Finding 2022 002: Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Director of National Intelligence (USDNI) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of Transportation (USDOT) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) U.S. Environmental Protection Agency (USEPA) U.S. Department of Energy (USDOE) U.S. Department of Education (USDE) Smithsonian Institution U.S. Department of Health and Human Services (USDHHS) Corporation for National and Community Service All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($482,298,931) Federal Award Numbers: Various ? See schedule of award numbers Federal Award Year: Various ? See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Condition Found: The University did not consistently follow its property management policies and procedures related to equipment purchased with federal funding from the Research and Development (R&D) Cluster program. The University conducts research at multiple locations throughout their campus, where equipment purchased with federal funds is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number that funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. During our physical observation of 60 pieces of equipment purchased with R&D Cluster funds (with a total cost value of $1,542,384), we noted the following: - Nine items (with a total cost value of $200,035) did not have property management tags affixed at the time of our observation. - Eight items (with a total cost value of $103,583) had property management tags with asset numbers that were inconsistent with the equipment listing. Upon further review, we noted the property management records contained a temporary asset tag number that had not been updated for the permanent tag subsequently affixed by department personnel. Further, we noted adequate management review controls had not been established to ensure property management records were accurately updated and equipment was properly tagged. The net book value of equipment related to the R&D Cluster program totaled $217,101,257 at June 30, 2022. Criteria: According to 2 CFR 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause: In discussing these conditions with University officials, they stated the University?s procedures for tagging equipment were delayed because the University?s personnel operated in a remote environment during fiscal years 2021 and 2022. Additionally, physical inventory procedures, which are designed detect differences between perpetual and actual information, were waived during fiscal years 2020 and 2021 as a result of the pandemic. Possible Asserted Effect: Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. We also recommend the University properly tag equipment in accordance with its policy. Views of University Officials: The University agrees with the finding. All departments of the University will be reminded that tagging is an integral part of the internal control process for capital assets and training will be made available before June 30, 2023.
Finding 2022 002: Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Director of National Intelligence (USDNI) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of Transportation (USDOT) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) U.S. Environmental Protection Agency (USEPA) U.S. Department of Energy (USDOE) U.S. Department of Education (USDE) Smithsonian Institution U.S. Department of Health and Human Services (USDHHS) Corporation for National and Community Service All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($482,298,931) Federal Award Numbers: Various ? See schedule of award numbers Federal Award Year: Various ? See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Condition Found: The University did not consistently follow its property management policies and procedures related to equipment purchased with federal funding from the Research and Development (R&D) Cluster program. The University conducts research at multiple locations throughout their campus, where equipment purchased with federal funds is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number that funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. During our physical observation of 60 pieces of equipment purchased with R&D Cluster funds (with a total cost value of $1,542,384), we noted the following: - Nine items (with a total cost value of $200,035) did not have property management tags affixed at the time of our observation. - Eight items (with a total cost value of $103,583) had property management tags with asset numbers that were inconsistent with the equipment listing. Upon further review, we noted the property management records contained a temporary asset tag number that had not been updated for the permanent tag subsequently affixed by department personnel. Further, we noted adequate management review controls had not been established to ensure property management records were accurately updated and equipment was properly tagged. The net book value of equipment related to the R&D Cluster program totaled $217,101,257 at June 30, 2022. Criteria: According to 2 CFR 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause: In discussing these conditions with University officials, they stated the University?s procedures for tagging equipment were delayed because the University?s personnel operated in a remote environment during fiscal years 2021 and 2022. Additionally, physical inventory procedures, which are designed detect differences between perpetual and actual information, were waived during fiscal years 2020 and 2021 as a result of the pandemic. Possible Asserted Effect: Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. We also recommend the University properly tag equipment in accordance with its policy. Views of University Officials: The University agrees with the finding. All departments of the University will be reminded that tagging is an integral part of the internal control process for capital assets and training will be made available before June 30, 2023.
Finding 2022 002: Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Director of National Intelligence (USDNI) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of Transportation (USDOT) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) U.S. Environmental Protection Agency (USEPA) U.S. Department of Energy (USDOE) U.S. Department of Education (USDE) Smithsonian Institution U.S. Department of Health and Human Services (USDHHS) Corporation for National and Community Service All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($482,298,931) Federal Award Numbers: Various ? See schedule of award numbers Federal Award Year: Various ? See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Condition Found: The University did not consistently follow its property management policies and procedures related to equipment purchased with federal funding from the Research and Development (R&D) Cluster program. The University conducts research at multiple locations throughout their campus, where equipment purchased with federal funds is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number that funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. During our physical observation of 60 pieces of equipment purchased with R&D Cluster funds (with a total cost value of $1,542,384), we noted the following: - Nine items (with a total cost value of $200,035) did not have property management tags affixed at the time of our observation. - Eight items (with a total cost value of $103,583) had property management tags with asset numbers that were inconsistent with the equipment listing. Upon further review, we noted the property management records contained a temporary asset tag number that had not been updated for the permanent tag subsequently affixed by department personnel. Further, we noted adequate management review controls had not been established to ensure property management records were accurately updated and equipment was properly tagged. The net book value of equipment related to the R&D Cluster program totaled $217,101,257 at June 30, 2022. Criteria: According to 2 CFR 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause: In discussing these conditions with University officials, they stated the University?s procedures for tagging equipment were delayed because the University?s personnel operated in a remote environment during fiscal years 2021 and 2022. Additionally, physical inventory procedures, which are designed detect differences between perpetual and actual information, were waived during fiscal years 2020 and 2021 as a result of the pandemic. Possible Asserted Effect: Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. We also recommend the University properly tag equipment in accordance with its policy. Views of University Officials: The University agrees with the finding. All departments of the University will be reminded that tagging is an integral part of the internal control process for capital assets and training will be made available before June 30, 2023.
