FINDING 2022-003 Subject: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds - Equipment and Real Property Management Federal Agency: Department of the Treasury Federal Program: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Assistance Listings Number: 21.027 Federal Award Number and Year (or Other Identifying Number): CY 2022 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Noncompliance Condition and Context State and Local Fiscal Recovery Funds (SLFRF) may be used to acquire real and personal property, supplies, and equipment. Equipment purchased with SLFRF funds requires management, among other things, to maintain property records, complete a physical inventory, safeguard against loss, and properly maintain the equipment. A property record or capital asset listing which would include a description of the property, a serial number or other identification number, the 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, the location, and use and condition of the property is to be maintained for assets purchased. The County did not maintain adequate property records for assets purchased with SLFRF award funds. A population of 23 assets, totaling $812,524, paid from SLFRF funds during the audit period was identified. A sample of 5 assets, totaling $329, 394, were selected for testing. Of the 5 assets tested, 2 were not added to the property records and 3, while added to the property records, did not have the appropriate identifying information to show the assets were purchased with federal grant funds. Assets purchased with SLFRF award funds are to be used for the originally authorized purpose as long as needed for that purpose, during which time the County must not dispose of or encumber its title or other interests. If the real property is no longer needed for the originally authorized purpose instructions from the federal awarding agency that provide for one of three alternatives are required. The alternatives include retaining title after compensating the federal awarding agency, selling the property and compensating the federal awarding agency or transferring title to the federal awarding agency or to a third-party designated/approved by the federal awarding agency. During the audit period, the County had one disposal. The disposal was a building that was originally purchased with SLFRF grant funds in 2021 for $201,631. At the time of purchase, the County did not obtain the required appraisals, as such the purchase was considered a questioned cost in the prior audit. In 2022, the County had an agreement to sell the building to a non-profit organization for $200,000. However, the County did not adhere to the agreement, nor request instruction from the federal awarding agency. Instead, the County gave the building, without approval from the federal awarding agency, to the non-profit organization. As such, the County did not follow proper protocol for the disposition of real property. The lack of internal controls and noncompliance were systemic issues throughout the audit period. 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 states in part: ". . . (d) 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 CFR 200.311 states in part: ". . . (c) Disposition. When real property is no longer needed for the originally authorized purpose, the non-Federal entity must obtain disposition instructions from the Federal awarding agency or pass-through entity. The instructions must provide for one of the following alternatives: (1) Retain title after compensating the Federal awarding agency. The amount paid to the Federal awarding agency will be computed by applying the Federal awarding agency's percentage of participation in the cost of the original purchase (and costs of any improvements) to the fair market value of the property. However, in those situations where the non-Federal entity is disposing of real property acquired or improved with a Federal award and acquiring replacement real property under the same Federal award, the net proceeds from the disposition may be used as an offset to the cost of the replacement property. (2) Sell the property and compensate the Federal awarding agency. The amount due to the Federal awarding agency will be calculated by applying the Federal awarding agency's percentage of participation in the cost of the original purchase (and cost of any improvements) to the proceeds of the sale after deduction of any actual and reasonable selling and fixing-up expenses. If the Federal award has not been closed out, the net proceeds from sale may be offset against the original cost of the property. When the non-Federal entity is directed to sell property, sales procedures must be followed that provide for competition to the extent practicable and result in the highest possible return. (3) Transfer title to the Federal awarding agency or to a third party designated/approved by the Federal awarding agency. The non-Federal entity is entitled to be paid an amount calculated by applying the non-Federal entity's percentage of participation in the purchase of the real property (and cost of any improvements) to the current fair market value of the property." Cause A proper system of internal controls was not designed by management of the County. Embedded within a properly designed and implemented internal control system should be controls consisting of policies and procedures. Policies reflect the County's management of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, not all required elements of the property record were documented for assets acquired with SLFRF award funds, nor was an asset properly disposed of. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the County. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the County establish a proper system of internal controls and develop policies and procedures to ensure property records contain all required elements and that assets are properly disposed of. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
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. Effect of Condition - The Town is not in compliance with CFR ?200.313(d). Additionally, capital assets have been excluded from these financial statements. Recommendation - We recommend the Town invest in capital asset software to maintain the capital assets and have a physical inventory performed. Management?s Response - (2) Audit Finding 2022-002 - The Town did not have accurate capital asset records. (a) Implementation Plan of Actions - The Town is looking into capital asset software and is having a physical inventory performed. (b) Implementation Date - This will be implemented for the year ended December 31, 2023. (c) Persons Responsible for Implementation - The Town Board and Supervisor of the Town of Alexander.
2022-004 Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Equipment and Real Property Management Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Facility is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. The non-Federal entity must conform with equipment and real property management procedures identified in 2 CFR 200.313 (c) through (e). Condition: Federal-funded equipment and real property is not distinguished separately from non-federal-funded equipment and real property within the Facility?s fixed asset listing. Cause: The Facility has not implemented controls over equipment and real property management to comply with federal requirements. Effect: Without established internal controls over equipment and real property management, there is an increased risk that equipment and real property could be misappropriated or the federal agency would not be notified or reimbursed if the federal funded equipment and real property was disposed. Questioned Costs: None reported. Context: A nonstatistical sample of 3 ($52,061) from a population of 13 capitalized assets ($88,913) were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Facility implement control processes to conform with the Uniform Guidance equipment and real property management requirements noted above. Views of Responsible Officials: Management agrees with the finding.
Criteria: The Uniform Guidance requires nonfederal entities that receive federal awards to establish written policies, procedures, or standards of conduct as described in the following sections: ? Equipment (2 CFR 200.313) ? General procurement standards (2 CFR 200.318) ? Competition (2 CFR 200.319) ? Methods of procurement to be followed (2 CFR 200.320) Condition: The Town did not have written policies, procedures, and standards of conduct relative to federal awards as required by the Uniform Guidance. Cause: The Town was not aware of these requirements. Effect: The Town is not in compliance with the Uniform Guidance with respect to these written policies. Recommendation: We recommend that the Town update its policies and procedures to comply with the Uniform Guidance requirements mentioned above. Management?s Response: Management agrees with the finding.
Assistance Listing Number(s): 21.027 Name of Federal Program or Cluster: Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of the Treasury Name of Pass-through Entity: The Salvation Army of Dane County Criteria or Specific Requirement: 2 CFR section 200.313(i) requires non-federal entities to maintain records sufficient to detail the history of procurement, including, but not necessarily limited to, the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: YWCA?s internal controls over review of procurement methods, rationale, and decisions, were not properly documented. Cause: Written policies and procedures for procurement did not include who was responsible, what documentation is required, and retention of the control documentation for procurement methods, rationale, and decisions. In addition, YWCA experienced turnover in the CFO position, which is responsible for reviewing and approving procurement methods, rationale, and decisions. Effect or Potential Effect: Contracts entered into may be disallowed. Repeat Finding: No. Recommendation: We recommend written policies and procedures over procurement to be established to clearly document who is responsible for reviewing, what is to be reviewed, and how and where to document the review of procurement methods, rationale, and decisions. Views of Responsible Officials: YWCA agrees with the finding and is establishing policies and procedures to provide for documentation and review of procurement methods, rationale, and decisions. This is expected to be completed by September 2023.
