Finding 1132454 (2023-005)

U.S. Federal Communications Commission Program Name: Emergency Connectivity Funds Assistance Listing Number: 32.009 Finding: 2023-005 – Equipment & Real Property Management Criteria: Internal controls should be in place to ensure that equipment and real property management requirements are met as specified in the guidance provided by the Federal Communications Commission (FCC). FCC guidance specified that the District was required to maintain asset inventories of the devices purchased with the ECF program. The Uniform Guidance requires any recipients of federal awards to comply with the equipment and real property management requirements indicated by the grantor agency. Condition: The District did not have adequate internal controls to ensure compliance with equipment and real property management requirements. Context/cause: During our testing of equipment and real property requirements, the District made bulk purchases of laptops and wi-fi hot spots that had a total purchase value over the $10,000 capital asset threshold. Upon the initial review of the District’s capital asset listing, these bulk equipment purchases were not included. An adjustment in the General Fund totaling $19,776,000 was required to report the capital outlay expenditure and grant revenue. Effect: Equipment purchases made with grant funding could be improperly excluded from the capital asset listing which would misstate the District’s capital asset balances. Questioned Costs: $19,776,000 Recommendation: We recommend the District enhances internal controls to ensure accuracy and compliance with equipment and real property requirements. Auditee’s Response: We concur with this finding.