Finding Text
Condition The School Board was unable to provide sufficient documentation for certain grant-funded asset disposals. Four of the assets tested during the audit were missing, and no supporting disposal documentation could be provided. Criteria Federal regulations require that asset dispositions be reported to the grantor when the fair market value at the time of disposal is $5,000 or more, to determine if a portion of the value or proceeds must be reimbursed to the grantor. Additionally, asset disposals must comply with state law and be properly reflected in the property records. Cause The School Board’s internal control policies and procedures were not operating effectively to ensure that all assets were properly safeguarded and/or disposed of in accordance with federal and state requirements. Effect Failure to properly document and account for asset disposals increases the risk of misuse or misappropriation of assets and noncompliance with federal and state regulations. Context A non-statistical sample of two disposals from a population of two was tested. Both disposals lacked supporting documentation for the disposal process. Recommendation The School Board should strengthen and enforce policies and procedures to ensure that all grant-funded and other assets are properly accounted for and disposed of in accordance with federal and state requirements. Views of Responsible Officials and Planned Corrective Action During the recent audit, several assets were randomly selected for review by the auditors. Four of the assets selected were supposed to have been removed from the capital asset listing, but were not removed because the required documentation was not remitted to the Accounting Department. Going forward, accounting staff will visit all schools to conduct a capital asset audit to ensure the capital asset listing is accurate and to provide additional training to school based staff.