Finding 519638 (2024-004)

Material Weakness
Requirement
F
Questioned Costs
-
Year
2024
Accepted
2025-01-17
Audit: 338734
Organization: Upland Unified School District (CA)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The District failed to conduct a required physical inventory of federally funded property within the last two years.
  • Impacted Requirements: This noncompliance violates Title 2, Code of Federal Regulations, Part 200.313(d)(2), which mandates biennial inventory checks.
  • Recommended Follow-Up: The District should establish internal controls to ensure timely physical inventories are conducted every two years.

Finding Text

50000 – COVID-19 - Education Stabilization Fund – Equipment/Real Property Management (Material Weakness in Internal Control Over Compliance, Material Noncompliance) Federal Agency: U.S. Department of Education Pass-Through Entity: California Department of Education Program Name: COVID-19 - Education Stabilization Fund Federal Financial Assistance Listing: 84.425U Compliance Requirements: F – Equipment/Real Property Management Type of Finding: Material Weakness and Material Noncompliance Criteria or Specific Requirements Title 2, Code of Federal Regulations, Part 200.313(d)(2) requires that a physical inventory of federally funded property be conducted at least every two years. The results of the inventory must be reconciled with the property records. Condition The District’s last physical inventory of federally funded property did not take place within the last two years. Cause The cause appears to be due to delays in the District arranging for a physical inventory. Effect The District is not in compliance with the provisions of Title 2, Code of Federal Regulations, Part 200.313(d)(2). Questioned Costs None reported. Context/Sampling The condition was identified through inquiry with District personnel and through review of available District records related to physical inventory of equipment. Repeat Finding No. Recommendation The District should implement internal controls to ensure that physical inventories are performed at least every two years.

Corrective Action Plan

The following corrective measures will be implemented to ensure compliance with Title 2, Code of Federal Regulations, Part 200.313(d)(2), as well as Board Policy 3270 Management of District Assets and Administrative Regulation 3440 Inventories: 1. Procedure: a. The District defines a Fixed Asset as any tangible asset purchased for a school/department in the day-to-day operation of the District from which an economic benefit will be derived over a period greater than one year and has a value of $500 or more (Education Code 35168). The District capitalizes assets valued at $5,000 or above and tracks all assets over $500. b. Every every two years, the Business Services Department will provide an inventory count sheet to each school site and department. The count sheets will contain the equipment for each room. Sites shall designate staff to perform a physical count as follows: i. In performing a physical inventory, sites and departments will check every room, closet, locked cabinet, and open area, including items checked out to staff members. ii. When the site completes the physical inventory, the inventory report will be returned to the purchasing department with the signature of the site or department administrator and the names of the staff members who performed the inventory check. c. When the Purchasing Department receives the inventory listing from the site, the items will be checked for accuracy. If there are any discrepancies between the site's inventory and the master listing held in purchasing, the Purchasing Department will perform a physical inventory at the site to locate items. Once purchasing has completed its inventory check, the master list will be updated in the Fixed Assets Module. d. A form will be completed by sites and departments for assets that are transferred from one location to another, retired, etc., and submitted to the Purchasing Department for proper recording of the location change or retirement of an asset. 2. Warehouse Procedures: a. All electronic assets ($100 or greater), as well as all other items purchased with state and/or federal funds that have a useful life of more than one year with a value of $500 or greater (Education Code 35168) are to be asset tagged once received by the warehouse. b. Asset tag procedure: The Warehouse will tag and record all asset-tagged items into the Master Asset Tag form. The following information will be added to the completed form: i. Item type/description ii. Model/name iii. Serial number or other identification number iv. Title holder v. Funding source vi. Acquisition date vii. Cost viii. Percentage of federal participation in the cost of the property ix. Location x. Current condition (fair, good, poor) xi. Transfer, replacement or disposition of obsolete or unusable equipment c. Timelines: From the 1st to the 15th of February 2025, repeated every two years.

Categories

Equipment & Real Property Management

Other Findings in this Audit

  • 519633 2024-003
    Material Weakness
  • 519634 2024-003
    Material Weakness
  • 519635 2024-003
    Material Weakness
  • 519636 2024-005
    Material Weakness
  • 519637 2024-005
    Material Weakness
  • 519639 2024-004
    Material Weakness
  • 519640 2024-004
    Material Weakness
  • 1096075 2024-003
    Material Weakness
  • 1096076 2024-003
    Material Weakness
  • 1096077 2024-003
    Material Weakness
  • 1096078 2024-005
    Material Weakness
  • 1096079 2024-005
    Material Weakness
  • 1096080 2024-004
    Material Weakness
  • 1096081 2024-004
    Material Weakness
  • 1096082 2024-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.027 Special Education Grants to States $2.35M
10.553 School Breakfast Program $835,603
10.555 National School Lunch Program $315,013
84.367 Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) $232,768
84.424 Student Support and Academic Enrichment Program $190,081
84.010 Title I Grants to Local Educational Agencies $116,697
84.048 Career and Technical Education -- Basic Grants to States $86,340
10.558 Child and Adult Care Food Program $48,390
84.425 Education Stabilization Fund $42,553
84.365 English Language Acquisition State Grants $17,937
84.002 Adult Education - Basic Grants to States $8,340