1. Title I, Part A Inventory Review Guidelines 2014 GCEL Conference February 24-26, 2014 4/16/20151

2. Agenda Why do an Inventory Function of An Inventory Definitions Procedures for Inventory Management Off-site Use of Equipment Physical Inventory Equipment Use in Targeted Assistance Program Equipment Use in Private Schools Disposition Policy Loss, Damage or Theft of Equipment Common Equipment/Inventory Findings 4/16/20152

3. Why Do An Inventory Education Departments General Administrative Regulations (EDGAR) – Sections 80.20 Effective control and accountability must be maintained for all grant and sub-grant cash, real and personal property, and other assets. Grantees and sub-grantees must adequately safeguard all such property and must assure that it is used solely for authorized purpose. Such internal control provides reasonable assurance of the effectiveness and efficiency of the program, reliability of reporting and compliance with applicable laws and regulations. 4/16/20153

4. Why Do An Inventory? Education Departments General Administrative Regulations (EDGAR), Section 80.32 \ Office of Management and Budget (OMB) guidance (Circular A-87) – States that LEAs shall provide: “effective control over and accountability for all funds, property, and other assets. Recipients shall adequately safeguard all assets and assure they are used solely for authorized purposes”. – Provides detailed information on requirements of maintaining an inventory. 4/16/20154

5. Why Do An Inventory General Education Provisions Act (GEPA) Section 443(a) requires each recipient of federal funds to keep records which fully disclose the amount and disposition of the funds, the total costs of the activity for which the funds are used…and such other records as will facilitate an effective financial or programmatic audit. 4/16/20155

6. Why Do An Inventory Monitoring and Audit Requirements – EDGAR 80.40 LEAs receiving federal funds are responsible for managing the day-to-day operations of the grant and its supported activities to ensure that the requirements of the grant are met. The monitoring includes the purchasing, use and disposal of property. These federal regulations also require the state educational agency (SEA) to monitor the implementation of program requirements and expenditures of federal funds. 4/16/20156

7. Why Do An Inventory Monitoring and Audit Requirements – OMB Circular A-133 Grantees that expend $500,000 or more in a year in federal awards must have a single audit or program specific audit performed for that year in accordance with the provisions of Circular A-133. 4/16/20157

8. Functions of An Inventory Serves as a needs determination to assists LEAS in determining if additional materials and supplies need to be purchased in order to implement the district’s Title I program. Surveys the property in storage to determine if it is being (a) held for disposition, (b) in the process of production for disposition, or (c) to be consumed/utilized in the implementation of the district’s Title I program. Tracks the property undergoing repair. Procedures include a process for repair and a work-in-process tracking system. Provides an inventory disposition process for the loaning and issuing of equipment, as well as the disposal process. 4/16/20158

9. Definitions Equipment: of nonexpendable, tangible personal property having a useful life of more than one year. Supplies: tangible personal property that is considered consumable items. Pilferable Items: those items that may be easily be lost or stolen. 4/16/20159

10. Procedures for Maintaining an Inventory of Equipment Acquisition of equipment Method for entering information into inventory management system On-site use of equipment Physical inventory Equipment disposition Supplies disposition Lose, damage or theft of equipment Equipment use for Title I, Part A targeted assistance programs Equipment use for private schools 4/16/201510

11. Requisition of Equipment Determine the need and use of equipment. Purchases made in accordance the Title I federal regulations. Equipment must be reasonable and necessary. Follow internal control procedures for approval and receiving of equipment. Proper labeling of equipment. Issuing equipment to proper location. 4/16/201511

12. Entry of Information into Inventory Title I director and principals of each school is responsible for inventory management. Procedures should be in place to ensure: – all equipment is properly tagged. – adequate safeguards related to loss, damage or theft. – maintenance procedures to keep equipment in good condition. – a physical inventory of equipment. 4/16/201512

