Finding Text
Finding 2023-002
SIGNIFICANT DEFICENCY
Internal Controls
Criteria: Pursuant to the Code of Federal Regulations (CFR), Title 2 Grants and Agreements, Subpart D Post Federal Award Requirements, Section 200.303 “the non-federal entity must establish and maintain effective internal control over the Federal aware 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.”
Condition: When investigating the controls related to equipment management, we became aware that the District relies on a third party to maintain records without any secondary review of its completeness. The current maintenance records does not include non-technology records and its related funding source.
Cause: The controls related to equipment maintenance for Education Stabilization Fund are non-existent.
Effect: There is no internal control related to equipment maintenance for the Education Stabilization Fund.
Recommendations: The District should have an employee compare the third party’s equipment inventory records with the financial records for completeness. An employee should also be present during the physical equipment inventory each year and maintain records of proof for its occurrence. Lastly, the current inventory records should also be altered in order to be maintained with information required by 2 CFR section 200.313(d)(2) that 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, use and condition of the property, and any ultimate disposition data of disposal and sales price of the property.
Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding. See separate document for planned corrective actions.