Finding 58434 (2022-002)

2022 ? 002 ? Equipment and Real Property Management Federal Agency: U.S. Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Arizona Department of Education Pass-Through Number(s): All Pass-Though Numbers Present in the SEFA Award Period: March 2020 through September 2024 Statistically Valid Sample: No, and not intended to be a Statistically Valid Sample. Type of Finding: Significant Deficiency in Internal Control over Compliance and noncompliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of Subpart D ? Property Standards including retaining audit evidence to support the physical inventory taken at the minimum of every two years. The District should have internal controls designed to ensure compliance with those provisions. Condition/Context: Due to the cyberattack, we were unable to obtain evidence of the physical inventory taken. The District is working in recovering the evidence supporting the physical inventory taken. Questioned costs: None. Cause: The District was a victim of a cyberattack. Effect: Failure to retain adequate records can cause the District to be out of compliance with 2 CFR Part 200. Repeat finding: No Recommendation: We recommend the District design controls to ensure historical accounting records are properly safeguarded and backed up in the event of another future cyberattack. Views of responsible officials: There is no disagreement with the audit finding. See corrective action plan.