2022-003 - Emergency Solutions Grant - Assistance Listing No. 14.231 Significant Deficiency in Internal Control Over Compliance and Noncompliance – F. Equipment and Real Property Management Criteria: 2 CFR 200.303 includes requirements related to internal controls for federal award programs, including that the Agency must, among other things, “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 includes requirements related to maintaining records of equipment purchased at a value with equals or exceeds the lesser of the Organization’s capitalization threshold or $5,000. “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.” Condition and Context: During 2022, FSA purchased equipment of $1,236. FSA’s capitalization threshold of $1,000. FSA did not capitalize the equipment. Due to the fact that FSA did not capitalize the equipment purchased, the equipment was not appropriately tracked in accordance with Uniform Guidance. Cause and Effect: We noted a lack of internal controls surrounding the equipment and real property management process resulted in equipment not appropriately being capitalized and tracked in accordance with federal guidelines. This deficiency could also lead to noncompliance related to the disposal of equipment and real property purchased with federal funds. Recommendation: We recommend FSA implement procedures to ensure equipment and real property purchased with federal funding is appropriately capitalized and tracked. Views of Responsible Officials and Planned Corrective Actions: Family Service Association of Howard County, Inc. (FSA) acknowledges and agrees with the audit findings. We are actively working on ways to enhance our systems and improve staff training and staff transition to address the identified areas of improvement. Our goal is to ensure that we meet the highest standards. Family Service Association of Howard County Inc. (FSA) will implement procedures to ensure equipment and real property purchased with federal funding is appropriately capitalized and tracked beginning April 2024.
2022-003: Evidence of physical inspection of equipment purchased with federal funds was not maintained ? Significant deficiencyCluster: Not applicableFederal Granting Agency: Health Resources and Services Administration (?HRSA?)Award Name: COVID-19 National Bioterrorism Hospital Preparedness Program (?Bioterrorism Program?)Award #: N/AAssistance Listing #: 93.889Award Year: Fiscal year 2022Pass-through entity: North Carolina Healthcare Foundation; North Carolina Department of Health and Human Services ? Division of Health Service Regulation, Office of Emergency Medical ServicesPass-through award #: U3REP 200659; 42705; 44024Condition:As part of our testing over the equipment compliance requirements related to the Bioterrorism Program, we noted no physical inventory of equipment performed by management that was purchased with federal funds since the inception of the grants in July 2019. Management has noted that routine maintenance checks are performed periodically on all equipment, however, we were unable to obtain management?s evidence of these checks for our 25 selections. At the end of the fiscal year, there were approximately 225 pieces of equipment with a value of approximately $800,000.Criteria:2 CFR 200.313 d(2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.Cause:Management?s process and controls do not include performing a formal physical inventory of federal equipment and retaining evidence of this process at least once every two years and management was not aware of this requirement.Effect:The Company may not maintain complete and accurate property records or safeguard equipment appropriately.Recommendation:We recommend the Company create a control and revise its process surrounding physical inventories of equipment to include a requirement that the inventory is completed in accordance with the criteria noted above. Additionally, a full inventory of all equipment should be performed as soon as practical.Management?s Views and Corrective Action Plan:Management?s views and corrective action plan is included at the end of this report after the summary schedule of prior audit findings and status.
2022-003: Evidence of physical inspection of equipment purchased with federal funds was not maintained ? Significant deficiencyCluster: Not applicableFederal Granting Agency: Health Resources and Services Administration (?HRSA?)Award Name: COVID-19 National Bioterrorism Hospital Preparedness Program (?Bioterrorism Program?)Award #: N/AAssistance Listing #: 93.889Award Year: Fiscal year 2022Pass-through entity: North Carolina Healthcare Foundation; North Carolina Department of Health and Human Services ? Division of Health Service Regulation, Office of Emergency Medical ServicesPass-through award #: U3REP 200659; 42705; 44024Condition:As part of our testing over the equipment compliance requirements related to the Bioterrorism Program, we noted no physical inventory of equipment performed by management that was purchased with federal funds since the inception of the grants in July 2019. Management has noted that routine maintenance checks are performed periodically on all equipment, however, we were unable to obtain management?s evidence of these checks for our 25 selections. At the end of the fiscal year, there were approximately 225 pieces of equipment with a value of approximately $800,000.Criteria:2 CFR 200.313 d(2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.Cause:Management?s process and controls do not include performing a formal physical inventory of federal equipment and retaining evidence of this process at least once every two years and management was not aware of this requirement.Effect:The Company may not maintain complete and accurate property records or safeguard equipment appropriately.Recommendation:We recommend the Company create a control and revise its process surrounding physical inventories of equipment to include a requirement that the inventory is completed in accordance with the criteria noted above. Additionally, a full inventory of all equipment should be performed as soon as practical.Management?s Views and Corrective Action Plan:Management?s views and corrective action plan is included at the end of this report after the summary schedule of prior audit findings and status.
