Finding Text
Finding No. 2022-010
Federal Agency: U.S. Department of Education (ED)
Assistance Listing No. and Title: 84.425 Education Stabilization Fund
Area: Equipment and Real Property Management
Questioned Costs: $854,432
Criteria:
The Schedule of Expenditures of Federal Awards (SEFA) must be supported by underlying accounting and other records used in preparing the financial statements.
§ 2 CFR 200.313(b) provides that a state must use, manage and dispose of equipment acquired under a Federal award by the state in accordance with state laws and procedures.
PSS Rules and Regulations § T60-20-815 Inventory Requirements Section (c)(1) provides that a fixed asset at its inception shall be assigned to one individual, who will be responsible for the care and maintenance of the specified fixed asset. The employee, who is in direct control of the fixed asset (not the supervisor of the employee), and who is using the fixed asset, shall sign for the fixed asset. Refusal to sign as the custodian of a fixed asset shall prohibit the employee from custody of the fixed asset.
Condition:
1. As of September 30, 2022, the total amount of equipment acquired under ALN 84.425X per equipment schedule or subsidiary ledger was lower by $18,147 as compared to the total amount of equipment expenditures identified in the general ledger journal entry details supporting the SEFA.
2. For 10 (or 100%) of 10 equipment transactions tested, aggregating $854,432 of $2,296,719 in total amount of equipment costs identified as of September 30, 2022, no evidence of custodian signature at inception of the fixed asset was provided. However, printed copies of the property master information record from the JD Edwards system were signed and dated by the custodian and a verifier as evidence of the most recent physical inspection in September 2022.
See Schedule of Findings and Questioned Costs for chart/table.
Cause:
PSS’ existing fixed asset management policies are insufficient to ensure proper management of equipment and real property.
Effect:
PSS is in noncompliance with applicable equipment and real property requirements. The reportable questioned cost is $854,432.
Identification as a repeat finding: 2021-004
Recommendation:
PSS should improve its existing fixed asset management policies to align with the Federal requirements on equipment and real property management. The Office of Procurement and Supply should consider developing standard forms and templates that can be used to document compliance with recordkeeping, custodianship, and physical count policies.
Views of responsible officials:
PSS agrees with the finding and describes corrective actions in the PSS Corrective Action Plan.