Finding 2022 002: Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Director of National Intelligence (USDNI) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of Transportation (USDOT) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) U.S. Environmental Protection Agency (USEPA) U.S. Department of Energy (USDOE) U.S. Department of Education (USDE) Smithsonian Institution U.S. Department of Health and Human Services (USDHHS) Corporation for National and Community Service All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($482,298,931) Federal Award Numbers: Various ? See schedule of award numbers Federal Award Year: Various ? See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Condition Found: The University did not consistently follow its property management policies and procedures related to equipment purchased with federal funding from the Research and Development (R&D) Cluster program. The University conducts research at multiple locations throughout their campus, where equipment purchased with federal funds is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number that funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. During our physical observation of 60 pieces of equipment purchased with R&D Cluster funds (with a total cost value of $1,542,384), we noted the following: - Nine items (with a total cost value of $200,035) did not have property management tags affixed at the time of our observation. - Eight items (with a total cost value of $103,583) had property management tags with asset numbers that were inconsistent with the equipment listing. Upon further review, we noted the property management records contained a temporary asset tag number that had not been updated for the permanent tag subsequently affixed by department personnel. Further, we noted adequate management review controls had not been established to ensure property management records were accurately updated and equipment was properly tagged. The net book value of equipment related to the R&D Cluster program totaled $217,101,257 at June 30, 2022. Criteria: According to 2 CFR 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause: In discussing these conditions with University officials, they stated the University?s procedures for tagging equipment were delayed because the University?s personnel operated in a remote environment during fiscal years 2021 and 2022. Additionally, physical inventory procedures, which are designed detect differences between perpetual and actual information, were waived during fiscal years 2020 and 2021 as a result of the pandemic. Possible Asserted Effect: Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. We also recommend the University properly tag equipment in accordance with its policy. Views of University Officials: The University agrees with the finding. All departments of the University will be reminded that tagging is an integral part of the internal control process for capital assets and training will be made available before June 30, 2023.
FINDING 2022-001 Subject: COVID-19 - Education Stabilization Fund - Equipment Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425U Federal Award Number and Year (or Other Identifying Number): S425U200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 15 SPENCER-OWEN COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An internal control system was not designed or implemented at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation used American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER) funds to purchase Board room furniture. The School Corporation appropriately added the equipment to the property records; however, the property record failed to include a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, and percentage of federal participation in the project costs for the federal award under which the property was acquired. 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: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause Management had not designed or implemented a system of internal controls that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. INDIANA STATE BOARD OF ACCOUNTS 16 SPENCER-OWEN COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls related to the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2022-003. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: Governor?s Emergency Education relief (GEER) Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D COVID-19: American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Fund 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 in its current year additions in the District?s capital assets inventory. 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 grant was inadvertently omitted from the current year capital assets inventory additions. Effect: This could result in the improper tracking, use, or disposal for capital assets purchased with federal funds. 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 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 funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually between 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 asset inventory report of the district at year-end. 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 captured, reconciled, and included in the District?s capital assets inventory records.
2022-003. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: Governor?s Emergency Education relief (GEER) Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D COVID-19: American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Fund 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 in its current year additions in the District?s capital assets inventory. 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 grant was inadvertently omitted from the current year capital assets inventory additions. Effect: This could result in the improper tracking, use, or disposal for capital assets purchased with federal funds. 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 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 funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually between 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 asset inventory report of the district at year-end. 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 captured, reconciled, and included in the District?s capital assets inventory records.
2022-003. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: Governor?s Emergency Education relief (GEER) Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D COVID-19: American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Fund 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 in its current year additions in the District?s capital assets inventory. 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 grant was inadvertently omitted from the current year capital assets inventory additions. Effect: This could result in the improper tracking, use, or disposal for capital assets purchased with federal funds. 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 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 funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually between 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 asset inventory report of the district at year-end. 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 captured, reconciled, and included in the District?s capital assets inventory records.
2022-003. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: Governor?s Emergency Education relief (GEER) Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D COVID-19: American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Fund 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 in its current year additions in the District?s capital assets inventory. 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 grant was inadvertently omitted from the current year capital assets inventory additions. Effect: This could result in the improper tracking, use, or disposal for capital assets purchased with federal funds. 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 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 funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually between 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 asset inventory report of the district at year-end. 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 captured, reconciled, and included in the District?s capital assets inventory records.
2022-003. Equipment and Real Property Management United States Department of Education, passed through New York State Department of Education Education Stabilization Fund COVID-19: Governor?s Emergency Education relief (GEER) Fund ALN: 84.425C COVID-19: Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D COVID-19: American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Fund 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 in its current year additions in the District?s capital assets inventory. 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 grant was inadvertently omitted from the current year capital assets inventory additions. Effect: This could result in the improper tracking, use, or disposal for capital assets purchased with federal funds. 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 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 funds was inadvertently omitted from the listing. Recommendation: The District should implement procedures where there is a formal reconciliation performed annually between 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 asset inventory report of the district at year-end. 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 captured, reconciled, and included in the District?s capital assets inventory records.