2022-003: Evidence of physical inspection of equipment purchased with federal funds was not maintained ? Significant deficiencyCluster: Not applicableFederal Granting Agency: Health Resources and Services Administration (?HRSA?)Award Name: COVID-19 National Bioterrorism Hospital Preparedness Program (?Bioterrorism Program?)Award #: N/AAssistance Listing #: 93.889Award Year: Fiscal year 2022Pass-through entity: North Carolina Healthcare Foundation; North Carolina Department of Health and Human Services ? Division of Health Service Regulation, Office of Emergency Medical ServicesPass-through award #: U3REP 200659; 42705; 44024Condition:As part of our testing over the equipment compliance requirements related to the Bioterrorism Program, we noted no physical inventory of equipment performed by management that was purchased with federal funds since the inception of the grants in July 2019. Management has noted that routine maintenance checks are performed periodically on all equipment, however, we were unable to obtain management?s evidence of these checks for our 25 selections. At the end of the fiscal year, there were approximately 225 pieces of equipment with a value of approximately $800,000.Criteria:2 CFR 200.313 d(2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.Cause:Management?s process and controls do not include performing a formal physical inventory of federal equipment and retaining evidence of this process at least once every two years and management was not aware of this requirement.Effect:The Company may not maintain complete and accurate property records or safeguard equipment appropriately.Recommendation:We recommend the Company create a control and revise its process surrounding physical inventories of equipment to include a requirement that the inventory is completed in accordance with the criteria noted above. Additionally, a full inventory of all equipment should be performed as soon as practical.Management?s Views and Corrective Action Plan:Management?s views and corrective action plan is included at the end of this report after the summary schedule of prior audit findings and status.
Finding 2022-011 Equipment and Real Property Management - Material Noncompliance and Material Weakness in Internal Controls Over Compliance Agency/Passthrough Grantor Department of Health and Human Services passed through the State of Alaska Department of Health and Social Services ALN and Program Name 93.323 – COVID-19-Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Award # C0621-570-BB Award Year 3/15/2021-6/30/2022 Criteria or Specific Requirement The regulations in 2 CFR 200.313(d)(1) notes equipment and real 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Condition We reviewed a sample of 6 items owned by the Municipality and noted 1 instance in which managements internal controls were not functioning as designed, and in which equipment records were not properly maintained. Cause Controls to review and track equipment and real property funded by federal awards are not properly maintained by program personnel. In addition, there is no reconciliation from the program equipment and real property lists to the general ledger detail to ensure all equipment and/or real property is being recorded and properly capitalized, if applicable. Effect or Potential Effect The Municipality was not in compliance with Equipment and Real Property requirements outlined in 2 CRF 200.313. The Municipality could be exposed to a reduction or elimination of funds by the Federal awarding agency. Questioned costs Not applicable Context For Epidemiology and Laboratory Capacity for Infectious Diseases we selected a sample of 6 items of equipment with a book value of $848,963 from a population of 41 items with a total book value of $886,733 and noted 1 exception with a book value of $843,569. The sample tested was selected using nonstatistical sampling methods and was not a statistically valid sample. Identification as a repeat finding Not a repeat finding. Recommendation We recommend an inventory is completed at least annually to compare items purchased with federal funds to counts and the values recorded in the general ledger. Views of Responsible Officials Management agrees with this finding. Staff will perform regular reconciliations for the equipment and real property listing to ensure that its accuracy is maintained.
