Finding Text
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(c) through (d) which require that:
(c) Equipment must be used in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by the Federal award or, when appropriate, under other Federal awards; however, the non-Federal entity must not encumber the equipment without prior approval of the Federal awarding agency.
(d) Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements:
1. Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property.
2. A physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years.
3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated.
4. Adequate maintenance procedures must be developed to keep the property in good condition.
5. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return.
The School District failed to properly track assets purchased or improvements completed with ESF (specifically Elementary and Secondary School Emergency Relief (ESSER)) funds in their Equipment Inventory System. In addition, support was not provided that the required physical inventory of equipment was being performed.
The School District Treasurer should review the Equipment Inventory System and adjust it to include all assets purchased with ESSER Funds. The School District should establish procedures to ensure the required physical inventories are being performed and reconciled with the Equipment Inventory System at least every two years.