Finding Text
FINDING 2024-001
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 Numbers: 84.425D, 84.425U
Federal Award Numbers and Years (or Other Identifying Numbers): 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
The School Corporation had not properly designed a system of internal controls in order 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 is required to be maintained for all equipment purchased
with the COVID-19 - Education Stabilization Fund grant award to ensure adequate safeguards are in place
to prevent loss or damage of items. Equipment to be included in the listing is that which exceeds the School
Corporation's capital asset threshold of $5,000.
The School Corporation's capital asset listing did not include the following required information:
The source of funding for the property (including the federal award identification number).
The percentage of federal participation in the project costs for the federal award under
which the property was acquired.
In one instance, it did not include an identification number.
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). . . ."
INDIANA STATE BOARD OF ACCOUNTS
16
GREENSBURG COMMUNITY SCHOOLS
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
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.
(4) Adequate maintenance procedures must be developed to keep the property in good
condition. . . ."
Cause
The School Corporation's management was not aware of all the items required to be included in
the capital asset listing.
Effect
The failure to establish an effective system of internal controls placed the School Corporation in
noncompliance with the grant agreement and the Equipment and Real Property Management compliance
requirement. The School Corporation's capital asset listing did not include all information required for
assets acquired with federal funds. Noncompliance with the grant agreement and the compliance requirement
could result in the repayment of federal funds.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the School Corporation's management establish a proper system of internal
controls that would ensure compliance with the Equipment and Real Property management records and
update its capital asset listing to include all required information.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.