Finding 2022-012 Equipment and Real Property Management - Noncompliance and Significant Deficiency in Internal Control Over Compliance Agency/Passthrough Grantor Department of Transportation passed through the State of Alaska Department of Transportation and Public Facilities ALN and Program Name 20.205 – Highway Planning and Construction Cluster Award # AMATS 2023, AK-26-0003-01 Award Year 2022, 2015 Criteria or Specific Requirement The regulations in 2 CFR 200.313(d) includes the following provisions: (1) equipment and real 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales 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. Condition We reviewed a sample of 4 items owned by the Municipality and noted 3 instances in which management’s internal controls were not functioning as designed, and in which equipment records were not properly maintained. Furthermore, there was no documentation of a physical inventory being performed that was subsequently reconciled to the property records. Cause Controls to review, inventory, and track equipment and real property funded by federal awards are not properly maintained by program personnel. In addition, there is no reconciliation from the program equipment and real property lists to the general ledger detail to ensure all equipment and/or real property is being recorded and properly capitalized, if applicable. Effect or Potential Effect The Municipality was not in compliance with Equipment and Real Property requirements outlined in 2 CRF 200.313. The Municipality could be exposed to a reduction or elimination of funds by the Federal awarding agency. Questioned Costs Not applicable. Context For the Highway Planning and Construction Cluster we selected a sample of 4 items of equipment with a book value of $9,382 from a population of 27 items with a total book value of $132,626 and noted 4 exceptions with a book value of $9,382. The sample tested was selected using nonstatistical sampling methods and was not a statistically valid sample. Identification as a Repeat Finding Not a repeat finding. Recommendation We recommend an inventory is completed at least annually to compare items purchased with federal funds to counts and the values recorded in the general ledger. Views of Responsible Officials Management agrees with this finding. Staff will perform regular reconciliations for the equipment and real property listing to ensure that its accuracy is maintained.
Finding 2022-012 Equipment and Real Property Management - Noncompliance and Significant Deficiency in Internal Control Over Compliance Agency/Passthrough Grantor Department of Transportation passed through the State of Alaska Department of Transportation and Public Facilities ALN and Program Name 20.205 – Highway Planning and Construction Cluster Award # AMATS 2023, AK-26-0003-01 Award Year 2022, 2015 Criteria or Specific Requirement The regulations in 2 CFR 200.313(d) includes the following provisions: (1) equipment and real 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales 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. Condition We reviewed a sample of 4 items owned by the Municipality and noted 3 instances in which management’s internal controls were not functioning as designed, and in which equipment records were not properly maintained. Furthermore, there was no documentation of a physical inventory being performed that was subsequently reconciled to the property records. Cause Controls to review, inventory, and track equipment and real property funded by federal awards are not properly maintained by program personnel. In addition, there is no reconciliation from the program equipment and real property lists to the general ledger detail to ensure all equipment and/or real property is being recorded and properly capitalized, if applicable. Effect or Potential Effect The Municipality was not in compliance with Equipment and Real Property requirements outlined in 2 CRF 200.313. The Municipality could be exposed to a reduction or elimination of funds by the Federal awarding agency. Questioned Costs Not applicable. Context For the Highway Planning and Construction Cluster we selected a sample of 4 items of equipment with a book value of $9,382 from a population of 27 items with a total book value of $132,626 and noted 4 exceptions with a book value of $9,382. The sample tested was selected using nonstatistical sampling methods and was not a statistically valid sample. Identification as a Repeat Finding Not a repeat finding. Recommendation We recommend an inventory is completed at least annually to compare items purchased with federal funds to counts and the values recorded in the general ledger. Views of Responsible Officials Management agrees with this finding. Staff will perform regular reconciliations for the equipment and real property listing to ensure that its accuracy is maintained.