FINDING 2022-004 FEDERAL PROGRAM HEAD START (CFDA NO. 93.600) DEPARTMENT OF HEALTH AND HUMAN SERVICES CATEGORY INTERNAL CONTROL/COMPLIANCE NONCOMPLIANCE EQUIPMENT AND REAL PROPERTY MANAGEMENT TOPIC SENTENCE Lack of controls over property and equipment acquired with Federal Funds. 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
Finding 2022-011 ? Material Weakness: Equipment and Real Property Management ? Compliance and Control Finding ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.313{c}, requires grantees have the following in place for equipment purchased with grant funds with a useful life of more than one year and a per-unit acquisition costs which equals or exceeds the lesser of the capitalization policy of the grantee or $5,000: ? Equipment be used in the program for which it was acquired; ? Property records must be maintained that include a description of the property, a serial number or other identification numbers, the source of the funding for the property, who holds title, the acquisition date, cost of the property, percentage of federal participation in the projects cots, the location, use and condition of the property, and any ultimate disposition data for 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 safeguards to prevent loss, damage or theft of the property; ? Adequate maintenance procedures must be developed to keep the property in good condition. In addition, the Uniform Guidance requires that controls over compliance be properly designed, in place and operating effectively to ensure compliance with these requirements. Condition: The University did not adhere to the requirements of the Uniform Guidance as noted through procedures performed over equipment and real property management and does not have a process in place to ensure federally funded equipment is inventoried. Cause: Management charged with oversight over the federal grant could not support their compliance with these equipment and real property management requirements under the Uniform Guidance. Additionally, controls over compliance were not designed effectively to ensure compliance with such grant requirements. Effect: Instances of noncompliance were not detected by management. Questioned Costs: Not applicable. Context: Based on a sample selection of equipment from the capital asset listing, the location for equipment purchased in previous grant years is not property tracked by management. An inventory of all equipment purchased with grant funds has not been adequately completed within the last two years. Identification As A Repeat Finding: 2021-017 Recommendation: We recommend that management document its equipment and real property management policies for purchases under federal grants and hold training specific to these documented policies for those responsible for grant compliance. We also recommend that management conduct a physical inventory for all equipment purchased with grant funding. Views Of Responsible Officials: The University has scheduled an inventory check for early April 2023. For the first year after the initial inventory check, inventory checks will be completed semi-annually to ensure compliance. The University is seeking an asset management system to house all asset information and checks.
Finding 2022-011 ? Material Weakness: Equipment and Real Property Management ? Compliance and Control Finding ALN 84.031 ? Title III ? Higher Education ? Institutional Aid Federal Agency: U.S. Department of Education Pass-Through Entity: None Criteria Or Specific Requirement: 2 CFR section 200.313{c}, requires grantees have the following in place for equipment purchased with grant funds with a useful life of more than one year and a per-unit acquisition costs which equals or exceeds the lesser of the capitalization policy of the grantee or $5,000: ? Equipment be used in the program for which it was acquired; ? Property records must be maintained that include a description of the property, a serial number or other identification numbers, the source of the funding for the property, who holds title, the acquisition date, cost of the property, percentage of federal participation in the projects cots, the location, use and condition of the property, and any ultimate disposition data for 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 safeguards to prevent loss, damage or theft of the property; ? Adequate maintenance procedures must be developed to keep the property in good condition. In addition, the Uniform Guidance requires that controls over compliance be properly designed, in place and operating effectively to ensure compliance with these requirements. Condition: The University did not adhere to the requirements of the Uniform Guidance as noted through procedures performed over equipment and real property management and does not have a process in place to ensure federally funded equipment is inventoried. Cause: Management charged with oversight over the federal grant could not support their compliance with these equipment and real property management requirements under the Uniform Guidance. Additionally, controls over compliance were not designed effectively to ensure compliance with such grant requirements. Effect: Instances of noncompliance were not detected by management. Questioned Costs: Not applicable. Context: Based on a sample selection of equipment from the capital asset listing, the location for equipment purchased in previous grant years is not property tracked by management. An inventory of all equipment purchased with grant funds has not been adequately completed within the last two years. Identification As A Repeat Finding: 2021-017 Recommendation: We recommend that management document its equipment and real property management policies for purchases under federal grants and hold training specific to these documented policies for those responsible for grant compliance. We also recommend that management conduct a physical inventory for all equipment purchased with grant funding. Views Of Responsible Officials: The University has scheduled an inventory check for early April 2023. For the first year after the initial inventory check, inventory checks will be completed semi-annually to ensure compliance. The University is seeking an asset management system to house all asset information and checks.
2022-004 Equipment & Property Management ? ESSER Significant Deficiency in Internal Control over Compliance Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2022-104207-DPI-ESSERFIII-165 Award Period: March 13, 2020 ? September 30, 2024 Compliance Requirement: Equipment & Property Management Condition: The District uses the Skyward capital asset module to track all asset purchases; however, there is no review of this data entry by anyone other than the preparer. Criteria: 2 CFR Sections 200.313(c) through (e) requires property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number, who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use, and condition of the property, and any ultimate disposition date of disposal and sales price of the property. Cause: The process is manual to enter capital assets into the Skyward Fixed Assets software. There is no review of this data entry by anyone other than the individual entering the information into the software. Effect: The District could incorrectly track an asset purchased with federal funds and could potentially be subject to paying the funds back for the asset. Recommendation: We recommend the District should consider having another individual, besides the one performing the data entry, perform a review after the data is entered into the software. View of Responsible Officials: Refer to the management?s response per the corrective action plan.
2022-004 Equipment & Property Management ? ESSER Significant Deficiency in Internal Control over Compliance Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2022-104207-DPI-ESSERFIII-165 Award Period: March 13, 2020 ? September 30, 2024 Compliance Requirement: Equipment & Property Management Condition: The District uses the Skyward capital asset module to track all asset purchases; however, there is no review of this data entry by anyone other than the preparer. Criteria: 2 CFR Sections 200.313(c) through (e) requires property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number, who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use, and condition of the property, and any ultimate disposition date of disposal and sales price of the property. Cause: The process is manual to enter capital assets into the Skyward Fixed Assets software. There is no review of this data entry by anyone other than the individual entering the information into the software. Effect: The District could incorrectly track an asset purchased with federal funds and could potentially be subject to paying the funds back for the asset. Recommendation: We recommend the District should consider having another individual, besides the one performing the data entry, perform a review after the data is entered into the software. View of Responsible Officials: Refer to the management?s response per the corrective action plan.
