Finding 1159868 (2022-003)

Material Weakness Repeat Finding
Requirement
F
Questioned Costs
-
Year
2022
Accepted
2025-10-03

AI Summary

  • Core Issue: The District failed to track equipment acquired with federal funds according to Uniform Guidance requirements.
  • Impacted Requirements: Missing details in equipment records, such as funding source, title holder, federal participation rate, and asset condition.
  • Recommended Follow-Up: Develop and implement policies to ensure proper identification and tracking of federally funded assets in capital asset records.

Finding Text

2022-003 – Equipment and Real Property Management Finding Type – Material Noncompliance/Material Weakness in Internal Control over Compliance (Equipment and Real Property Management.) Program – Formula Grants for Rural Areas (ALN# 20.509) Criteria – The Uniform Guidance requires a non-federal entity that has expended federal awards for a grant award on or after December 26, 2014 to track equipment acquired with federal funding in its capital asset records. Condition – Equipment records do not include source of funding which includes the federal award identification number, who holds the title, the federal participation rate, and the location, use and condition of the asset to be in accordance with the Uniform Guidance. Cause – This condition appears to be the result of a lack of internal controls designed to ensure compliance with Uniform Guidance. Effect – As a result of this condition, the District did not fully comply with the Uniform Guidance applicable to the above noted grants. Recommendation – We recommend that the District develop policies to ensure that assets acquired with federal funds are properly identified in capital assets records. View of Responsible Officials – We agree with the recommendation and have developed a procedure to list capital assets that are acquired with federal funds.

Corrective Action Plan

Plan of Action: The District’s plan is a two-pronged approach to ensure that appropriate policies and procedures are in place and that recording of assets whose resources include federal funds will clearly indicate the federal award identification number, who holds the title, the participation rate, the location, use, and condition that the asset is to be put to in accordance with uniform guidance. A. The District will implement a robust Capital Asset Policy to be reviewed and approved by the District’s Board of Directors. Standard Operating Procedures will accompany the policy and will be the standard guidelines in which all capital assets will be treated, regardless of where the funding resources are generated from. B. The District plans to use it’s accounting software, SAGE 50, and capital asset software, FAS, to document funding resources, which should include all the required information as noted in Uniform Guidance. Additionally, capital asset invoices will include proper documentation showing the funding resources and required information. Date of implementation: The policies and procedures will be reviewed by the Board of Directors no later than December 10, 2025, and will be retroactive to July 1, 2025, in order to consistently apply the policy and procedures to FY 2026. The District, if time will allow, may retroactively apply the policy to prior Fiscal Years.

Categories

Equipment & Real Property Management Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1159867 2022-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
20.509 Formula Grants for Rural Areas and Tribal Transit Program $230,821
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $209,556