Finding Text
Material Weakness
Material Noncompliance
Program: Assistance Listing: 84.425D – Elementary and Secondary School Emergency Relief Fund
Assistance Listing: 84.027/84.027X/84.173/84.173X – Special Education Cluster (IDEA)
Repeat Finding: Yes
Criteria: Under 2 CFR Part 200, entities receiving federal funds must follow the stricter of regulations
between state and federal guidelines for purchasing and tracking equipment. Specifically, 2 CFR
313 requires recipients to maintain detailed property records for equipment acquired with
federal awards. These records must include descriptions, identification numbers, funding
sources, acquisition dates, costs, federal contribution percentages, locations, usage, conditions,
and disposal information. Recipients must also update these records whenever the status of the
property changes.
Specifically, the Mississippi Public School Asset Management Manual requires school districts
to maintain current inventories of property items valued at $1,000 or more. Additionally, other
items, such as cameras, camera equipment, televisions, computers and computer equipment
equal to or greater than $250, must be included in the inventory. Other equipment such as tools,
furniture and other assets regardless of their purchase price or fair market value must be
included. This also requires thorough tracking and management of school assets.
Condition: We observed that the District’s internal controls are inadequate to ensure that the District
complies with its current internal control policies and procedures for fixed assets. Specifically,
as a result of our fixed asset inventory procedures we observed the following:
Approximately $298,894.26 in equipment purchased was not included in the District’s
fixed asset system for compliance purposes as required.
Three assets selected for observation in our sample of fixed assets could not be located by
the District. Additionally, our examination of the most recent District inventory taken in
the spring of 2024 revealed that all three assets were missing at that time and personnel
responsible for conducting the inventory did not properly report the assets as lost or stolen
as required by District policy in a timely manner.
Context/
Perspective: This finding is a result of our statistically valid random sample of forty fixed assets inventory
observation for the Special Education Cluster (IDEA) performed for single audit purposes as
well as other procedures were performed by us reconciling the District’s asset listing of ESSER
II assets to the District’s financial records.
Cause: The District’s internal control system is inadequate to ensure that the District’s fixed asset
system fulfills the requirements of the current District internal control policy, “Fixed Asset
Accountability”.
Effect: Failure to follow federal and state fixed asset requirements could affect future eligibility for
federal award programs or could result in a loss or misappropriation of public assets.
Questioned Costs: None
Recommendation: We recommend the District develops and maintains an equipment listing that reflects all
required information, including a description, an identifying number, the source of funding, the
title holder, the acquisition date, the cost, the percentage of federal participation in the project
costs, the location, the use and condition, and any ultimate disposal data for each piece of
equipment and that it completes a physical inventory of equipment annually and the results is
reconciled to the equipment listing.
Views of
Responsible
Officials: The Auditee’s Corrective Action Plan lists the District’s response to the findings.