2022-004 Equipment & Property Management ? ESSER Significant Deficiency in Internal Control over Compliance Federal Agency: U.S. Department of Education Federal Program Title: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Wisconsin Department of Public Instruction Pass-Through Numbers: 2022-104207-DPI-ESSERFIII-165 Award Period: March 13, 2020 ? September 30, 2024 Compliance Requirement: Equipment & Property Management Condition: The District uses the Skyward capital asset module to track all asset purchases; however, there is no review of this data entry by anyone other than the preparer. Criteria: 2 CFR Sections 200.313(c) through (e) requires property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number, who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use, and condition of the property, and any ultimate disposition date of disposal and sales price of the property. Cause: The process is manual to enter capital assets into the Skyward Fixed Assets software. There is no review of this data entry by anyone other than the individual entering the information into the software. Effect: The District could incorrectly track an asset purchased with federal funds and could potentially be subject to paying the funds back for the asset. Recommendation: We recommend the District should consider having another individual, besides the one performing the data entry, perform a review after the data is entered into the software. View of Responsible Officials: Refer to the management?s response per the corrective action plan.
FINDING 2022-001 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 (or Other Identifying Number): 84.425 Federal Award Number: S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Significant Deficiency, Other Matters INDIANA STATE BOARD OF ACCOUNTS 15 NORTH GIBSON SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. 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. Three of the fourteen assets purchased during the audit period from the ESSER II award were not included in the School Corporation's capital asset listing. In addition, the acquisition date and cost of the property for the eleven assets included in the capital asset listing did not agree to the supporting documentation for the purchases. For all assets, the capital asset listing did not identify which assets were purchased with federal dollars. 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)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." Cause Management had not developed a system of internal control that would have ensured compliance with the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE NONCOMPLIANCE ? U.S. DEPARTMENT OF EDUCATION ? PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 ? EDUCATION STABILIZATION FUND, FEDERAL ALN 84.425 2022-001 Internal Control Over Compliance With Equipment and Real Property Management and Reportable Noncompliance Criteria ? 2 CFR ? 200.313 (c)(1) and (d)(1) requires that Higher Ground Academy (the Academy) obtain approval from the federal funding agency or pass-through agency prior to the purchase of equipment with federal funding. The Academy must also maintain property records adequate to identify and track equipment purchased with federal funding, including the federal award under which the equipment was purchased. Condition ? During our audit, we noted the Academy did not have sufficient controls in place within the Education Stabilization Fund federal program to assure compliance with federal equipment and real property management requirements, resulting in reportable noncompliance. Questioned Costs ? None. Context ? The Academy did not obtain approval from the federal funding awarding agency or pass-through agency prior to purchasing equipment with a total value of $56,205 using federal funds. The Academy?s property records also did not contain all information required by the Uniform Guidance to adequately identify and track this equipment. Repeat Finding ? This is a current year finding. Cause ? This condition was due to a misunderstanding of the individual item value, at which federally funded equipment purchases were required to be preapproved and tracked. Effect ? Noncompliance with the equipment and real property management could be viewed as a violation of the award agreement and result in loss of funds. Recommendation ? We recommend that the Academy review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management for the Education Stabilization Fund federal program. View of Responsible Official and Planned Corrective Actions ? The Academy agrees with the finding. The Academy intends to revise its internal capitalization threshold to align with the federal threshold, and to review its other control procedures relating to equipment and real property management requirements to ensure compliance for future federal awards expenditures. The Academy has separately issued a Corrective Action Plan related to this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE NONCOMPLIANCE ? U.S. DEPARTMENT OF EDUCATION ? PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 ? EDUCATION STABILIZATION FUND, FEDERAL ALN 84.425 2022-001 Internal Control Over Compliance With Equipment and Real Property Management and Reportable Noncompliance Criteria ? 2 CFR ? 200.313 (c)(1) and (d)(1) requires that Higher Ground Academy (the Academy) obtain approval from the federal funding agency or pass-through agency prior to the purchase of equipment with federal funding. The Academy must also maintain property records adequate to identify and track equipment purchased with federal funding, including the federal award under which the equipment was purchased. Condition ? During our audit, we noted the Academy did not have sufficient controls in place within the Education Stabilization Fund federal program to assure compliance with federal equipment and real property management requirements, resulting in reportable noncompliance. Questioned Costs ? None. Context ? The Academy did not obtain approval from the federal funding awarding agency or pass-through agency prior to purchasing equipment with a total value of $56,205 using federal funds. The Academy?s property records also did not contain all information required by the Uniform Guidance to adequately identify and track this equipment. Repeat Finding ? This is a current year finding. Cause ? This condition was due to a misunderstanding of the individual item value, at which federally funded equipment purchases were required to be preapproved and tracked. Effect ? Noncompliance with the equipment and real property management could be viewed as a violation of the award agreement and result in loss of funds. Recommendation ? We recommend that the Academy review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management for the Education Stabilization Fund federal program. View of Responsible Official and Planned Corrective Actions ? The Academy agrees with the finding. The Academy intends to revise its internal capitalization threshold to align with the federal threshold, and to review its other control procedures relating to equipment and real property management requirements to ensure compliance for future federal awards expenditures. The Academy has separately issued a Corrective Action Plan related to this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE AND REPORTABLE NONCOMPLIANCE ? U.S. DEPARTMENT OF EDUCATION ? PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 ? EDUCATION STABILIZATION FUND, FEDERAL ALN 84.425 2022-001 Internal Control Over Compliance With Equipment and Real Property Management and Reportable Noncompliance Criteria ? 2 CFR ? 200.313 (c)(1) and (d)(1) requires that Higher Ground Academy (the Academy) obtain approval from the federal funding agency or pass-through agency prior to the purchase of equipment with federal funding. The Academy must also maintain property records adequate to identify and track equipment purchased with federal funding, including the federal award under which the equipment was purchased. Condition ? During our audit, we noted the Academy did not have sufficient controls in place within the Education Stabilization Fund federal program to assure compliance with federal equipment and real property management requirements, resulting in reportable noncompliance. Questioned Costs ? None. Context ? The Academy did not obtain approval from the federal funding awarding agency or pass-through agency prior to purchasing equipment with a total value of $56,205 using federal funds. The Academy?s property records also did not contain all information required by the Uniform Guidance to adequately identify and track this equipment. Repeat Finding ? This is a current year finding. Cause ? This condition was due to a misunderstanding of the individual item value, at which federally funded equipment purchases were required to be preapproved and tracked. Effect ? Noncompliance with the equipment and real property management could be viewed as a violation of the award agreement and result in loss of funds. Recommendation ? We recommend that the Academy review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management for the Education Stabilization Fund federal program. View of Responsible Official and Planned Corrective Actions ? The Academy agrees with the finding. The Academy intends to revise its internal capitalization threshold to align with the federal threshold, and to review its other control procedures relating to equipment and real property management requirements to ensure compliance for future federal awards expenditures. The Academy has separately issued a Corrective Action Plan related to this finding.
