Finding Text
U.S. Department of Education – Passed-through the NYS Education Department - Education Stabilization Fund
COVID-19 – Elementary and Secondary School Emergency Relief (ESSER) Fund; ALN 84.425D; Project #5891-21-2955; Grant Period – Fiscal Year Ended June 30, 2023
COVID-19 – American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP-ESSER) Fund; ALN 84.425U; Project #’s 5880-21-2955, 5884-21-2955, 5883-21-2955, 5882-21-2955; Grant Period – Fiscal Year Ended June 30, 2023
Significant Deficiency
Compliance Requirement: Equipment/Real Property Management
Criteria: The District did not adhere to the capitalization threshold requirements outlined in the Uniform Guidance (2 CFR 200.1) for the capitalization of assets. In addition, 2 CFR section 200.313(d)(1), requires an entity to retain detailed records such as a description of the property/equipment, a serial number or identification number, the source of funding (including the federal award identification number), who holds title, acquisition date, cost of the property/equipment, percentage of federal participation in the project costs for the federal award under which the property/equipment was acquired, the location, use and condition of the property/equipment, and ultimate disposition data. A physical inventory of the property and equipment must be taken, and the results reconciled with the property records at least once every two years.
Condition: The District applied an incorrect capitalization threshold over federal expenditures, resulting in the misclassification of assets.
Cause: The District did not utilize the lower of the two capitalization thresholds noted in the Districts policies. Capitalizable equipment purchased with federal funds was not properly captured at year end.
Effect: The District did not capitalize expenditures that exceeded the District’s stated capitalization threshold. As such, the District did not comply with Equipment and Real Property compliance requirements in accordance with Uniform Guidance.
Questioned Costs: None.
Recommendation: We recommend the District review and update its policies and procedures related to capitalization thresholds. This includes ensuring that the correct threshold is applied consistently across all asset categories. We also recommend the District update their fixed asset records to include required information for capital equipment purchased with federal awards. A system of communication and review process should be implemented to ensure completeness and compliance with Uniform Guidance equipment and real property requirements.
District’s Response: The District’s response is included in their corrective plan.