Finding Text
Finding: The District did not comply with Federal regulations by maintaining inventory records to identify the location of 333 laptops, resulting in ECF program questioned costs of $132,527. Criteria: Title 47, Section 54.1715, Code of Federal Regulations (CFR), requires equipment inventory records to identify the equipment type (e.g., laptop), make, and serial number; the school personnel responsible for that equipment or the person to whom the equipment was provided; and the dates the equipment was in service or dates the equipment was loaned out and returned to the school or when the equipment was missing, lost, or damaged. Condition: During the 2021-22 fiscal year, the District expended ECF program funds totaling $1,509,241.66 to acquire 4,597 laptops. As part of our audit, we requested for examination District inventory records to support the laptop acquisitions and the District provided records supporting 4,264 laptops. However, District personnel did not provide inventory records for, or locate, the remaining 333 laptops acquired with ECF program funds totaling $132,527. Cause: District personnel indicated that the missing inventory information was an oversight. Effect: Without effective accountability over Federal equipment, including the maintenance of appropriate inventory records, there is an increased risk that the equipment may be used for unauthorized purposes. As such, ECF program expenditures totaling $132,527 used to acquire the 333 unaccounted for laptops represent questioned costs. Recommendation: The District should locate the missing laptops and prepare and maintain appropriate inventory records for the laptops pursuant to Federal requirements. If the laptops are not located, the District should restore the questioned costs totaling $132,527 to the Federal Communications Commission and contact applicable law enforcement agencies regarding other necessary actions to help recover the laptops. District Response: The District will enhance inventory records and procedures to ensure that all property items are properly recorded in order to maintain accountability of items purchased with Federal funds. Additionally, the District will consult with the grantor agency regarding the allowability of the questioned costs.