Criteria Requirements per section 2 CFR Section 200.313(d)(2) of the Uniform Guidance state that a physical inventory of any property purchased with Federal Funds must be taken and the results reconciled with the property records at least every two years. Statement of condition During our audit we noted the Charter Schools did not adhere to the terms of their financial policies and procedures manual and federal statutes, regulations, and terms and conditions of the awards received as they did not perform an inventory count every two years for assets purchased with Federal funds. Cause Management?s internal control procedures did not identify the need for a property inventory count on a bi-annual basis. The procedure was included in the Charter Schools internal financial policies and procedures manual as required but the actual count did not occur. Effect or Potential Effect Without a regular inventory count, property and equipment could be lost or stolen and would not be identified in a timely manner. Questioned Costs N/A Recommendation We recommend the Charter Schools adhere to the terms of their financial policies and procedures manual to perform inventory audits over assets purchased with Federal funds. Views of Responsible Officials We agree with the finding and will perform a physical count of inventory for all property purchased with federal funds as required going forward. Auditor?s Evaluation of the Views of Responsible Officials Management?s response is appropriate to address the finding. If properly implemented, management?s response would include procedures to prevent reoccurrence in the future.
Criteria Requirements per section 2 CFR Section 200.313(d)(2) of the Uniform Guidance state that a physical inventory of any property purchased with Federal Funds must be taken and the results reconciled with the property records at least every two years. Statement of condition During our audit we noted the Charter Schools did not adhere to the terms of their financial policies and procedures manual and federal statutes, regulations, and terms and conditions of the awards received as they did not perform an inventory count every two years for assets purchased with Federal funds. Cause Management?s internal control procedures did not identify the need for a property inventory count on a bi-annual basis. The procedure was included in the Charter Schools internal financial policies and procedures manual as required but the actual count did not occur. Effect or Potential Effect Without a regular inventory count, property and equipment could be lost or stolen and would not be identified in a timely manner. Questioned Costs N/A Recommendation We recommend the Charter Schools adhere to the terms of their financial policies and procedures manual to perform inventory audits over assets purchased with Federal funds. Views of Responsible Officials We agree with the finding and will perform a physical count of inventory for all property purchased with federal funds as required going forward. Auditor?s Evaluation of the Views of Responsible Officials Management?s response is appropriate to address the finding. If properly implemented, management?s response would include procedures to prevent reoccurrence in the future.
FINDING 2022-001 Subject: COVID-19 - Education Stabilization Fund - Equipment 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): 7000-S425D200013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation purchased $438,016 of equipment with COVID-19 - Education Stabilization Fund funds. The equipment was not added to the property record 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), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property. The 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)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, 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." Cause Management had not established a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Coronavirus Relief Funds ALN 21.019 2022-007 EQUIPMENT AND REAL PROPERTY MANAGEMENT Statement of Condition: The Municipality has not complied with the property management requirements. There were no physical inventories performed during the fiscal year ended June 30, 2022. During the fiscal year ended June 30, 2022, Coronavirus Relief Fund acquired equipment amounting to $399,890. NONE The Municipality of Las Piedras does not have a subsidiary ledger of equipment acquired with federal funds, however, such subsidiary ledger shall comply with federal requirements because it should: (1) have information needed to calculate the federal share of the cost of the equipment, (2) identify the grant under which the program acquired the equipment, (3) have information about the location, use and condition of the equipment and the date the information was obtained, and (4) have all pertinent information on the ultimate transfer, replacement, or disposal of the equipment. Furthermore, there is no evidence that the total amount of capital expenditures and the composition of capital assets incurred with federal funds have been reconciled with the general ledger or other control account to enhance the controls to prevent unauthorized disposition of assets. Criteria: CFR 200 ?200.313 established that the Municipality should take the physical inventory and reconcile the results with the property records. In addition, Section (d) (3) establishes that a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Federal regulations also require that, every two years, at a minimum, a physical inventory shall be conducted and the results shall be reconciled with property records to verify the existence, current utilization, and continued need for the equipment. Any discrepancies between quantities determined by the physical inspection with those shown in the accounting records shall be investigated to determine the causes of the differences. Property records shall be accurate. Property records shall include the following for each item: ? A description of the equipment including manufacturer?s serial numbers. ? Identification number, as the manufacturer?s serial numbers. ? Identification of the grant under which the recipient acquired the equipment. ? The information needed to calculate the federal share of the cost of the equipment. ? Acquisition date and unit acquisition cost. ? Location, use and condition of the equipment and the date the information was obtained. ? All pertinent information on the ultimate transfer, replacement or disposal of the equipment. Cause and Effect: These instances of non-compliance occurred because the Property Division of the Municipality has not enforced the requirement to perform a capital assets inventory and to ensure the proper accountability of capital assets during the fiscal year ended June 30, 2022. Accordingly, the Municipality?s internal controls in place over capital assets are not designed to effectively account for capital assets, since it do