Audit 374074

Finding #2024-001 – Equipment and Real Property Management Department of Agriculture Water and Waste Disposal Systems for Rural Communities (ALN 10.760) Criteria or specific requirement: As a recipient of this direct federal award, the Town is required to comply with mandatory compliance requirements. Per the OMB Compliance Supplement, one requirement that recipients are expected to comply with pertains to Equipment and Real Property Management, which stipulates that recipients are to maintain a detailed inventory of equipment and real property acquired with federal funds. Condition: The Town does not maintain a separate schedule identifying all equipment purchased with federal funds. Cause: The Town is not regularly subject to audits performed under the Uniform Guidance. Accordingly, the Town was unaware that a separate schedule should be maintained identifying all federally funded equipment purchases. Effect or potential effect: Controls over the maintenance of equipment acquired with federal funds are weakened. There is an increased risk that federally funded property will be disposed of, and the proceeds will be retained by the Town. Questioned costs: There are no questioned costs. Context: Per inquiry, we were informed that the Town does not maintain a separate schedule identifying all equipment purchased with federal funds. During the fiscal year ending June 30, 2024, federal funds were used towards the construction of a capital asset addition. The Town has also received federal funding in previous years to acquire equipment. Recommendation: We recommend that the Town thoroughly review federal award contracts to identify all compliance requirements that are applicable. Regarding equipment acquired with federal funds, records are to be maintained identifying the property, cost, acquisition date, source of funding including the federal award identification number, and the location of the property. Ultimately, the records will indicate the disposition data including the date of disposal and sales price of the property, as applicable. Views of Responsible Officials: Going forward, the Town of Winchester will carefully review all documents pertaining to any federal funds granted. We will also keep a record of all purchases made from federal funds by creating an inventory worksheet and submitting our capital assets. Any items sold would be logged and have complete documentation of the sale.