13. Entry of Information into Inventory Records Inventory Records should include: – Description – Serial Number/Identification Number – Funding Source and Percentage of Source – Vendor – Acquisition Date and Unit Cost – Location and Use – Condition – Title – Disposition 4/16/201513

14. Off-Site Use of Equipment Written procedures to ensure effective tracking system for equipment used off-site. Possible Components of the procedures: – date Signed Out, – purpose of Use, – person Responsible, and – condition of Equipment Upon Return. 4/16/201514

15. Physical Inventory Physical Inventory shall be taken and results reconciled at least once every two years. Purpose of physical inventory is to verify – the existence of equipment. – current utilization of equipment – is equipment being used for intended purpose. – the continued need of equipment. – the condition of the equipment. 4/16/201515

16. Physical Inventory If an LEA cannot locate an item purchased with federal funds, it is difficult to demonstrate the item was necessary for the performance or administration of the grant, reasonable, or benefitted the program that paid for the item. 4/16/201516

17. Equipment Use in Targeted Assistance Programs Equipment purchase for TA program must be reasonable and necessary to implement a properly designed program for Title I, Part A participants. – Used with targeted assistance students, based on needs assessment. 4/16/201517

18. Equipment Use in Targeted Assistance Programs If used on a less than full-time basis the equipment could be made available for other educational uses without interfering with its use in the Title I, Part A program. Equipment could be used on other projects or programs currently or previously supported by the Federal Government, “providing such use will not interfere with the work on the projects or programs for which it was originally acquired.” 4/16/201518

19. Equipment Use in Targeted Assistance Programs The standards will have been presumed to be met and the use of Title I, Part A equipment in non-Title I, Part A activities is proper if use does not exceed 10 percent of the time the equipment is used in Title I, Part A activities. 4/16/201519

20. Equipment Use for Participating Private Schools Section 1120(d)(1) of the ESEA requires that the control of the Title I funds, and the ownership of the materials and equipment, purchased with Title I funds for private schools shall be in the LEA, and the LEA shall administer the funds, materials, equipment and property. This is an LEA responsibility rather than the responsibility of the private school. 20

21. Equipment Use for Participating Private Schools District officials will: complete the requisitions forms for ordering materials and/or equipment. have the materials and equipment delivered to the LEA. sign for the delivery of the materials and/or equipment. label the equipment as Title I to include the fiscal year of purchase and property of the respective school district. 21

22. Equipment Use for Participating Private Schools District officials will: deliver the materials and/or equipment to the private school. store materials and equipment in a secure location when not in use. maintain an inventory of all materials, equipment, and property purchased with Title I funds for use with eligible Title I students at private schools. The inventory shall contain the same requirements for any equipment purchased with Title I, Part A funds. 22

23. Equipment Use for Participating Private Schools Inventory must be updated as equipment items are purged or new purchases are made. Equipment items purchased with federal funds are to be identified and physically marked as such. Adequate safeguards must be in place related to the loss, damage, or theft of the equipment. Any loss, damage, or theft should be investigated and fully documented. Adequate maintenance procedures should be implemented to keep the equipment in good condition. A physical inventory of equipment items must be taken and the results reconciled with the inventory records at least once every two years. 23

24. Disposition of Equipment Establish accounting for lifecycle of goods (Depreciation Methodology). When original or replacement equipment acquired with federal funds is no longer needed for the original project or program, the equipment may be retained, sold or disposed, if it is not needed in any other Title I, Part A like or federally funded project or program. 4/16/201524

25. Disposition of Equipment Procedures to eliminate any equipment item from the inventory 1.Equipment items with an acquisition cost/current per unit fair market (explanation is provided in Definitions section) value of less than $5,000 and are more than three years old may be retained, sold or disposed, with no further obligation to the GaDOE. The disposition of such items should be so noted on the equipment inventory maintained by the LEA. 4/16/201525

26. Disposition of Equipment Procedures to eliminate any equipment item from the inventory, continued 2. Equipment items with an acquisition cost of $5,000 or more may be retained or sold and the awarding agency (GaDOE) shall have a right to amount calculated by multiplying the current market value or proceeds from sale by the awarding agency (GaDOE’s) share of the equipment. 4/16/201526

