Finding 563810 (2024-001)

U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 ELEMENTARY AND SECONDARY SCHOOL EMERGENCY RELIEF FUND - AL NUMBER 84.425D PASS-THROUGH NUMBER 4605 AUDIT PERIOD - YEAR ENDED JUNE 30, 2024 2024-001. Equipment and Real Property Management Criteria or specific requirement: Proper records should be maintained for equipment acquired with federal awards as specified in 2 CFR section 200.313. Specifically, the property records must include a serial number or other identification number. Condition: We were unable to verify 3 of 24 Education Stabilization Fund equipment items selected for sighting because serial numbers were not included in the property records, and the equipment items did not have any other identification numbers attached. The cost of the items was $4,428. Cause: Lack of internal controls over capital asset subsidiary records. Effect or potential effect: The District's capital asset subsidiary records were not accurate. Context: Observation of 24 equipment items recorded on equipment subsidiary records at an initial cost of $61,408 from a total population of 242 items at an initial cost of $1,894,302. Identification as a repeat finding: No Recommendation: The District should maintain proper records for equipment acquired with federal awards. Views of responsible officials: The district will develop written fixed/capital asset procedures that will require that all equipment over the capitalization threshold must include serial numbers in property records and be affixed with a unique asset identification tag. We will conduct a full physical inventory of equipment. As part of this process we will record serial numbers for all applicable items, affix asset tags to all untagged equipment, and record proper disposal of assets. We will provide staff training for all relevant staff on asset management procedures and responsibilities.