Finding Text
2023 – 004 – Equipment and Real Property Management
Federal Agency: U.S. Department of Education
Federal Program Name: Education Stabilization Fund
Assistance Listing Number: 84.425
Pass-Through Agency: Arizona Department of Education
Pass-Through Number(s): All Pass-Though Numbers Present in the SEFA
Award Period: March 2020 through September 2024
Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample.
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of Subpart D – Property Standards including retaining audit evidence to support the physical inventory taken at the minimum of every two years. Additionally Per 2 CFR 200.303 (a) the District must establish and maintain effective internal control over the Federal ward that provides reasonable assurance that it is managing the federal award in compliance with federal status, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in the “internal Control integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition/Context: We were unable to obtain evidence of the physical inventory of property taken as required by the Uniform Guidance.
Questioned costs: None
Cause: Due to the change in management and timing of prior year finding, the District failed to perform the inventory within the fiscal year under audit.
Effect: Failure to retain adequate records can cause the District to be out of compliance with 2 CFR Part 200.
Repeat finding: Yes
Recommendation: We recommend the District to design controls to ensure a physical inventory of property be taken and the results reconciled with the property records at least every two years.
Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan.