Finding Text
FINDING 2024-002
Subject: COVID-19 - Education Stabilization Fund - Equipment and Real Property Management
Federal Agency: Department of Education
Federal Program: COVID-19 - Education Stabilization Fund
Assistance Listings Number: 84.425U
Federal Award Number or Year (or Other Identifying Number): S425U210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Equipment and Real Property Management
Audit Findings: Material Weakness, Other Matters
Condition and Context
A property record or capital asset listing which would 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,
and use and condition of the property is to be maintained for assets purchased that exceed the School
Corporation's capitalization threshold.
The School Corporation purchased 21 pieces of equipment totaling $218,573 during the audit
period, of which 4 were selected for testing. The 4 items selected for testing were listed on the School
Corporation's capital asset listing; however, the listing did not include the percentage of federal participation
or the use and condition of property.
INDIANA STATE BOARD OF ACCOUNTS
19
DEKALB COUNTY EASTERN COMMUNITY SCHOOL DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(Continued)
The lack of internal controls and noncompliance were systemic issues throughout the audit period.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
2 CFR 200.313(d)(1) states:
"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 FAIN), who
holds title, the acquisition date, and 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 sale price of the property."
Cause
The School Corporation was unaware of the requirements to track the percentage of federal participation
in the project costs for the federal award under which the property was acquired and the use and
condition of the property.
Effect
Without the proper implementation of an effectively designed system of internal controls, the
internal control system cannot be capable of effectively preventing, or detecting and correcting, material
noncompliance. As a result, assets added to the capital assets listing did not include all the required
elements. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions
of the federal award could result in the loss of future federal funding to the School Corporation.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that management of the School Corporation establish a proper system of
internal controls and develop policies and procedures to ensure asset records include all the necessary
information and new assets are added.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.