not allow for the reconciliation of detailed property records with the general ledger. These inadequate property internal controls may expose the Municipality to questioned or disallowed costs by the federal government for lost or stolen property. This condition represents a material weakness in the Municipality?s internal controls over financial reporting. Furthermore, this situation represents a significant risk of loss of capital assets because there is a lack of accountability for acquired capital assets. Any federally funded capital assets lost would need to be repaid to the federal government with municipal funds. Recommendation: A physical inventory of the Federal Programs capital assets should be taken as soon as possible. Physical inventory amounts should be reconciled with the property recorded on the subsidiary ledgers. This information should be reconciled with the monthly disbursements made against the budgetary accounts used for property acquisitions. Dispositions must also be made only upon approval of the Municipal Property Administrator and the Finance Director.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER: 2022- 003 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: COVID 19: Education Stabilization Fund (2021 & 2022) 4. Project No.: 4998-E2, E3 5. CFDA No.: 84.425D-COVID 19, 84.425U-COVID 19 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Equipment and Real Property Management compliance requirements require that property records be maintained that include a description of the property, a serial number or other identification number, the source of funding of the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property and any ultimate disposition data including the date of disposal and the sales price of the property. (2 CFR section 200.313(d)(1)) 9. Condition The District did not maintain property records for equipment purchased with Education Stabilization Funding. 10. Questioned Costs None 11. Context The inventory of equipment is material to the program. 12. Effect The District is not in compliance with Equipment and Real Property Management compliance requirements. 13. Cause The District has rarely paid for projects with federal funds in the past and was unaware of the requirement. 14. Recommendation The District should assign an employee to prepare the District's property records in accordance with the requirements of 2 CFR section 200.313(d)(1). 15. Management's response Management will implement the auditor's recommendation in the year ended June 30, 2023.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER: 2022- 004 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: COVID 19: Education Stabilization Fund (2021 & 2022) 4. Project No.: 4998-E2, E3 5. CFDA No.: 84.425D-COVID 19, 84.425U-COVID 19 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Strong internal controls over equipment and real property management compliance requirements require District personnel to have knowledge of all of the equipment and real property management compliance requirements. 9. Condition District personnel were unaware of the requirement to maintain property records for equipment purchased with Education Stabilization Funding. 10. Questioned Costs None 11. Context This condition existed for all equipment purchased with Education Stabilization Funding. 12. Effect The District did not maintain property records for equipment purchased in accordance with 2 CFR section 200.313(d)(1). 13. Cause The District has rarely paid for projects with federal funds in the past and was unaware of the requirement. 14. Recommendation Annually, District personnel should read the 2 CFR Part 200, Appendix XI, Compliance Supplement for all federal programs received by the District to ensure they are aware of all applicable compliance requirements. 15. Management's response Management will implement the auditor's recommendation in the year ended June 30, 2023.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER: 2022- 003 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: COVID 19: Education Stabilization Fund (2021 & 2022) 4. Project No.: 4998-E2, E3 5. CFDA No.: 84.425D-COVID 19, 84.425U-COVID 19 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Equipment and Real Property Management compliance requirements require that property records be maintained that include a description of the property, a serial number or other identification number, the source of funding of the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property and any ultimate disposition data including the date of disposal and the sales price of the property. (2 CFR section 200.313(d)(1)) 9. Condition The District did not maintain property records for equipment purchased with Education Stabilization Funding. 10. Questioned Costs None 11. Context The inventory of equipment is material to the program. 12. Effect The District is not in compliance with Equipment and Real Property Management compliance requirements. 13. Cause The District has rarely paid for projects with federal funds in the past and was unaware of the requirement. 14. Recommendation The District should assign an employee to prepare the District's property records in accordance with the requirements of 2 CFR section 200.313(d)(1). 15. Management's response Management will implement the auditor's recommendation in the year ended June 30, 2023.
SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS 1. FINDING NUMBER: 2022- 004 2. THIS FINDING IS: X New Repeat from Prior year? Year originally reported? 3. Federal Program Name and Year: COVID 19: Education Stabilization Fund (2021 & 2022) 4. Project No.: 4998-E2, E3 5. CFDA No.: 84.425D-COVID 19, 84.425U-COVID 19 6. Passed Through: Illinois State Board of Education 7. Federal Agency: Department of Education 8. Criteria or specific requirement (including statutory, regulatory, or other citation) Strong internal controls over equipment and real property management compliance requirements require District personnel to have knowledge of all of the equipment and real property management compliance requirements. 9. Condition District personnel were unaware of the requirement to maintain property records for equipment purchased with Education Stabilization Funding. 10. Questioned Costs None 11. Context This condition existed for all equipment purchased with Education Stabilization Funding. 12. Effect The District did not maintain property records for equipment purchased in accordance with 2 CFR section 200.313(d)(1). 13. Cause The District has rarely paid for projects with federal funds in the past and was unaware of the requirement. 14. Recommendation Annually, District personnel should read the 2 CFR Part 200, Appendix XI, Compliance Supplement for all federal programs received by the District to ensure they are aware of all applicable compliance requirements. 15. Management's response Management will implement the auditor's recommendation in the year ended June 30, 2023.
