Finding Text
2023-005 U.S. Department of Education, Assistance Listing #84.425D and #84.425U, Elementary and Secondary School Emergency Relief Funds for the year July 1, 2022 through June 30, 2023
Criteria: In accordance with 2 CFR 200.313, property records for equipment and real property purchased with Federal funds must be maintained that include a description of the property, a serial number or other identification number, the source funding for the property, who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the Federal award, the location, use, and condition of the property.
Condition: The Facilities Department maintains a spreadsheet of capital assets purchased with Elementary and Secondary School Emergency Relief Funds (ESSER) funds for assets procured through the Facilities Department. The City Finance Department also maintains a capital asset listing for financial reporting purposes, however, assets funded by grant proceeds are not separately identified in the listing. In addition, during the audit, three assets funded with ESSER funds totaling $444,842 had not been capitalized in the City’s financial reporting system. The two lists are not cross checked to ensure all ESSER purchases have been identified.
Cause: There are no formal procedures for tracking Federally funded assets.
Effect: Federally funded assets are not identified and tracked. If the City were to sell a Federally funded asset, they may be required to remit some of the proceeds back to the grantor agency. Therefore, if the asset was not properly identified and tracked the City could inadvertently profit from the Federal funding.
Recommendation: It is our recommendation that procedures be established for the tracking of federally funded assets.