Finding Text
FINDING 2023-004
Information on the federal program:
Subject: Education Stabilization Fund – Equipment and Real Property Management
Federal Agency: Department of Education
Federal Program: COVID-19 – Education Stabilization Fund
Assistance Listing Number: 84.425C, 84.425D, 84.425U
Federal Award Numbers: S425C200018, S425D200013, S425D210013
Pass-Through Entity: Indiana Department of Education
Compliance Requirement: Equipment and Real Property Management
Audit Findings: Material Weakness
Criteria: 2 CFR 200.313(d) states in part:
"Management requirements. Procedures for managing equipment (including replacement equipment),
whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum,
meet the following requirements:
(1) Property records must be maintained that include a description of the property, a serial number or
other identification number, the source of funding for the property (including the FAIN), who holds
title, the acquisition date, and cost of the property, percentage of Federal participation in the project
costs for the Federal award under which the property was acquired, the location, use and condition
of the property, and any ultimate disposition data including the date of disposal and sale price of
the property.
(2) A physical inventory of the property must be taken and the results reconciled with the property
records
at least once every two years.
(3) A control system must be developed to ensure adequate safeguards to prevent loss, damage,
or theft
of the property. Any loss, damage, or theft must be investigated.
(4) Adequate maintenance procedures must be developed to keep the property in good condition.
. . ."
Condition: An effective internal control system was not in place at the School Corporation in order to
ensure compliance with requirements related to the grant agreement and the Equipment and Real Property
Management Requirements compliance requirements.
Cause: The School Corporation's management had not developed a system of internal controls to ensure
compliance with the compliance requirements listed above.
Effect: The failure to establish an effective internal control system placed the School Corporation at risk of
noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties
within an internal control system could have also allowed noncompliance with the compliance requirements
and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight,
reviews, and approvals over the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: In our testing of one equipment selection, we noted the School Corporation did not add the capital
asset to the capital asset listing.
Identification as a repeat finding: No.
Recommendation: We recommended that the School Corporation's management establish a system of
internal controls related to the grant agreement and Equipment and Real Property Management compliance
requirements.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding
and has prepared a corrective action plan