Finding Text
FINDING 2022-002 ? EQUIPMENT AND REAL PROPERTY MANAGEMENT (Repeat Finding of 2021-002) Significant Deficiency Federal Programs: Charter Schools ? AL 84.282; Education Stabilization Fund ? AL 84.425 Criteria 2 CFR 200.313(d) contains equipment management requirements which dictate property records entities must maintain and the need for procedures to adequately safeguard and maintain assets acquired with federal funding. Condition The Organization did not retain in their accounting records all the required information. Specifically, the federal award identification number, holder of the title, use, and condition were not listed. The federal participation was assumed based on allocations between fund codes in the general ledger. Additionally, sufficient and appropriate documentation did not exist to support a physical inventory had been completed for all assets once in the last two years. Cause and Effect As described in 2022-001, the Organization has not established a formal process related to federal awards to identify all key compliance requirements and changes in compliance requirements, evaluate risks of noncompliance with these requirements, and respond to such risks of noncompliance through establishing or changing processes and internal controls. Additionally, certain individuals, within a department, responsible for the use of federal funds or maintenance and safeguard of assets acquired with federal funds lacked knowledge of the compliance requirements pertaining to the use of the funds or the maintenance and safeguard of the acquired assets. As a result, adequate documentation was not maintained for equipment acquired with federal funds or to support the performance of a physical inventory occurring within the required time period. Recommendation We recommend the Organization develop a system of internal controls aligned with the applicable compliance requirements to properly track equipment acquisitions in the accounting records and to ensure a physical inventory is appropriately documented when completed. Views of Responsible Officials and Planned Corrective Actions The Organization?s Corrective Action Plan is included on pages 38 and 39.