FINDING 2022-007 Information on the federal program: Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Federal Agency: Department of Education Federal Program: COVID19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013, S425C200018 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness 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 awards 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 dunking for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property" (2) A physical inventory of the property must be taken, and the results reconciled with the property records at least once every 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 compliance requirement. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Equipment and Real Property Management compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have an effective control in place to ensure property records were properly maintained and included all required information. The School Corporation's property record did not include the following required information: a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, percentage of federal participation in the project costs for the federal award under which the property was acquired, use and condition of the property. The School Corporation did not perform a physical inventory of equipment during the audit period and did not have an internal control system in place to ensure a physical inventory was performed. There was no internal control system in place to ensure equipment was appropriately safeguarded and maintained. There was no evidence to show all equipment included on the property records was being appropriately safeguarded and maintained during the audit period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-007 Information on the federal program: Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Federal Agency: Department of Education Federal Program: COVID19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013, S425C200018 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness 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 awards 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 dunking for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property" (2) A physical inventory of the property must be taken, and the results reconciled with the property records at least once every 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 compliance requirement. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Equipment and Real Property Management compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have an effective control in place to ensure property records were properly maintained and included all required information. The School Corporation's property record did not include the following required information: a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, percentage of federal participation in the project costs for the federal award under which the property was acquired, use and condition of the property. The School Corporation did not perform a physical inventory of equipment during the audit period and did not have an internal control system in place to ensure a physical inventory was performed. There was no internal control system in place to ensure equipment was appropriately safeguarded and maintained. There was no evidence to show all equipment included on the property records was being appropriately safeguarded and maintained during the audit period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-007 Information on the federal program: Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Federal Agency: Department of Education Federal Program: COVID19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013, S425C200018 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness 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 awards 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 dunking for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property" (2) A physical inventory of the property must be taken, and the results reconciled with the property records at least once every 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 compliance requirement. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Equipment and Real Property Management compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have an effective control in place to ensure property records were properly maintained and included all required information. The School Corporation's property record did not include the following required information: a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, percentage of federal participation in the project costs for the federal award under which the property was acquired, use and condition of the property. The School Corporation did not perform a physical inventory of equipment during the audit period and did not have an internal control system in place to ensure a physical inventory was performed. There was no internal control system in place to ensure equipment was appropriately safeguarded and maintained. There was no evidence to show all equipment included on the property records was being appropriately safeguarded and maintained during the audit period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-007 Information on the federal program: Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Federal Agency: Department of Education Federal Program: COVID19 - Education Stabilization Fund Assistance Listings Numbers: 84.425C, 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013, S425U210013, S425C200018 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness 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 awards 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 dunking for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property" (2) A physical inventory of the property must be taken, and the results reconciled with the property records at least once every 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 compliance requirement. Cause: Management had not developed a system of internal controls that would have ensured compliance with the Equipment and Real Property Management compliance requirement. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of future federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation did not have an effective control in place to ensure property records were properly maintained and included all required information. The School Corporation's property record did not include the following required information: a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, percentage of federal participation in the project costs for the federal award under which the property was acquired, use and condition of the property. The School Corporation did not perform a physical inventory of equipment during the audit period and did not have an internal control system in place to ensure a physical inventory was performed. There was no internal control system in place to ensure equipment was appropriately safeguarded and maintained. There was no evidence to show all equipment included on the property records was being appropriately safeguarded and maintained during the audit period. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Identification as a repeat finding, if applicable: No Recommendation: We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
2022-019 Oregon Housing and Community Services Controls are needed to ensure subrecipients? compliance with equipment and real property requirements Federal Awarding Agency: U.S. Department of Housing and Urban Development Assistance Listing Number and Name: 14.231 Emergency Solutions Grants Program (COVID-19) Federal Award Numbers and Years: E-20-DW-41-0001, 2020 (COVID-19) Compliance Requirement: Equipment and Real Property Management Type of Finding: Material Weakness; Material Noncompliance Prior Year Finding: N/A Questioned Costs: N/A Criteria: 2 CFR 200.311; 2 CFR 200.313 There are specific requirements when equipment is purchased using federal funds and in use. At a minimum, procedures for managing equipment must meet the following requirements: ? Property records must be maintained that include key details (e.g. property description, ID number, Title, etc); ? 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; and ? Adequate maintenance procedures must be developed to keep the property in good condition. Real property purchased must be used for the originally authorized purpose as long as needed for that purpose. When real property is no longer needed for the originally authorized purpose, the non-federal entity must obtain disposition instructions from either the federal awarding agency or pass through entity. During our review, we determined OHCS was not monitoring its subrecipients to ensure the equipment and real property requirements were being met. Because subrecipients were not being monitored, we were unable to determine if there was a population of equipment and real property on which to perform our audit testing procedure. As a result, the department may not be in compliance with federal equipment and real property requirements. We recommend department management develop internal controls to ensure compliance with federal requirements for equipment and real property.
