Finding Text
Item 2023‐002 – Equipment and Real Property Management
Education Stabilization Fund (ESF) ALN# 84.425
U.S. Department of Education
Passed through the State Department of Education
Grant period – Year ended September 30, 2023 (84.425U) (84.425D)
Criteria – Grantees should have controls in place to ensure that all capital equipment or
improvements to land, building, or equipment that were purchased with grant funds received prior
approval prior to encumbrance of the expenditure. 2 CFR 200.303 requires the non‐Federal entity
to “(a) establish and maintain effective internal controls over the Federal award that provides
reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and
the terms and conditions of the Federal award.” 2 CFR 200.313 and 2 CFR 200.439 requires that the
following rules of allow ability must apply to equipment and other capital expenditures “Capital
expenditures for special purpose equipment are allowable as direct costs, provided that items with
a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or
pass‐through entity.”
Condition – Adequate controls were not in place to ensure that prior approval for capital
expenditures for equipment acquisition or improvements to land, buildings, or equipment was
obtained prior to incurring the expenditure.
Cause – Certain Capital Equipment and improvements to building expenditures were not included
in the approved budget to grantor. There was a lack of sufficient controls over the review of capital
expenditures to ensure that they were included in the approved budget.
Effect – Lack of approval over equipment and capital improvements could lead to disallowed costs.
We noted that certain equipment and improvement projects were not included in approved budget
for ESSER Funds.
Questioned Costs – $33,716
Recommendation – We recommend the strengthening of controls to ensure that proper approval is
received prior to the acquisition of improvements to land, building or equipment.
Management’s Response – The Board will strengthen the controls in place to provide assurance
that proper approval is obtained from grantor agency prior to the purchase of equipment and real
property.