Finding Text
2 CFR Section 3474.1 gives regulatory effect to the Department of Education for 2 CFR Section 200.313(b) through (d) which require that:(c) Equipment must be used in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by the Federal award or, when appropriate, under other Federal awards; however, the non-Federal entity must not encumber the equipment without prior approval of the Federal awarding agency. (d) 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 Federal award identification number), who holds title, the acquisition date, 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 sales 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 2 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.
3. Adequate maintenance procedures must be developed to keep the property in good condition.
4. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return.
During prior year testing, we identified certain assets acquired with federal funds that were not capitalized or recorded in any identified asset tracking system. During current year testing, we found that this omission had not been corrected.
The Academy should implement additional procedures to ensure any equipment purchased with federal funds are input into an asset tracking system. In addition, we recommend the Academy review the omitted items and add them to their inventory system to track going forward.