property management. During fiscal year 2023, the Department did not have policies and procedures in place to track SAU equipment purchases reimbursed with ESF; therefore, the Department does not have assurance that: • a complete and accurate record of all equipment purchased with ESF funds was maintained by each SAU. • proper monitoring activities surrounding subrecipient compliance with Federal regulations for equipment and real property management were conducted. Context: In fiscal year 2023, ESF expenditures totaled $178.2 million, of which $167.8 million was paid to subrecipient SAUs. Cause: • Lack of policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients may not be in compliance with equipment and real property management requirements. • Assets purchased with ESF funds may not be properly safeguarded or maintained. Recommendation: We recommend that the Department implement policies and procedures to ensure that a complete and accurate record of all equipment purchased under ESF is maintained by the Department and by each SAU. This record should be utilized during subrecipient monitoring activities to verify subrecipient compliance with Federal regulations. Corrective Action Plan: See F-29 Management’s Response: The Department agrees with this finding. The Office of Federal Emergency Relief Programs has developed and will be implementing a procedure to maintain complete and accurate records of all equipment purchased with ESF by each SAU. Contact: Shelly Chasse-Johndro, Director of OFERP, DOE, 207-458-3180 (State Number: 23-1235-04)
(2023-067) Title: Internal control over ESF subrecipient monitoring procedures needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Education State Bureau: Commissioner’s Office Federal Agency: U.S. Department of Education Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19) Assistance Listing Number: 84.425D, 84.425R, 84.425U Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.313; 2 CFR 200.332 The Department must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Department is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. For equipment acquired with Federal funding, records must be maintained that include: • a description and identification number; • the source of funding, including the Federal Award Identification Number; • who holds title and the acquisition date; • the cost of the property, including the percentage of Federal participation in the project costs for the Federal award under which the property was acquired; • the location, use and condition; 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 once every two years. 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. The Department must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: The Education Stabilization Fund (ESF) provides funding to school administrative units (SAUs) to purchase equipment for use in preventing, preparing for, or responding to the COVID-19 pandemic. SAUs were required to submit applications to the Office of Federal Emergency Relief Programs (OFERP) under the Department of Education outlining identified uses for ESF, including planned equipment purchases. Program coordinators within OFERP were responsible for reviewing and approving applications submitted by SAUs. Once there was an approved application on file, SAUs could submit reimbursement requests to the Department for equipment purchases identified and approved in the application. All SAU equipment purchases reimbursed with ESF are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Federal regulations for equipment and real property management. During fiscal year 2023, the Department did not have policies and procedures in place to track SAU equipment purchases reimbursed with ESF; therefore, the Department does not have assurance that: • a complete and accurate record of all equipment purchased with ESF funds was maintained by each SAU. • proper monitoring activities surrounding subrecipient compliance with Federal regulations for equipment and real property management were conducted. Context: In fiscal year 2023, ESF expenditures totaled $178.2 million, of which $167.8 million was paid to subrecipient SAUs. Cause: • Lack of policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients may not be in compliance with equipment and real property management requirements. • Assets purchased with ESF funds may not be properly safeguarded or maintained. Recommendation: We recommend that the Department implement policies and procedures to ensure that a complete and accurate record of all equipment purchased under ESF is maintained by the Department and by each SAU. This record should be utilized during subrecipient monitoring activities to verify subrecipient compliance with Federal regulations. Corrective Action Plan: See F-29 Management’s Response: The Department agrees with this finding. The Office of Federal Emergency Relief Programs has developed and will be implementing a procedure to maintain complete and accurate records of all equipment purchased with ESF by each SAU. Contact: Shelly Chasse-Johndro, Director of OFERP, DOE, 207-458-3180 (State Number: 23-1235-04)
(2023-067) Title: Internal control over ESF subrecipient monitoring procedures needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Education State Bureau: Commissioner’s Office Federal Agency: U.S. Department of Education Assistance Listing Title: Education Stabilization Fund (ESF) (COVID-19) Assistance Listing Number: 84.425D, 84.425R, 84.425U Federal Award Identification Number: See E-93 to E-94 Compliance Area: Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.313; 2 CFR 200.332 The Department must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the Department is managing the award in compliance with Federal statutes, regulations, and the terms and conditions of the award. For equipment acquired with Federal funding, records must be maintained that include: • a description and identification number; • the source of funding, including the Federal Award Identification Number; • who holds title and the acquisition date; • the cost of the property, including the percentage of Federal participation in the project costs for the Federal award under which the property was acquired; • the location, use and condition; 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 once every two years. 