Finding 2022-013 Equipment and Real Property Management - Noncompliance and Significant Deficiency in Internal Control Over Compliance Agency/Passthrough Grantor Department of Transportation passed through the State of Alaska Department of Transportation and Public Facilities, Department of Health and Human Services passed through the State of Alaska Department of Health and Social Services ALN and Program Name 20.205 – Highway Planning and Construction Cluster 93.323 – COVID-19-Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Award # 93.323 – C0621-570-BB 20.205 – AMATS 2023, AK-26-0003-01 Award Year 93.323 - 3/15/2021-6/30/2022 20.205 – 2022, 2015 Criteria or Specific Requirement The regulations in 2 CFR 200.313(d)(1) notes equipment and real property records must be maintained that include disposition data including the date of disposal and sales price of property. Condition Testing of a sample of 5 items that were disposed of during the year identified 5 instances in which management’s internal controls were not functioning as designed and equipment disposals were not properly reflected in the property records. Cause Management did not have in place sufficient controls over the disposal of equipment to ensure proper recording of disposals of equipment. Equipment records are not reviewed by individuals with necessary skills, knowledge, and experience to ensure records are updated properly. Effect or Potential Effect Anchorage was not in compliance with Equipment and Real Property requirements outlined in 2 CRF Sections 200.313. Anchorage could be exposed to a reduction or elimination of funds by the Federal awarding agency. Questioned Costs Not applicable. Context For the Highway Planning and Construction Cluster, we selected all 4 items of equipment identified as being disposed during the year which totaled $18,537 and noted 4 exceptions where assets were recorded as disposed which were still in service. For Epidemiology and Laboratory Capacity for Infectious Diseases, we selected the 1 item of equipment disposed which was $2,910 and noted 1 exception where management did not approve of the disposed equipment. Identification as a Repeat Finding Not a repeat finding. Recommendation We recommend an inventory is completed at least annually to compare items purchased with federal funds to counts and the values recorded in the general ledger. Views of Responsible Officials Management agrees with this finding will enhance controls over the review and disposal of equipment and real property and enhance supervisory reviews over this accounting function.
Finding 2022-013 Equipment and Real Property Management - Noncompliance and Significant Deficiency in Internal Control Over Compliance Agency/Passthrough Grantor Department of Transportation passed through the State of Alaska Department of Transportation and Public Facilities, Department of Health and Human Services passed through the State of Alaska Department of Health and Social Services ALN and Program Name 20.205 – Highway Planning and Construction Cluster 93.323 – COVID-19-Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Award # 93.323 – C0621-570-BB 20.205 – AMATS 2023, AK-26-0003-01 Award Year 93.323 - 3/15/2021-6/30/2022 20.205 – 2022, 2015 Criteria or Specific Requirement The regulations in 2 CFR 200.313(d)(1) notes equipment and real property records must be maintained that include disposition data including the date of disposal and sales price of property. Condition Testing of a sample of 5 items that were disposed of during the year identified 5 instances in which management’s internal controls were not functioning as designed and equipment disposals were not properly reflected in the property records. Cause Management did not have in place sufficient controls over the disposal of equipment to ensure proper recording of disposals of equipment. Equipment records are not reviewed by individuals with necessary skills, knowledge, and experience to ensure records are updated properly. Effect or Potential Effect Anchorage was not in compliance with Equipment and Real Property requirements outlined in 2 CRF Sections 200.313. Anchorage could be exposed to a reduction or elimination of funds by the Federal awarding agency. Questioned Costs Not applicable. Context For the Highway Planning and Construction Cluster, we selected all 4 items of equipment identified as being disposed during the year which totaled $18,537 and noted 4 exceptions where assets were recorded as disposed which were still in service. For Epidemiology and Laboratory Capacity for Infectious Diseases, we selected the 1 item of equipment disposed which was $2,910 and noted 1 exception where management did not approve of the disposed equipment. Identification as a Repeat Finding Not a repeat finding. Recommendation We recommend an inventory is completed at least annually to compare items purchased with federal funds to counts and the values recorded in the general ledger. Views of Responsible Officials Management agrees with this finding will enhance controls over the review and disposal of equipment and real property and enhance supervisory reviews over this accounting function.
