Finding 1120885 (2024-001)

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D PASS-THROUGH NUMBER 3505 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 2024-001. Equipment and Real Property Management Criteria or specific requirement: Property records must be maintained for equipment acquired with federal awards as specified in OMB 2 CFR section 200.313. Condition: A test of the COVID-19 Education Stabilization Fund disbursements and walkthrough procedures revealed that 165 equipment items purchased with a cost greater than $1,000 each were not recorded in the District's equipment subsidiary ledger. The total cost of the equipment was $303,150. The subsidiary ledger was subsequently corrected by the District during audit fieldwork. A similar finding was reported in the previous audit. Cause: Lack of internal controls over the equipment subsidiary ledger. Effect or potential effect: The District's equipment subsidiary records were not accurate. Context: All equipment purchases from the federal program were reviewed, which consisted of 1 invoice totaling $303,150 that contained 165 equipment items. Identification as a repeat finding: Yes Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education for guidance regarding this matter and implement proper controls over program expenditures. Views of responsible officials: The District concurs with this finding. The total population consisted of one invoice that contained 165 equipment items. The District's newly implemented equipment control process was followed; items were correctly coded, issued asset identification numbers, added to internal inventory listing, then tagged. This process ensured the items would be tracked over time, however the District recognizes deficiencies exist in this process, which resulted in inaccurate records.