Finding Text
FINDING 2024-002 – EQUIPMENT AND REAL PROPERTY MANAGEMENT
Significant Deficiency
Federal Programs: Education Stabilization Fund – Assistance Listing Number 84.425
Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding number
was 2023-002.
Criteria
2 CFR 200.313(d) contains equipment management requirements which dictate property records entities must
maintain and the need for procedures to adequately safeguard and maintain assets acquired with federal funding.
Condition
The Organization did not retain in their accounting records all the required information. Specifically, the federal
award identification number, holder of the title, use, and condition were not listed. The federal participation
was assumed based on allocations between fund codes in the general ledger. Additionally, sufficient and
appropriate documentation did not exist to support a physical inventory had been completed for all assets once
in the last two years.
Cause and Effect
As described in 2024-001, the Organization has not established a formal process related to federal awards to
identify all key compliance requirements and changes in compliance requirements, evaluate risks of
noncompliance with these requirements, and respond to such risks of noncompliance through establishing or
changing processes and internal controls. Additionally, certain individuals, within a department, responsible for
the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge
of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the
acquired assets. As a result, adequate documentation was not maintained for equipment acquired with federal
funds or to support the performance of a physical inventory occurring within the required time period.
Recommendation
We recommend the Organization develop a system of internal controls aligned with the applicable compliance
requirements to properly track equipment acquisitions in the accounting records and to ensure a physical
inventory is appropriately documented when completed.
Views of Responsible Officials and Planned Corrective Actions
The Organization’s Corrective Action Plan is included on pages 42 through 44.