Finding Text
CRITERIA/SPECIFIC REQUIREMENT:
The Regional Office of Education No. 39 did not have adequate record keeping over its equipment
acquired from federal funds.
The Code of Federal Regulations (2 CFR §200.313(d)(1)) requires that procedures for managing equipment acquired with federal funds must maintain property records that include the following information: (i) a description of the property, (ii) manufacturer’s serial number or other identification number, (iii) source of the funding for the property (including the FAIN), (iv) who holds title, (v) acquisition date (vi) cost of the property, (vii) percentage of federal contribution in the project cost for the Federal award under which the property was acquired, (viii) location (ix) use and condition of the property, and (x) and any ultimate disposition data, including date of disposal and sale price of the property.
Moreover, the Code (2 CFR §200.313(d)(2)) requires that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.
In addition, the Code (2 CFR §200.303 (a)) requires the Regional Office of Education No. 39 to establish and maintain effective internal control over the federal award to provide reasonable assurance the Regional Office of Education No. 39 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 record keeping and monitoring of equipment acquired from federal funds.
CONDITION:
The Regional Office of Education No. 39 asset details in the property records include only the description of the property, acquisition date, and cost of the property. The other minimum requirements specified by the Code are not included in the property records.
Moreover, the Regional Office of Education No. 39 was unable to properly account for the results of its physical inventory count and only performed partial reconciliation.
EFFECT:
Inadequate record keeping over equipment acquired from federal funds may result in noncompliance with the Code. Additionally, incomplete reconciliation of physical inventory can lead to discrepancies in financial reporting, affecting overall accountability.
CAUSE:
Management indicated the issue was due to oversight and lack of training on requirements by the previous management.
RECOMMENDATION:
We recommend the Regional Office of Education No. 39 comply with federal regulations by
monitoring equipment acquired from federal funds and establish a regular schedule for
comprehensive reconciliation of physical inventory to ensure accurate financial reporting and
enhance overall accountability.
MANAGEMENT’S RESPONSE:
The Regional Office of Education No. 39 agrees with the audit findings and is implementing
documents and procedures to meet requirements in the future.