Finding Text
50000 – Equipment and Real Property Management (Material Weakness in Internal Control over Compliance, Material Noncompliance)
Federal Program Affected
Federal Agency: U.S. Department of Education
Pass-Through Entity: California Department of Education (CDE)
Program Name: COVID-19: Elementary and Secondary School Emergency Relief II (ESSER II)
Assistance Listing Number: 84.425D
Criteria or Specific Requirements
Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.313 requires the District to maintain inventory of equipment purchased with federal awards. In addition, Title 2, Code of Federal Regulations, Part 200, Subpart E, Section 200.439 requires the District to obtain written approval from the California Department of Education (CDE) prior to purchasing equipment for which the per unit costs exceeds $5,000.
Condition
The District does not maintain a capital asset inventory. In addition, the District expended $1,513,982 of ESSER II funds on capital expenditures that were not preapproved by the passthrough agency, as required.
Questioned Costs
As a result of the condition identified above, a total of $1,513,982 in questioned costs were identified.
Context
The condition was identified as a result of inquiry with the District’s personnel and review of ESSER II expenditures and related invoices.
Effect
The District currently assumes all the risk of non-compliance with requirements stated under Title 2, Code of Federal Regulations, Part 200, Subpart E, Sections 200.313 and 200.439 due to the lack of maintaining a capital asset inventory and lack of preapproval from the pass-through agency, as required.
Cause
The condition identified appears to have materialized due to the District's lack of awareness of requirements under Title 2, Code of Federal Regulations, Part 200, Subpart E, Sections 200.313 and 200.439.
Repeat Finding
No
Recommendation
The District should review the requirements stated in Title 2, Code of Federal Regulations, Part 200, Subpart E, Sections 200.313 and 200.439 and implement procedures to address the deficiencies currently identified.