Finding Text
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE – PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION – COVID-19 – EDUCATION STABILIZATION FUND (FEDERAL ALN 84.425)
2023-003 Internal Control Over Compliance With Equipment and Real Property Management Requirements
Criteria – 2 CFR § 200.313(d)(1) requires Universal Academy (the Academy) to designate fixed assets purchased under federal programs and to maintain related property records, including a description of the property, a serial number or other unique identification number, the source of funding for the property (including the federal Assistance Listing Number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use, and condition of the property, and any ultimate disposition data, including the date of disposal and sale price of the property.
Condition – During our audit, we noted that the Academy did not have sufficient controls in place within the COVID-19 – Education Stabilization Fund federal program to specifically identify federally-funded fixed assets and maintain the required records, as noted above, to assure compliance with federal equipment and real property management requirements.
Questioned Costs – None. Our testing did not indicate any instances of noncompliance.
Context – A population of one applicable fixed asset purchased with federal awards was noted during the course of our audit. This was not a statistically valid sample.
Repeat Finding – This is a current year and prior year finding.
Cause – The Academy did not did not have a system in place for specifically identifying federally-funded fixed assets and maintaining the required records as noted above.
Effect – This could be viewed as a violation of the award agreement.
Recommendation – We recommend that the Academy review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management for the COVID-19 – Education Stabilization Fund federal program.
View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy intends to review its 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.