Finding 2022-003: Equipment (50000)Assistance Listing No. 84.425 ? Education Stabilization Fund,Elementary and Secondary School Emergency Relief (ESSER) FundU.S. Department of EducationPassed through California Department of EducationCriteria: Consistent with 2 CFR section 200.311 (real property), section 200.313 (equipment), and section 200.439 (equipment and other capital expenditures) ESF funds may be used to purchase equipment. Capital expenditures for general and special purpose equipment purchases are subject to prior approval by ED or the pass-through entity.Nonfederal entities shall include in their construction contracts subject to the Wage Rate Requirements (which still may be referenced as the Davis-Bacon Act) a provision that the contractor or subcontractor comply with those requirements and the DOL regulations (29 CFR Part 5, Labor Standards Provisions Applicable to Contacts Governing Federally Financed and Assisted Construction). This includes a requirement for the contractor or subcontractor to submit to the nonfederal entity weekly, for each week in which any contract work is performed, a copy of the payroll and a statement of compliance (certified payrolls) (29 CFR sections 5.5 and 5.6; the A-102 Common Rule (section 36(i)(5)); OMB Circular A-110 (2 CFR Part 215, Appendix A, Contract Provisions); 2 CFR Part 176, Subpart C; and 2 CFR section 200.326).Condition: The District made three expenditures above the capital threshold for federal purchases but did not obtain prior approval from the California Department of Education. Furthermore, the District was unable to provide documentation that federal wage rate requirements were included in the contracts.Question Costs: $66,608Context: These were the only capital purchases made from this federal program in the year under audit.Cause: The District was unaware of the requirements to obtain prior approval from CDE and to obtain federal wage rate data.Effect: The funds spent on these purchases may be subject to review by or return to the awarding agency.Recommendation: We recommend that the District obtain prior approval from CDE and that contracts include federal wage rate requirements for all capital purchases from the Education Stabilization Fund.Views of Responsible Officials: The District will ensure it receives prior approval from CDE prior to making expenditures utilizing ESSER funds and will update its agreements to reflect the federal wage rate requirements when utilizing this funding.
Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Criteria: §2 CFR 200.439 Equipment and other capital expenditures establish that “(1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity, (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity.” Condition: From a sample of fifteen (15) equipment, COR3 was unable to provide supporting evidence for approval from the federal agency for one (1) purchase transaction that requires such prior approval. Cause: Lack of supervision to ascertain compliance with requirements and procedures established for purchase of specialized equipment with a cost of $5,000 or more. Effects: Lack of supervision may result in noncompliance with the allowable costs/cost principles requirements. Questioned Costs: $54,959.25 Recommendation: We recommend management to increase the level of supervision to ascertain the established requirements for the purchase of specialized equipment are met.
Criteria: §2 CFR 200.439 Equipment and other capital expenditures establish that “(1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity, (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity.” Condition: From a sample of fifteen (15) equipment, COR3 was unable to provide supporting evidence for approval from the federal agency for one (1) purchase transaction that requires such prior approval. Cause: Lack of supervision to ascertain compliance with requirements and procedures established for purchase of specialized equipment with a cost of $5,000 or more. Effects: Lack of supervision may result in noncompliance with the allowable costs/cost principles requirements. Questioned Costs: $54,959.25 Recommendation: We recommend management to increase the level of supervision to ascertain the established requirements for the purchase of specialized equipment are met.