Finding 396239 (2023-002)

Finding Number: 2023-002 AL Number and Title: Education Stabilization Fund – AL# 84.425 Federal Award Identification Number / Year: 2023 Federal Agency: U.S. Department of Education Compliance Requirement: Equipment and Real Property Management Pass-Through Entity: Ohio Department of Education Repeat Finding from Prior Audit? No Noncompliance and Material Weakness 2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.313(d) which requires that: Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: 1. 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), who holds title, the acquisition date, 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. 3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. 4. Adequate maintenance procedures must be developed to keep the property in good condition. 5. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. The School District purchased 6 buses at a total amount of $643,208 with funds from the ARP ESSER grant and due to deficiencies in inventory controls, failed to add the assets to the District inventory system. The lack of maintaining the required property records not only violates federal grant requirements but also increases the risk of noncompliance with grant requirements going undetected in a timely manner. The School District should review the Equipment Inventory System and make the proper adjustments to include all assets purchased with ARP ESSER Funds. Officials’ Response: See corrective action plan.