FINDING 2024-001
Subject: Airport Improvement Program, Infrastructure Investment and Jobs Act Programs,
and COVID-19 Airports Programs - Equipment and Real Property Management
Federal Agency: Department of Transportation
Federal Program: Airport Improvement Program, Infrastructure Investment and
Jobs Act Programs, and COVID-19 Airports Programs
Assistance Listings Number: 20.106
Federal Award Number and Year (or Other Identifying Number): 3-18-0047-033-2024
Compliance Requirement: Equipment and Real Property Management
Audit Findings: Material Weakness, Modified Opinion
Condition and Context
Detailed property records are to be maintained when equipment having a useful life of more than
one year and a per-unit acquisition cost which equals or exceeds $5,000 is purchased with federal awards.
The property records should contain the equipment description (including serial number or other
identification number), 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, location, use and condition of the
property, and any ultimate disposition data including the date of disposal and sales price of the property.
One piece of equipment was purchased with Airport Improvement Program funds totaling
$216,250. However, the equipment was not included in the Authority's property records (capital asset
listing), nor did the records contain all the required information listed above.
In addition, the Authority did not perform a complete physical inventory within the last two years as
required.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
2 CFR 200.313(d) states in part:
"Management requirements. Procedures for managing equipment (including replacement
equipment), whether acquired in whole or in part under a Federal award, until disposition takes
place will, as a minimum, meet the following requirements: (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. . . ."
Cause
Internal controls were not designed to ensure compliance with equipment management requirements
as the Authority was unaware of the procedures needed.
Effect
Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of
the federal award could result in the loss of federal funding to the Authority.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the Authority's management strengthen its system of internal controls to
ensure compliance with equipment management requirements.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-001
Subject: Airport Improvement Program, Infrastructure Investment and Jobs Act Programs,
and COVID-19 Airports Programs - Equipment and Real Property Management
Federal Agency: Department of Transportation
Federal Program: Airport Improvement Program, Infrastructure Investment and
Jobs Act Programs, and COVID-19 Airports Programs
Assistance Listings Number: 20.106
Federal Award Number and Year (or Other Identifying Number): 3-18-0047-033-2024
Compliance Requirement: Equipment and Real Property Management
Audit Findings: Material Weakness, Modified Opinion
Condition and Context
Detailed property records are to be maintained when equipment having a useful life of more than
one year and a per-unit acquisition cost which equals or exceeds $5,000 is purchased with federal awards.
The property records should contain the equipment description (including serial number or other
identification number), 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, location, use and condition of the
property, and any ultimate disposition data including the date of disposal and sales price of the property.
One piece of equipment was purchased with Airport Improvement Program funds totaling
$216,250. However, the equipment was not included in the Authority's property records (capital asset
listing), nor did the records contain all the required information listed above.
In addition, the Authority did not perform a complete physical inventory within the last two years as
required.
Criteria
2 CFR 200.303 states in part:
"The non-Federal entity must:
(a) Establish and maintain effective internal control over the Federal award that provides
reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal
award. These internal controls should be in compliance with guidance in 'Standards for
Internal Control in the Federal Government' issued by the Comptroller General of the
United States or the 'Internal Control Integrated Framework', issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). . . ."
2 CFR 200.313(d) states in part:
"Management requirements. Procedures for managing equipment (including replacement
equipment), whether acquired in whole or in part under a Federal award, until disposition takes
place will, as a minimum, meet the following requirements: (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. . . ."
Cause
Internal controls were not designed to ensure compliance with equipment management requirements
as the Authority was unaware of the procedures needed.
Effect
Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of
the federal award could result in the loss of federal funding to the Authority.
Questioned Costs
There were no questioned costs identified.
Recommendation
We recommended that the Authority's management strengthen its system of internal controls to
ensure compliance with equipment management requirements.
Views of Responsible Officials
For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.