2023-009 – Equipment and Real Property Management (Significant Deficiency in Internal Controls over Compliance)
Recommendation: We recommend the College enhance the design of its control activities and create a tool to assist in tracking and maintaining equipment purchased with federal funds. Addit...
2023-009 – Equipment and Real Property Management (Significant Deficiency in Internal Controls over Compliance)
Recommendation: We recommend the College enhance the design of its control activities and create a tool to assist in tracking and maintaining equipment purchased with federal funds. Additionally, the employees responsible for the inventory should be trained to ensure understanding of the Uniform Guidance requirements relevant to equipment and real property management.
Action Taken: The 2022-2023 fiscal year was entirely encompassed by the separation Memorandum of Understanding (MOU) of March 2022 and then the final release settlement in December 2023.
It is important to note that Southeast New Mexico College was a newly established independent community college, having formally separated from New Mexico State University (NMSU) as of April 2022. During this transition period, many administrative processes, including federal grant compliance procedures, were in the process of being developed, transitioned, and implemented independently from NMSU systems. As a result, certain policies, procedures, and documentation processes were not yet fully established or operational at the time of the audit.
Unfortunately, due to the untimely receipt of the completed audit report, the College did not have the opportunity to review and begin addressing several of the findings until well after the end of the audit period. While the College is committed to corrective action, the delayed delivery of the audit limited the ability to implement corrective measures earlier. The College is working proactively to ensure that these issues are resolved going forward.
Corrective Action Taken / Planned:
• Policy Development and Revision
o The institution will update its property management policies and procedures to comply with 2 CFR §200.313 and §200.311. Updates will address:
Accurate and complete property records, including required data elements (description, serial number, location, use, acquisition cost, federal grant information, etc);
Biennial physical inventory procedures, including reconciliation with property records
Safeguarding and maintenance protocols
Requirements for disposition of federally funded property
• Inventory Process Implementation
o A full physical inventory of all federally funded equipment and real property will be conducted by August 31, 2025, and discrepancies will be investigated and resolved.
• Training
o All personnel responsible for managing equipment and real property will be trained on the updated policies, inventory procedures, and compliance requirements.
• Monitoring and Oversight:
o The institution will implement an internal review process to ensure ongoing compliance with equipment and real property management standards. Monitoring will include:
Periodic spot checks of property records
Documentation of follow-up on any missing or unaccounted for items
Regular reviews to ensure appropriate safeguarding and maintenance of property.
• Documentation of Federal Interest
o For any real property acquired or improved with federal funds, the institution will ensure proper recording of the federal government’s interest in accordance with federal regulations.
Due Date of Completion: August 31, 2025
Responsible Official: Carolyn Kasdorf, Vice President for Business and Finance (or appropriate official), Karla Volpi, Dean of Business and Finance, Rebecca Silva, Director of Finance, Lisa Ryan, Restricted Funds Manager, Inventory Control