FINDING 2022-001 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: S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Modified Opinion INDIANA STATE BOARD OF ACCOUNTS 15 METROPOLITAN SCHOOL DISTRICT OF NORTH POSEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. 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's capitalization threshold was set at $500. The assets purchased during the audit period from the ESSER II grant award were not included in the School Corporation's capital asset listing. Expenditures included 90 Virtual Reality headsets, 9 vacuum cleaners, and 1 self-contained cleaning unit. Total acquisition cost of these assets was $54,731. Additionally, a physical inventory of equipment had not been performed in the last two years. 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. . . ." Cause Management had not established a system of internal controls that would have ensured compliance or that adequate documentation would have been maintained and made available for audit related to the grant agreement and the Equipment and Real Property Management compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 16 METROPOLITAN SCHOOL DISTRICT OF NORTH POSEY COUNTY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect The failure to retain and provide appropriate documentation prevented the determination of the School Corporation's compliance with the compliance requirement listed above. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure that documentation will be maintained and made available for audit and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation did not have adequate policies and procedures to ensure that proper and complete equipment records were maintained 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, use and condition of the property. The School Corporation's capital asset listing did not include assets purchased with ESSER I, ESSER II, or ARP ESSER monies from the COVID-19 - Education Stabilization Fund. All three assets selected for testing were not included on the capital asset listing presented for audit. 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 states in part: ". . . (b) . . . Other non-Federal entities must follow paragraphs (c) through (e) of this section. . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation did not have adequate policies and procedures to ensure that proper and complete equipment records were maintained 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, use and condition of the property. The School Corporation's capital asset listing did not include assets purchased with ESSER I, ESSER II, or ARP ESSER monies from the COVID-19 - Education Stabilization Fund. All three assets selected for testing were not included on the capital asset listing presented for audit. 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 states in part: ". . . (b) . . . Other non-Federal entities must follow paragraphs (c) through (e) of this section. . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation did not have adequate policies and procedures to ensure that proper and complete equipment records were maintained 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, use and condition of the property. The School Corporation's capital asset listing did not include assets purchased with ESSER I, ESSER II, or ARP ESSER monies from the COVID-19 - Education Stabilization Fund. All three assets selected for testing were not included on the capital asset listing presented for audit. 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 states in part: ". . . (b) . . . Other non-Federal entities must follow paragraphs (c) through (e) of this section. . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation did not have adequate policies and procedures to ensure that proper and complete equipment records were maintained 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, use and condition of the property. The School Corporation's capital asset listing did not include assets purchased with ESSER I, ESSER II, or ARP ESSER monies from the COVID-19 - Education Stabilization Fund. All three assets selected for testing were not included on the capital asset listing presented for audit. 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 states in part: ". . . (b) . . . Other non-Federal entities must follow paragraphs (c) through (e) of this section. . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation did not have adequate policies and procedures to ensure that proper and complete equipment records were maintained 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, use and condition of the property. The School Corporation's capital asset listing did not include assets purchased with ESSER I, ESSER II, or ARP ESSER monies from the COVID-19 - Education Stabilization Fund. All three assets selected for testing were not included on the capital asset listing presented for audit. 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 states in part: ". . . (b) . . . Other non-Federal entities must follow paragraphs (c) through (e) of this section. . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation did not have adequate policies and procedures to ensure that proper and complete equipment records were maintained 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, use and condition of the property. The School Corporation's capital asset listing did not include assets purchased with ESSER I, ESSER II, or ARP ESSER monies from the COVID-19 - Education Stabilization Fund. All three assets selected for testing were not included on the capital asset listing presented for audit. 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 states in part: ". . . (b) . . . Other non-Federal entities must follow paragraphs (c) through (e) of this section. . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 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, Other Matters Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation did not have adequate policies and procedures to ensure that proper and complete equipment records were maintained 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, use and condition of the property. The School Corporation's capital asset listing did not include assets purchased with ESSER I, ESSER II, or ARP ESSER monies from the COVID-19 - Education Stabilization Fund. All three assets selected for testing were not included on the capital asset listing presented for audit. 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 states in part: ". . . (b) . . . Other non-Federal entities must follow paragraphs (c) through (e) of this section. . . . (d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: INDIANA STATE BOARD OF ACCOUNTS 19 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
1. Equipment Management Finding Number: 2022-002 Assistance Listing Number and Title: AL #84.425 COVID-19- Education Stabilization Fund Federal Award Identification Number / Year: 2022 Federal Agency: U.S. Department of Education Compliance Requirement: Section F: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for 2 CFR ? 200.313(d)(1) which provides that property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The School District purchased HVAC equipment in the amount of $1,032,599 using COVID 19: Education Stabilization Fund- Elementary and Secondary School Emergency Relief Funds. However, the School District failed to add these assets to their capital asset listing due to inadequately designed controls. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer and Superintendent should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.
1. Equipment Management Finding Number: 2022-002 Assistance Listing Number and Title: AL #84.425 COVID-19- Education Stabilization Fund Federal Award Identification Number / Year: 2022 Federal Agency: U.S. Department of Education Compliance Requirement: Section F: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for 2 CFR ? 200.313(d)(1) which provides that property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The School District purchased HVAC equipment in the amount of $1,032,599 using COVID 19: Education Stabilization Fund- Elementary and Secondary School Emergency Relief Funds. However, the School District failed to add these assets to their capital asset listing due to inadequately designed controls. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer and Superintendent should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.
1. Equipment Management Finding Number: 2022-002 Assistance Listing Number and Title: AL #84.425 COVID-19- Education Stabilization Fund Federal Award Identification Number / Year: 2022 Federal Agency: U.S. Department of Education Compliance Requirement: Section F: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR ? 3474.1 gives regulatory effect to the Department of Education for 2 CFR ? 200.313(d)(1) which provides that property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The School District purchased HVAC equipment in the amount of $1,032,599 using COVID 19: Education Stabilization Fund- Elementary and Secondary School Emergency Relief Funds. However, the School District failed to add these assets to their capital asset listing due to inadequately designed controls. The failure to properly record assets can lead to difficulties maintaining accountability for the related assets. The Treasurer and Superintendent should monitor transactions and ensure that all capital additions are properly documented in the capital asset records.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, 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 An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that 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 the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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: "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 Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, 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 An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that 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 the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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: "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 Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, 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 An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that 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 the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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: "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 Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, 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 An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that 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 the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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: "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 Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, 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 An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that 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 the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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: "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 Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425 Federal Award Numbers and Years (or Other Identifying Numbers): S425C200018, 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 An effective internal control system, which would include segregation of duties, was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. The School Corporation had not designed, nor implemented a system of internal control to ensure new equipment was properly handled. The School Corporation paid for a HVAC system totaling $153,476 with Education Stabilization Funds. These assets were not added to a detailed listing of capital assets that 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 the use and condition of the property. In addition, a physical inventory had not been taken in the past two years and assets were not properly safeguarded and maintained. 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: "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 Management had not designed nor implemented a system of internal control that would have ensured compliance with the grant agreement and the Equipment and Real Property Management compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish internal controls to ensure compliance and comply with the grant agreement and the Equipment and Real Property Management compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.