Finding Text
Federal Equipment Management
Finding Number: 2023-001
Assistance Listing Number and Title: AL# 84.425C, 84.425D, 84.425U, 84.425W
COVID-19 Education Stabilization Fund
Federal Award Identification Number / Year: None / 2023
Federal Agency: United States Department of Education
Compliance Requirement: Equipment and Real Property Management
Pass-Through Entity: Ohio Department of Education and
Workforce
Repeat Finding from Prior Audit? No
Noncompliance and Material Weakness
2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.313(d)(1), which requires that property records must be maintained 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)), who holds title, 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 sales price of the property.
2 C.F.R. § 3474.1 gives regulatory effect to the Department of Education for 2 C.F.R. § 200.313(d)(2), which states, a physical inventory of the property must be performed, and the results reconciled with the property records at least once every 2 years.
Due to a failure of internal controls, the Educational Service Center's inventory listing/capital asset records for equipment acquired under the Education Stabilization Fund were not complete and accurate. We identified three equipment items purchased in fiscal year 2023 that exceeded the Educational Service Center’s federal equipment threshold of $1,000 which were not included on the listing. We also identified four separate equipment items inadvertently recorded twice on the listing, with two separate identification numbers, however there was only one of each item purchased. In addition, there was no evidence a physical inventory of the equipment acquired under the Education Stabilization Fund had been performed within the preceding two years.
The Educational Service Center should establish and implement policies and procedures to properly track equipment purchased with Federal funds in accordance with 2 C.F.R. §200.313(d). To effectively control equipment and maintain accountability over expenditures, the Educational Service Center should ensure all equipment is properly identified and recorded on their inventory and/or capital asset listing. Failure to do so could result in the Educational Service Center tracking an incorrect number and/or amount of assets, and misuse being undetected in a timely manner. Additionally, a physical inventory should be performed, at a minimum, once every two years to verify that equipment held per the inventory/capital asset listing actually exist and adequate documentation is maintained to support an inspection was performed. This will assist in detecting errors, fraud, theft, or omissions.
Officials’ Response: See Corrective Action Plan.