Finding Text
Finding No. 2023-014 Federal Agency: U.S. Department of Education AL Program: COVID-19 84.425A/84.425X Education Stabilization Fund Federal Award No.: S425A210001 and S425X210001 Area: Equipment and Real Property Management Questioned Costs: Undeterminable Criteria: In accordance with 2 CFR 200.313(b), a state must use, manage, and dispose of equipment acquired under a federal award in accordance with state laws and regulations. In accordance with 2 CFR 200.313(d)(1), property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including the FAIN), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property. Further, in accordance with 2 CFR 200.313 (3), a control system must be developed to ensure adequate safeguards to prevent loss, damage or theft of the property. Lastly, 2 CFR 200.313(d)(4) requires that adequate maintenance procedures must be developed to keep the property in good condition. Condition: 1. The capital assets listing maintained by PSS is incomplete and does not include all information for equipment and real property required under 2 CFR 200.313(d)(1), such as the federal participation percentage and the condition of the asset. No questioned costs are presented as we are not able to quantify the extent of noncompliance. 2. PSS lacks standardized and consistently implemented internal controls over safeguarding and maintenance of equipment across schools and offices. For twenty-six (or 96%) of the twenty-seven locations selected for testing, no maintenance procedures and safeguarding measures for equipment were documented. Cause: 1. PSS policies and procedures over capital assets management have not been fully updated to align with federal requirements under 2 CFR § 200.313 (d) (1), resulting in incomplete capital asset records. 2. PSS does not have a centralized and standardized system for safeguarding and maintaining equipment across all schools and offices for each type of equipment. Effect or potential effect: PSS is in noncompliance with applicable Equipment and Real Property Management requirements. Incomplete asset records and inconsistent safeguarding and maintenance practices increase the risk of loss, misuse, theft, or deterioration of federally funded property. Questioned costs are undetermined as we are unable to quantify the extent of noncompliance. Identification as Repeat Finding: Finding No. 2022-010 Recommendation: 1. PSS should update the structure and contents of their current capital asset listing to ensure all information required by 2 CFR 200.313(d)(1) is fully captured, maintained, and kept current for all equipment and real property acquired with federal funds. 2. PSS should revise and strengthen policies and procedures related to capital asset management to ensure alignment with federal requirements, including recordkeeping, inventory, safeguarding, and maintenance. 3. PSS should establish and implement centralized or standardized safeguarding and maintenance controls which should serve as minimum required procedures for all schools and offices regardless of equipment type. Views of Auditee and Corrective Action Plan: PSS concurs with the finding. Refer to PSS’ Corrective Action Plan for additional information.