Finding Text
2023-001. Equipment and Real Property Management
Education Stabilization Fund (ESF)
COVID-19: Elementary and Secondary Emergency Relief Fund ALN: 84.425D
COVID-19: American Rescue Plan – Elementary and Secondary
School Emergency Relief ALN: 84.425U
COVID-19: American Rescue Plan – Elementary and Secondary
School Emergency Relief – Homeless Children and Youth ALN: 84.425W
Criteria: 2 CFR §200.313 of the Uniform Guidance issued by the U.S. Office of Management and Budget requires management to have procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place. This includes maintaining property records 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 (FAIN), and who holds title. In addition, it requires the District to track the acquisition date and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property.
Condition: The District did not include equipment purchased with Federal grant funds in its current year additions in the District’s capital assets inventory records.
Cause: The District uses specific codes to identify and track equipment purchased during the year. Since the District did not have adequate procedures in place to review and reconcile the District’s equipment purchase codes to the annual capital assets additions, the equipment purchased under the Federal grants was inadvertently omitted from the current year capital assets inventory additions.
Effect: The inability to include and differentiate capital assets acquired with Federal awards in the capital assets inventory records could lead to improper procedures for disposal of those capital assets.
Questioned Costs: None reported.
Context: The District rarely uses Federal grant funds for the purchase of equipment. As a result of this, when the District was compiling the listing of equipment purchased during the year, to be provided to the District’s third-party capital asset management company, the equipment purchased using Federal grant funds was inadvertently omitted from the listing.
Recommendation: The District should implement procedures where there is a formal reconciliation performed annually for all of the District’s equipment expenditure codes and the additions to the District’s capital assets inventory. This will ensure that all equipment purchased with Federal funds is captured and included in the capital assets inventory records. Additionally, all capital assets additions purchased with Federal funds should be managed in accordance with 2 CFR §200.313.
Views of Responsible Officials of Auditee: Management agrees with the finding and will ensure that the equipment purchased with Federal funds is identified and included in the District’s capital assets inventory records as part of the capital assets reconciliation process.