Finding Text
2022-002 Improve Controls Over Equipment (Significant Deficiency)
Federal Agency: Department of Education
Cluster/Program: Special Education Cluster
AL Number(s): 84.027/84.173
Award Year: 2022
Compliance Requirement: Equipment/Real Property Management
Type of Finding
Compliance and Internal Control over Compliance – Significant Deficiency
Criteria or Specific Requirement
Uniform Guidance, 2 CFR part 200.313(c) requires that a physical inventory of equipment shall be taken at least once every two years and be reconciled to the equipment records.
Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.
Condition and Context
The School Department did not perform a physical inventory of equipment within the last two years.
Cause
The School Department does not have adequate controls in place over equipment management.
Effect or Potential Effect
Due to the weakness in internal control noted above, there is a risk that equipment could be misappropriated or lost. Known questioned costs were not identified as this is a procedural requirement, where questioned costs are not quantifiable.
Identification as Repeat Finding
As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-003.
Recommendation
The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that equipment charged to federal awards is not misappropriated or lost. The School Department should perform a physical inventory of equipment at least once every two years.
Views of Responsible Official and Planned Corrective Action
Management’s views and corrective action plan is included in a separate corrective action plan.