Flagstaff Unified School District No. 1

Program: Education Stabilization Fund Federal Assistance Listing Number: 84.425D Federal Agency: U.S. Department of Education Pass-Through Agency: Arizona Department of Education Grantor Number: 21FESSII-111389-01A Questioned Costs: $-0- Type of Finding: Noncompliance (Other Matter), significant deficiency in internal control Compliance Requirement: F. Equipment/Real Property Management Condition/Context: During our review of property and equipment purchased with federal funding, one asset out of five tested, was unable to be found. Criteria: The District must follow 2 CFR sections 200.313 which requires that: 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. Cause: Management oversight. Effect: Noncompliance and internal control weakness. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the District to review its internal control procedures over property and equipment reporting to ensure assets are properly tagged, in the location identified on the corresponding listing, and a physical inventory is maintained to ensure all assets can be found. Views of Responsible Officials: The District concurs with this recommendation and will review its procedures over capital asset and property control. Contact Person: Ginger Stevens, Director of Finance and Business Services