Finding Text
Finding: The District does not have a process to identify federal capital assets or ensure program requirements for capital purchases are met. Criteria: The May 2024 Office of Management and Budget Compliance Supplement states the following for Compliance Requirements – Equipment and Real Property Management- “..prior approval by the pass-through entity to purchase real property and perform construction for improvements to land, buildings or equipment that meet the overall purpose of the program.” “any purchases with ESF Funds in this category are subject to applicable inventory control, log maintenance, and disposition requirements consistent with Part 3, Section F, “Equipment/Real Property Management” Condition: The District did not identify two vehicle purchases with ESF funds exceeding the capitalization threshold of $5,000 for capitalization in District records. The District did not obtain the required prior approval from the state of Iowa for the vehicle purchases. In addition, the District does not have an inventory process to ensure federal assets are properly identified and documented in accordance with the Office of Management and Budget Compliance Supplement. Cause: The District has had significant turnover in the Business Office. Effect: Federal capital assets are not properly identified and capitalized. Questioned costs: $74,217 Context: The District purchased two vehicles for $74,217. Identification as a repeat finding: This is not a repeat finding. Recommendation: We recommend the District implement a process to ensure federal expenditures are compared to program requirements such as pre-approval. We recommend the District implement a process to identify and document all capital assets purchased with federal program funding in compliance with the Office of Management and Budget.