Finding Text
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE AND MATERIAL NONCOMPLIANCE ? U.S. DEPARTMENT OF EDUCATION ? PASSED THROUGH MINNESOTA DEPARTMENT OF EDUCATION, COVID-19 ? EDUCATION STABILIZATION FUND, FEDERAL ALN 84.425 2022-002 Internal Control Over Compliance and Material Noncompliance With Equipment and Real Property Management Requirements Criteria ? 2 CFR ? 200.313 (c)(1) and (d)(1) requires that Aurora Charter School (the School) obtain approval from the federal funding agency or pass-through agency prior to the purchase of equipment with federal funding. Condition ? During our audit, we noted the School did not have sufficient controls in place within the Education Stabilization Fund federal program to assure compliance with federal equipment and real property management requirements, resulting in material noncompliance. Questioned Costs ? None. Context ? The School did not obtain approval from the federal funding agency or pass through agency prior to purchasing equipment with a total value of $208,443 using federal funds. Repeat Finding ? This is a current year finding. Cause ? This condition was due to a misunderstanding of the individual item value, which federally funded equipment purchases were required to be preapproved and tracked. Effect ? Noncompliance with the equipment and real property management could be viewed as a violation of the award agreement and result in loss of funds. Recommendation ? We recommend that the School review its internal control procedures to ensure future compliance with the federal compliance requirements specific to equipment and real property management for the COVID-19 ? Education Stabilization Fund federal program. View of Responsible Official and Planned Corrective Actions ? The School agrees with the finding. The School intends to revise its internal capitalization threshold to align with the federal threshold, and to review its other control procedures relating to equipment and real property management requirements to ensure compliance for future federal awards expenditures. The School has separately issued a Corrective Action Plan related to this finding.