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. The Department must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Condition: The Education Stabilization Fund (ESF) provides funding to school administrative units (SAUs) to purchase equipment for use in preventing, preparing for, or responding to the COVID-19 pandemic. SAUs were required to submit applications to the Office of Federal Emergency Relief Programs (OFERP) under the Department of Education outlining identified uses for ESF, including planned equipment purchases. Program coordinators within OFERP were responsible for reviewing and approving applications submitted by SAUs. Once there was an approved application on file, SAUs could submit reimbursement requests to the Department for equipment purchases identified and approved in the application. All SAU equipment purchases reimbursed with ESF are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Federal regulations for equipment and real property management. During fiscal year 2023, the Department did not have policies and procedures in place to track SAU equipment purchases reimbursed with ESF; therefore, the Department does not have assurance that: • a complete and accurate record of all equipment purchased with ESF funds was maintained by each SAU. • proper monitoring activities surrounding subrecipient compliance with Federal regulations for equipment and real property management were conducted. Context: In fiscal year 2023, ESF expenditures totaled $178.2 million, of which $167.8 million was paid to subrecipient SAUs. Cause: • Lack of policies and procedures • Lack of supervisory oversight Effect: • Noncompliance with Federal regulations • Subrecipients may not be in compliance with equipment and real property management requirements. • Assets purchased with ESF funds may not be properly safeguarded or maintained. Recommendation: We recommend that the Department implement policies and procedures to ensure that a complete and accurate record of all equipment purchased under ESF is maintained by the Department and by each SAU. This record should be utilized during subrecipient monitoring activities to verify subrecipient compliance with Federal regulations. Corrective Action Plan: See F-29 Management’s Response: The Department agrees with this finding. The Office of Federal Emergency Relief Programs has developed and will be implementing a procedure to maintain complete and accurate records of all equipment purchased with ESF by each SAU. Contact: Shelly Chasse-Johndro, Director of OFERP, DOE, 207-458-3180 (State Number: 23-1235-04)
FINDING 2023-009 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: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion 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 related to the Equipment and Real Property Management compliance requirement. The School Corporation made one equipment purchase, a school bus in the amount of $204,961, with grant funds. The school bus was acquired in June 2021, late in the prior audit period, and the expenditure was reimbursed under the ESSER II award in July 2021 in the current audit period. The School Corporation did not maintain a capital asset ledger during the audit period, so the equipment purchased was not properly added to an asset ledger or property record. In addition, while the bus was maintained and safeguarded from theft there was no identified internal controls that would prevent, or detect and correct, noncompliance with these requirements if they were to occur. The School Corporation did not perform a physical inventory of equipment at least once every two years as required. The lack of internal controls and noncompliance were systemic issues throughout the audit period. INDIANA STATE BOARD OF ACCOUNTS 30 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.313 (d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. 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, a capital asset ledger was not maintained and the required inventory was not completed. 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. INDIANA STATE BOARD OF ACCOUNTS 31 CROTHERSVILLE COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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 are maintained and that a physical inventory is taken every two years. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.
Findings and Questioned Costs Relating to Federal Awards: Finding No. 2023-001 - Equipment and Real Property Management: Federal Program: Research and Development Cluster Name of Federal Agency: U.S. Department of Health and Human Services Category: Other matters Compliance requirement: F. Equipment and Real Property Management Criteria: 2 CFR section 200.313(d), Equipment Management Requirements, states that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition: As a result of our audit procedures, we noted that the last physical inventory of property was taken on July 13, 2021, accordingly, the Foundation should have performed a physical inventory on or before July 13, 2023. Cause: The property inventory was scheduled for the fiscal year ended June 30, 2023, however, due to medical complications of the employee in-charge of fixed assets, the inventory was postponed. Effect: Conducting physical inventory ensures compliance with regulations and helps maintain accountability for the use of federal expenditures, prevents fraud and abuse, and helps identify surplus or underutilized equipment, leading to more efficient allocation of resources. Questioned Cost: None. Context: Since the last property inventory was taken on July 13, 2021, the next property inventory should have been performed on or before July 13, 2023. Identification of a repeat finding: This is not a repeat finding from the immediate previous audit. Recommendation: The Foundation should continue monitoring and reviewing guidelines for federal awards under the Research and Development Cluster to ensure it is current on the applicable requirements and changes therein. Also, there should be reminders set to the corresponding personnel to perform the property inventories, at least, every two years.