Finding 977797 (2023-001)

MATERIAL WEAKNESS U.S. DEPARTMENT OF EDUCATION PASSED THROUGH ARKANSAS DEPARTMENT OF EDUCATION COVID-19 - EDUCATION STABILIZATION FUND - AL NUMBER 84.425D and 84.425U PASS-THROUGH NUMBER 4801 AUDIT PERIOD - YEAR ENDED JUNE 30, 2023 2023-001. Equipment and Real Property Management Criteria or specific requirement: Property records should be maintained for equipment acquired with federal awards as specified in OMB 2 CFR section 200.313. Additionally, the District should ensure that disposition of such equipment is in accordance with federal requirements, including the federal awarding agency is appropriately compensated for its share of any property sold or converted to non-federal use. Condition: A review of the equipment subsidiary ledger revealed that no equipment items purchased with Education Stabilization Funds in fiscal year 2023, were added to the ledger. The total cost of the equipment was $640,899. Also, the District could not account for 1 of 4 Education Stabilization Fund equipment items selected for sighting, costing $1,177. Cause: Lack of internal controls over the equipment subsidiary ledger. Effect or potential effect: The District's equipment subsidiary records did not include any equipment items purchased in fiscal year 2023. Context: All equipment items purchased in fiscal year 2023, were not added to the equipment subsidiary ledger for a total cost of $640,899. Also, 4 equipment items ($4,709) from a total of 40 equipment items ($47,094) that were included on the equipment subsidiary ledger were selected for observation. The sample was statistically valid. Identification as a repeat finding: No Recommendation: The District should contact the Arkansas Division of Elementary and Secondary Education (DESE) for guidance regarding this matter and implement proper controls over program expenditures. In addition, the District should maintain proper records for equipment acquired with federal awards. Views of responsible officials: The Superintendent will work with the business manager and the technology coordinator to identify all items purchased with a cost greater than $1,000 that need to be properly recorded in the district's equipment subsidiary ledger. Items that are being retired will be approved by the board and removed from the ledger. The modular buildings will be added immediately to the fixed asset list as well as the 10 Dell laptops. The laptop that the teacher lost will be removed from the fixed asset list and moving forward, all staff will complete an equipment incident form when equipment is lost or stolen. A police report will be filed for all stolen equipment.