Finding Text
Finding: The District did not always comply with Federal regulations by maintaining inventory records to identify the location of certain equipment, resulting in ESSER Fund questioned costs totaling $1,565,006.14. Criteria: Title 2, Section 200.313(d)(1), CFR, requires that for equipment, 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 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. Title 2, Section 200.313(a), CFR, defines equipment as tangible property, including information technology systems, having a useful life of one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization threshold established by District. Per Board Policy 7.77 ? Inventories and Property Records, the Superintendent or designee shall maintain an adequate and accurate record of all tangible personal property of the District. All equipment shall be listed that has a value or cost of $1,000 or more. Condition: During the 2021-22 fiscal year, District ESSER Fund expenditures totaled $7,086,240.23, including $3,423,497.39 expended for capital outlay. As part of our audit, we examined District records and noted equipment acquisitions totaling $1,565,006.14 for 513 items with costs exceeding the District?s $1,000 capitalization threshold. Although we requested, District personnel did not provide inventory records to identify the location of any of these items. Cause: District personnel indicated that the missing inventory information was an oversight as the employee responsible for recording property items in the inventory records was not timely provided with the appropriate acquisition information. Effect: Without effective accountability over Federal equipment, including the maintenance of appropriate inventory records, there is an increased risk that the equipment may be used for unauthorized purposes. Absent identification of the equipment location, the ESSER Fund equipment acquisitions totaling $1,565,006.14 represent questioned costs. Recommendation: The District should conduct a thorough investigation of the ESSER Fund capital outlay expenditures to identify equipment acquisitions with costs exceeding the District $1,000 capitalization threshold, locate the applicable items, and prepare and maintain appropriate inventory records for those items. In addition, the District should restore to the FDOE the questioned costs related to any unlocated items and contact applicable law enforcement agencies regarding other necessary actions to help recover the equipment. District Response: The District will enhance inventory records and procedures to ensure that all property items are properly recorded in order to maintain accountability of items purchased with Federal funds. Additionally, the District will consult with the grantor agency regarding the allowability of the questioned costs.