Finding Text
FINDING 2023-002
Subject: Emergency Connectivity Fund Program - Equipment and Real Property Management
Federal Agency: Federal Communications Commission
Federal Program: Emergency Connectivity Fund Program
Assistance Listings Number: 32.009
Federal Award Numbers and Years (or Other Identifying Numbers): FY 2022, FY 2023
Compliance Requirement: Equipment and Real Property Management
Audit Findings: Material Weakness, Other Matters
Condition and Context
Emergency Connectivity Fund (ECF) Program participants are required to maintain an asset inventory
of the devices purchased with ECF Program support.
For each connected device not provided to an individual student or school staff member, but used
to provide service to multiple eligible users, the asset inventory must identify:
1. The device or equipment type (i.e., laptop, tablet, mobile hotspot, modem, router);
2. The device or equipment make/model;
3. The device or equipment serial number;
4. The name of the school employee responsible for that the device or equipment; and
5 The dates the device or equipment was in service.
The School Corporation had not designed or implemented adequate policies or procedures to
ensure that the devices acquired with ECF program funds were properly supported by inventory records.
A sample of 21 devices were selected for testing to verify that inventory records contained all the necessary
information. Of the 21 devices tested, 8 did not include information with regard to the name of the school
employee responsible for the device as no specific employee was assigned by the School Corporation.
The lack of internal controls and noncompliance were systemic issues throughout the audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
INDIANA STATE BOARD OF ACCOUNTS
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LAFAYETTE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
47 CFR 54.1715(a)(2) states:
"For each connected device or other piece of eligible equipment not provided to an individual
student, school staff member, or library patron, but used to provide service to multiple eligible
users, the asset inventory must contain:
(i) The device type or equipment type (i.e. laptop, tablet, mobile hotspot, modem,
router);
(ii) The device or equipment make/model;
(iii) The device or equipment serial number;
(iv) The name of the school or library employee responsible for that device or equipment;
and
(v) The dates the device or equipment was in service."
Cause
A proper system of internal controls was not designed by management of the School Corporation.
Embedded within a properly designed and implemented internal control system should be internal controls
consisting of policies and procedures. Policies reflect the School Corporation's management statements
of what should be done to effect internal controls, and procedures should consist of actions that would
implement these policies.
Effect
Without the proper implementation of an effectively designed system of internal controls, the
internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance. As a result, the asset inventory did not contain all the necessary information.
Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of
the federal award could result in the loss of future federal funding to the School Corporation.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation establish a system of internal
controls and develop policies and procedures to ensure that the asset inventory contain all the necessary
information.
INDIANA STATE BOARD OF ACCOUNTS
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LAFAYETTE SCHOOL CORPORATION
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.