Finding Text
FINDING 2023-002 – EQUIPMENT AND REAL PROPERTY MANAGEMENT
(Repeat Finding of 2022-002)
Significant Deficiency
Federal Programs: Charter Schools – Assistance Listing Number 84.282; Education Stabilization Fund –
Assistance Listing Number 84.425
Repeat Finding: This is a repeat finding from the immediately prior audit report. The prior audit finding
number was 2022-002.
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 2023-001, 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 43 and 44.