Finding Text
Material Weakness
Material Noncompliance
Program: Assistance Listing: 84.425D – Elementary and Secondary School Emergency Relief Fund
Repeat Finding: No
Criteria: Under 2 CFR Part 200, entities receiving federal funds must follow the stricter of regulations between state and federal guidelines for purchasing and tracking equipment. Specifically, 2 CFR 313 requires recipients to maintain detailed property records for equipment acquired with federal awards. These records must include descriptions, identification numbers, funding sources, acquisition dates, costs, federal contribution percentages, locations, usage, conditions, and disposal information. Recipients must also update these records whenever the status of the property changes. Specifically, the Mississippi Public School Asset Management Manual requires school districts to maintain current inventories of property items valued at $1,000 or more. Additionally, other items, such as cameras, camera equipment, televisions, computers and computer equipment equal to or greater than $250, must be included in the inventory. Other equipment such as tools, furniture and other assets regardless of their purchase price or fair market value must be included. This also requires thorough tracking and management of school assets.
Condition: The District’s internal controls over fixed asset inventory were inadequate to ensure that the District followed its internal control policies on fixed assets, which require all assets above a certain threshold and others regardless of cost to be listed in its fixed asset system. As a result, we observed approximately $260,627 in equipment purchased with federal grant (ESSER II) that was not properly included in the District’s fixed asset system.
Context/
Perspective: This finding is a result of our statistically valid random sample of forty fixed assets inventory observation for single audit purposes and the conditions cited appear to be a systematic issue.
Cause: The District’s internal control system is inadequate to ensure that the fixed asset system fulfilled the requirements of the current District internal control policy, “Fixed Asset Accountability” is inadequate.
Effect: Failure to follow the federal and state requirements could affect future eligibility for federal award programs or could result in a loss or misappropriation of public assets.
Questioned Costs: None
Recommendation: We recommend that the District implement additional internal controls to improve the monitoring activities element of its current internal control system which will ensure that it fulfills the standards for Federal requirements of “Equipment and Real Property Management” contained in the U. S. Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200, Subpart D, section 200.313(d)(1).
Views of
Responsible
Officials: The Auditee’s Corrective Action Plan on pages 99-100 lists the District’s response to the findings.