Finding 2022-013 Equipment and Real Property Management - Noncompliance and Significant Deficiency in Internal Control Over Compliance Agency/Passthrough Grantor Department of Transportation passed through the State of Alaska Department of Transportation and Public Facilities, Department of Health and Human Services passed through the State of Alaska Department of Health and Social Services ALN and Program Name 20.205 – Highway Planning and Construction Cluster 93.323 – COVID-19-Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Award # 93.323 – C0621-570-BB 20.205 – AMATS 2023, AK-26-0003-01 Award Year 93.323 - 3/15/2021-6/30/2022 20.205 – 2022, 2015 Criteria or Specific Requirement The regulations in 2 CFR 200.313(d)(1) notes equipment and real property records must be maintained that include disposition data including the date of disposal and sales price of property. Condition Testing of a sample of 5 items that were disposed of during the year identified 5 instances in which management’s internal controls were not functioning as designed and equipment disposals were not properly reflected in the property records. Cause Management did not have in place sufficient controls over the disposal of equipment to ensure proper recording of disposals of equipment. Equipment records are not reviewed by individuals with necessary skills, knowledge, and experience to ensure records are updated properly. Effect or Potential Effect Anchorage was not in compliance with Equipment and Real Property requirements outlined in 2 CRF Sections 200.313. Anchorage could be exposed to a reduction or elimination of funds by the Federal awarding agency. Questioned Costs Not applicable. Context For the Highway Planning and Construction Cluster, we selected all 4 items of equipment identified as being disposed during the year which totaled $18,537 and noted 4 exceptions where assets were recorded as disposed which were still in service. For Epidemiology and Laboratory Capacity for Infectious Diseases, we selected the 1 item of equipment disposed which was $2,910 and noted 1 exception where management did not approve of the disposed equipment. Identification as a Repeat Finding Not a repeat finding. Recommendation We recommend an inventory is completed at least annually to compare items purchased with federal funds to counts and the values recorded in the general ledger. Views of Responsible Officials Management agrees with this finding will enhance controls over the review and disposal of equipment and real property and enhance supervisory reviews over this accounting function.
U.S. Department of Housing and Urban Development - Community Development Block Grants/ Entitlement Grants Cluster (ALN #14.218) Condition: During the audit, it was noted that the City was not conducting an inventory of equipment and real property purchased with CDBG grants funds. Criteria: The Code of Federal Regulations [2 CFR section 200.313(d)(1) and 200.313(d)(2)] requires equipment and real property records must be maintained that include a description of the property or equipment, a serial or identification number (if applicable), the source of funding, acquisition date, cost of the property or equipment, location, and condition. In addition, the Code of Federal Regulations requires that a physical inventory of equipment and real property must be taken, and the results reconciled with the records at least once every two years. Cause: The City does not have controls in place to ensure that an inventory of equipment and real property purchased with grant funds is being conducted and maintained. Effect: The City is not in compliance with the Equipment and Real Property federal requirements. Failure to comply with grant award requirements could jeopardize future funding. Questioned Costs: This finding does not result in questioned costs. Recommendations: We recommend that the City implement procedures to ensure that all federal equipment and real property requirements are followed, including maintaining an accurate and complete listing of equipment and real property purchased with grant funds and conducting an inventory on those items at least every two years. Views of Responsible Officials: Expenditures of CDBG grant funding for capital outlays on equipment and real property are readily identifiable within the City’s fixed assets module of the accounting system, including subsequent retirements of any such capital assets. The Department acknowledges related physical inventory observations to identify these assets have not been consistently performed. The Department will work to formalize such inventory procedures working off of an available assets listing generated from within the fixed assets system. The City will look to complete such process as soon as is feasibly possible.
