Finding 39232 (2022-001)

Material Weakness
Requirement
F
Questioned Costs
-
Year
2022
Accepted
2022-12-12

AI Summary

  • Core Issue: The District made building improvements over the capital expenditure threshold without prior approval from the Pennsylvania Department of Education.
  • Impacted Requirements: Non-compliance with 2 CFR part 200, section 439, and failure to maintain required property records as per section 313(d)(1).
  • Recommended Follow-up: Implement procedures for obtaining prior approval for all capital expenditures and ensure detailed property records are maintained for tracking equipment purchased with grant funds.

Finding Text

2022-001 Equipment and Real Property Management Education Stabilization Fund (ESSER) ? ALN 84.425 Criteria: Pursuant to 2 CFR part 200 section 439, capital expenditures for equipment and other capital expenditures are allowable as direct costs, provided that items with a unit cost of the lessor of $5,000 or the entity?s capitalization threshold have the prior written approval of the Federal awarding agency or pass-through entity. Furthermore, section 313(d)(1) specifies that property records must be maintained that include a description of the property, a serial or identification number, the source of funding for the property, who holds title, the acquisition date, and cost of the property. Condition: During testing it was noted the District performed building improvements over the capitalization threshold using ESSER funds without receiving prior approval from the Pennsylvania Department of Education. This asset also not included in the District?s property records. Cause: Due to staff oversight, the District did not consider all capital expenditures when obtaining prior approval from the Pennsylvania Department of Education. Effect: Internal controls are not functioning as designed and the District is not in compliance with equipment and real property management requirements of the program. Questioned Costs: None Recommendation: The District should establish procedures to ensure all capital expenditures with grant funding is appropriately approved prior to purchase and property records are maintained in sufficient detail to allow for the adequate tracking of all equipment purchased with grant funds. Management?s Response: There was confusion on the District?s part of what the threshold was for Capital Expenditures. Often times grants filing dates were due prior to all instructions being received. While the District unintentionally did not seek prior written approval for this purchase, it did clearly identify this purchase in the budget overview section in the E-Grant application for which it was approved. The District will subsequently identify and correctly maintain these assets to comply with federal property records. Now that the District is fully aware of the capital expenditure threshold, this should not occur again.

Corrective Action Plan

Finding 2022-001: Equipment and Real Property Management Contact Person: Anthony Demalis, Business Manager Recommendation: The District should establish procedures to ensure all capital expenditures with grant funding is appropriately approved prior to purchase all property records are maintained in sufficient detail to allow for adequate tracking of all equipment purchased with grant funds. Action: The District will update procedures to ensure the correct capital expenditure threshold is used when purchasing equipment with federal grant funds and will subsequently adapt property records to ensure assets are maintained in sufficient detail to comply with federal property records. Date for Completion: June 30, 2023

Categories

Equipment & Real Property Management Internal Control / Segregation of Duties Procurement, Suspension & Debarment

Other Findings in this Audit

  • 39233 2022-002
    Material Weakness
  • 39234 2022-001
    Material Weakness
  • 39235 2022-002
    Material Weakness
  • 39236 2022-001
    Material Weakness
  • 39237 2022-002
    Material Weakness
  • 39238 2022-001
    Material Weakness
  • 39239 2022-002
    Material Weakness
  • 39240 2022-001
    Material Weakness
  • 39241 2022-002
    Material Weakness
  • 39242 2022-001
    Material Weakness
  • 39243 2022-002
    Material Weakness
  • 39244 2022-001
    Material Weakness
  • 39245 2022-002
    Material Weakness
  • 39246 2022-001
    Material Weakness
  • 39247 2022-002
    Material Weakness
  • 39248 2022-001
    Material Weakness
  • 39249 2022-002
    Material Weakness
  • 615674 2022-001
    Material Weakness
  • 615675 2022-002
    Material Weakness
  • 615676 2022-001
    Material Weakness
  • 615677 2022-002
    Material Weakness
  • 615678 2022-001
    Material Weakness
  • 615679 2022-002
    Material Weakness
  • 615680 2022-001
    Material Weakness
  • 615681 2022-002
    Material Weakness
  • 615682 2022-001
    Material Weakness
  • 615683 2022-002
    Material Weakness
  • 615684 2022-001
    Material Weakness
  • 615685 2022-002
    Material Weakness
  • 615686 2022-001
    Material Weakness
  • 615687 2022-002
    Material Weakness
  • 615688 2022-001
    Material Weakness
  • 615689 2022-002
    Material Weakness
  • 615690 2022-001
    Material Weakness
  • 615691 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.010 Title I Grants to Local Educational Agencies $450,302
10.553 School Breakfast Program $176,585
84.027 Special Education_grants to States $155,932
84.367 Improving Teacher Quality State Grants $63,499
10.555 National School Lunch Program $57,461
10.582 Fresh Fruit and Vegetable Program $31,837
84.424 Student Support and Academic Enrichment Program $31,393
10.559 Summer Food Service Program for Children $29,845
84.358 Rural Education $25,825
84.365 English Language Acquisition State Grants $15,224
84.425 Education Stabilization Fund $7,526
10.649 Pandemic Ebt Administrative Costs $3,063
84.173 Special Education_preschool Grants $673