Since 1999, the public schools have purchased more than $13.8 million in computers, therapeutic devices, learning-adaptive equipment and physical-therapy equipment, but have not accounted for more than $2.2 million of special-education equipment and money, the audit said.

As of December 2002, 79 schools and 31 department offices had not conducted their 2002 inventories. Lax control of computer equipment has lead both to theft and the failure to report the thefts, the audit said.

"The department's lack of adequate internal controls over special-education equipment and funds means that the public is not assured that theses assets are adequately safeguarded and that errors and fraud are promptly detected and prevented," it said.

The audit recommended the department update its inventory records, develop ways to hold employees liable for negligent loss of special-education equipment, and give schools better guidance on inventory management. It also recommended the public school system develop a new method for distributing laptop computers used by special-education teachers.

The audit said the Department of Education has agreed with the audit's findings and the need for corrective action. But department officials could not be reached for comment this morning.