27. Disposition of Equipment Procedures to eliminate any equipment item from the inventory, continued a. If the current per unit fair market value is $5,000 or more, the equipment may be retained or sold and the awarding agency(GaDOE) shall have a right to an amount calculated by multiplying the current market value or proceeds from the sale by the State’s share of the equipment. The entity is permitted to deduct and retain from the State’s share $500 or 10 percent of the sales proceeds, whichever is less, for the entity’s selling and handling expenses. 4/16/201527

28. Disposition of Equipment Procedures to eliminate any equipment item from the inventory, continued b. Forward a check made payable to the Georgia Department of Education in the amount of the State’s share. The amount is then returned to the State’s Title I LEA allocations fund. c.The disposition of such items should be so noted on the equipment inventory maintained by the recipient. The recipient should include the date of disposal and sales price or the method used to determine current fair market value if the recipient compensates the State. 4/16/201528

29. Disposition of Supplies Procedures in place for disposition of supplies if there is a residual inventory of unused supplies that: – exceeds $5000 fair market value. – are not needed for any other federally sponsored program. 4/16/201529

30. Loss, Damage or Theft of Equipment Control system for adequate safeguards to prevent loss, damage, or theft – Process for investigation of any loss, damage or theft. – Indicate the proper documentation needed to notify and report loss, damage or theft. Types of Controls – Locks or security camera (for particularly valuable or vulnerable items). – Access controls to warehouses to limit entry by unauthorized personnel. – Use of logs or sign-in sheets for certain items of property; for example iPads, laptops, cameras, projectors. – Procedures for promptly entering items received into the inventory management system. 4/16/201530

31. Monitoring Considerations Is equipment purchased allowable for Title I purchase? Is equipment purchased reasonable and necessary? What accountability in is place for purchasing equipment and keeping an inventory? 4/16/201531

32. Monitoring Considerations Does the equipment policy/procedures address the following: – Definition of equipment – Purchasing procedures – Use of equipment – Maintenance of equipment and inventory – Physical inventory – Safeguard of inventory – Disposal of Equipment 4/16/201532

33. Monitoring of Equipment Common Findings – Inability to account for property and equipment – Failure to maintain an equipment inventory – Lack of sufficient documentation to support purchases – Insufficient, outdated or no inventory management procedures – No physical inventory conducted – Alternate use of equipment – Instances of fraud, waste and abuse 4/16/201533

34. Title I Program Specialist Contact Information AreaNameOffice TelephoneEmail 1Robyn Planchard(404) 463-3467rplanchard@doe.k12.ga.us 2Randy Phillips(770) 334-8390rphillips@doe.k12.ga.us 3Anthony Threat(706) 615-0367athreat@doe.k12.ga.us 4Evelyn Maddox(404) 656-2045emaddox@doe.k12.ga.us 5Judy Alger(229) 838-6037julager@doe.k12.ga.us 6Grace McElveen(912) 334-0802gmcelveen@doe.k12.ga.us 7Jimmy Everson(229) 723-2664jeverson@doe.k12.ga.us 8Marijo Pitts-Sheffield(912) 269-1216mpitts@doe.k12.ga.us 9Kathy Pruett(706) 540-8959kpruett@doe.k12.ga.us 10Elaine Dawsey(478) 971-0114edawsey@doe.k12.ga.us 11Olufunke Osunkoya(678) 704-3557oosunkoya@doe.k12.ga.us 12Bobby Trawick(229) 246-1976btrawick@doe.k12.ga.us

35. CONTACT INFORMATION Grace McElveen Georgia Department of Education Title I Education Program Specialist gmcelveen@doe.k12.ga.us (912) 334-0802 Elaine Dawsey Georgia Department of Education Title I Education Program Specialist edawsey@doe.k12.ga.us (478) 971-0114