Audit 328509

Federal Agency - United States Department of Housing and Urban Development Federal Programs - Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii - (14.228) Federal Award Years - 2023 State Agency - Not applicable Reference - 2023-002 Capital Asset Records - Material Weakness and Noncompliance Criteria - Management is responsible for maintaining capital asset records that are accurate. Code of Federal Regulations (CFR) §200.313(d) Equipment states, at a minimum, the following must be met: 1. 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. 2. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. 3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. 4. Adequate maintenance procedures must be developed to keep the property in good condition. 5. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition - The capital asset records are insufficient as they do not include the source of funding, acquisition date, or the cost of the property as well as certain other information required by Federal regulations. Additionally, no physical inventory has occurred nor is there a control system that has been implemented over these assets. Cause - The Town has not maintained capital asset records or engaged a third party expert. Effect of Condition - The Town is not in compliance with CFR §200.313(d). Additionally, capital assets have been excluded from these financial statements. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Recommendation - We recommend the Town invest in capital asset software to maintain the capital assets and have a physical inventory performed. Questioned Costs - None. Perspective - No other material omissions were noted in the financial statements. This is an isolated issue.

Federal Agency - United States Department of Housing and Urban Development Federal Programs - Community Development Block Grants/State’s Program and Non-Entitlement Grants in Hawaii - (14.228) Federal Award Years - 2023 State Agency - Not applicable Reference - 2023-002 Capital Asset Records - Material Weakness and Noncompliance Criteria - Management is responsible for maintaining capital asset records that are accurate. Code of Federal Regulations (CFR) §200.313(d) Equipment states, at a minimum, the following must be met: 1. 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. 2. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. 3. A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. 4. Adequate maintenance procedures must be developed to keep the property in good condition. 5. If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Condition - The capital asset records are insufficient as they do not include the source of funding, acquisition date, or the cost of the property as well as certain other information required by Federal regulations. Additionally, no physical inventory has occurred nor is there a control system that has been implemented over these assets. Cause - The Town has not maintained capital asset records or engaged a third party expert. Effect of Condition - The Town is not in compliance with CFR §200.313(d). Additionally, capital assets have been excluded from these financial statements. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Recommendation - We recommend the Town invest in capital asset software to maintain the capital assets and have a physical inventory performed. Questioned Costs - None. Perspective - No other material omissions were noted in the financial statements. This is an isolated issue.