Compass Community Schools

CONDITION: The Organization did not perform a physical inventory on its equipment that was acquired under federal awards. CRITERIA: 2 CFR 200.313(d)(2) states: A physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years. CAUSE OF CONDITION: Lack of management oversight POTENTIAL EFFECT OF CONDITION: The Organization is noncompliant with compliance requirements for equipment/real property management per 2 CFR 200.313(d)(2). RECOMMENDATION: The Organization creates written policies and procedures to ensure that an annually physical inventory is performed on its federally funded equipment and property in accordance with 2 CFR 313(d)(2).

MANAGEMENT?S RESPONSE: While a physical inventory is conducted at the conclusion of each academic year (as a part of device return from students), the policy will be revised to specifically include a written/documented inventory each year.

CONDITION: The Organization?s inventory database did not include all the data for equipment that was acquired under federal awards. The database lacked the following data: a) source of the item, b) titleholder, c) acquisition date, d) cost, e) percentage of federal participation in the cost, f) use and condition, and g) disposition data (date, method of disposition). CRITERIA: 2 CFR 200.313(d)(1) states: 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. CAUSE OF CONDITION: Lack of management oversight POTENTIAL EFFECT OF CONDITION: The Organization is noncompliant with compliance requirements for equipment/real property management per 2 CFR 200.313(d)(1). RECOMMENDATION: The Organization creates written policies and procedures to ensure its equipment database includes all the data elements required by 2 CFR 200.313(d)(1).

MANAGEMENT?S RESPONSE: Per the Action Plan submitted to TDOE, Compass has already adopted a revised inventory format ? one which incorporates the required additional pieces of information requested ? and trained operational staff members on the revised format and procedure. A revised, updated inventory will be ready for TDOE review by the end of the fiscal year.

CONDITION: The Organization?s equipment policy does not address the disposal of equipment acquired under federal awards. CRITERIA: 2 CFR 200.313(e) states: When original or replacement equipment acquired under a Federal award is no longer needed for the original project or program or for other activities currently or previously supported by a Federal awarding agency, except as otherwise provided in Federal statutes, regulations, or Federal awarding agency disposition instructions, the non-Federal entity must request disposition instructions from the Federal awarding agency if required by the terms and conditions of the Federal award. Disposition of the equipment will be made as follows, in accordance with the Federal awarding agency disposition instructions: (1) Items of equipment with a current per unit fair market value of $5,000 or less may be retained, sold or otherwise disposed of with no further responsibility to the Federal awarding agency (2) Except as provided in CFR 200.312(b), or of the Federal awarding agency fails to provide requested disposition instructions within 120 days, items of equipment with a current per-unit fair market value in excess of $5,000 may be retained by the non-Federal entity or sold. The Federal awarding agency is entitled to an amount calculated by multiplying the current market value or proceeds from sale by the Federal awarding agency?s percentage of participation in the cost of the original purchase. If the equipment is sold, the Federal awarding agency may permit the non-Federal entity to deduct and retain from the Federal share $500 or ten percent of the proceeds, whichever is less, for its selling and handling expenses. (3) The non-Federal entity may transfer title to the property to the Federal Government or to an eligible third party provided that, in such cases, the non-Federal entity must be entitled to compensation for its attributable percentage of the current fair market value of the property (4) In cases where a non-Federal entity fails to take appropriate disposition actions, the Federal awarding agency may direct the non-Federal entity to take disposition actions CAUSE OF CONDITION: Lack of management oversight POTENTIAL EFFECT OF CONDITION: The Organization is noncompliant with compliance requirements for equipment/real property management per 2 CFR 200.313(e). RECOMMENDATION: The Organization creates written policies and procedures to ensure it has adequately addressed the disposition of equipment acquired under federal wards.

MANAGEMENT?S RESPONSE: Per the Action Plan submitted to TDOE, Compass has already adopted a revised inventory format ? including designations for disposition and maintenance/repair ? in consultation with our IT consulting firm, and both IT and operational staff have been trained on the new processes.