Finding Text
Finding 2023-002: Equipment Inventory Management (50000)
Assistance Listing No. 84.425 – Education Stabilization Funds (ESSER)
U.S. Department of Treasury
Passed through California Department of Education
Criteria: The LEA must maintain documentation to substantiate that all equipment purchases are reasonable, necessary, and allowable in accordance with federal state and program requirements. Also, an LEA must establish and maintain a historical inventory system for equipment with an acquisition cost of $500 or more per unit, which contains all required elements as specified in 2 CFR 200.313(d)(1) and the LEA must conduct a physical inventory of the property and the results must be reconciled with the property records at least once every two years. In addition, the LEA must obtain prior written approval from CDE for capital expenditures to be allowable; and the LEA must follow applicable construction regulations. The LEA must ensure heating, ventilation, and air conditioning (HVAC) systems require the use of American Society of Heating, Refrigeration, and Air Conditioning Engineer (ASHRAE) standards and the LEA must ensure every contract for minor remodeling, renovation, repair, or construction contracts in excess of $2,000 contains a provision stating the prevailing wages that must be paid to laborers and mechanics that are not less than those established for the locality of the project. The LEA is required to have a system of internal control which provides reasonable assurance that all costs charged to the programs are reasonable, necessary, and allowable in accordance with applicable statutes, regulations, and program requirements.
Condition: The LEA failed to provide documentation to show a complete inventory that includes all required elements and all equipment purchased with Federal Stimulus funds. For example, the LEA purchased markerboard, Dell Latitude computers, and tables using Federal Stimulus funds with ESSER II (Resource 3212) and ESSER III (Resource 3213); however, the items were not properly documented on the LEA’s inventory to substantiate the total of $28,330.66 in equipment purchased with Federal stimulus funds. In addition, the LEA failed to provide evidence of the physical check at least once every two years. Additionally, the LEA’s procedures for the equipment inventory does not contain all required elements in the asset tag - Percent of Federal Award; Transfer; Disposition; Replacement; Use and Current Condition; Fund Source; and Evidence of the physical check.
Cause: The LEA has experienced significant employee turnover, which has caused a lack of oversight of certain compliance requirements.
Effect: Equipment purchased with federal funds may not be specifically identified.
Questioned Costs: $28,330.66
Context: The finding was the result of Federal Program Monitoring (FPM) procedures performed by the CDE.
Recommendation: The County has already cleared this finding with CDE. No further action is needed.
Views of Responsible Officials: The County has already cleared this finding with CDE. In addition, we have updated the procurement policies to match Uniform Guidance requirements.