FINDING 2022-002 Information on the federal program: Subject: Water and Waste Disposal Systems for Rural Communities – Equipment and Real Property Management Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.760 Federal Award Number: 92-02 92-03 Pass-Through Entity: N/A Compliance Requirements: Equipment and Real Property Management Audit Finding: Significant Deficiency Criteria: 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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)(1) states in part: "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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property" Condition: An effective internal control system was not in place at the City to ensure compliance with requirements related to the grant agreement and the Equipment and Real Property Management compliance requirement. Cause: Management had not established a system of internal control that would have ensured proper procedures are followed to comply with the Equipment and Real Property Management compliance requirements. Effect: The failure to establish an effective internal control system enabled noncompliance to go undetected and the proper tracking of assets acquired with federal funds was not taking place. Noncompliance with the grant agreement and the Equipment and Real Property Management compliance requirement could have resulted in the loss of federal funds to the City. Questioned Costs: There were no questioned costs identified. Context: The City did not maintain an updated asset listing that reflects the construction in process balance related to the project funded with federal funds. Identification as a repeat finding, if applicable: No Recommendation: We recommend that the City’s management establish controls related to the grant agreement and the Equipment and Real Property compliance requirement to ensure that assets being purchased with federal funds are added to the capital asset listing and all required information is maintained on the capital asset listing. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Program Information: U.S. Department of the Interior AL Number Award Number Award Period Grant Name 15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services U.S. Department of Transportation AL Number Award Number Award Period Grant Name 20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster AL Number Award Number Award Period Grant Name 20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs Criteria: Per 2 CFR § 200.303 Internal controls, 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). 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). 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 (2 CFR section 200.313(d)(3)). Condition/Context: Management has not implemented an effective internal control system. • A physical inventory was taken in 2021 but was not reconciled to the general ledger. 15.029 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. 20.205 • A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records. • 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals. • 1 of 2 equipment addition samples had no support provided. • 1 of 2 equipment addition samples did not have all required approvals. 20.509 • A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records. • 6 of 6 equipment samples including prior year equipment did not have support provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022. Effect: Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-004. Recommendation: We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Non-compliance related to Federal Awards Federal Award Information Funding Agency: U.S. Department of Defense, passed through the Air Force Research Laboratory Title: New Space New Mexico Small Satellite Manufacturing and Innovation Hub (iHub) AL #: 12.599 Award #: FA9453-21-3-1001 Compliance Requirement: Equipment and Real Property Management Award Period: 06/01/2021-05/31/2026 Questioned Costs: None Noted Condition During our testing of New Space Nexus’ fixed assets, for the year ended December 31, 2022, we examined the sole equipment item purchased with DoD funds, totaling $225,505. We noted this item did not display a tag/label identifying the equipment as federally funded in accordance with PROP Article II. Criteria 2 CFR 200.303 requires the recipient/subrecipient to establish, document, and maintain effective internal control over the federal award. Additionally, 2 CFR 200.313 requires management controls over equipment acquired under a federal award (e.g., a control NEW SPACE NEXUS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2022 40 system safeguarding and tracking equipment). The award’s Department of Defense Research and Development General Terms and Conditions, Property (PROP) Article II, requires equipment purchased with DoD funds to be labeled/identified as federally funded. Effect Untagged federally funded equipment increases the risk that New Space cannot readily demonstrate funding source and federal interest, potentially resulting in noncompliance in equipment tracking, inventory, and disposition requirements. Cause Policies/procedures did not specify a tagging requirement for federally funded equipment and management did not perform periodic supervisory review of tagging completeness. Recommendation Management should (1) update written property procedures to require tagging upon receipt, (2) assign a property custodian (title) responsible for tagging and maintaining the property record, (3) perform and document a periodic (at least annual) supervisory review of tagging completeness, and (4) remediate existing items by tagging all identified federally funded equipment. Views of Responsible Officials and Planned Corrective Action Management concurs and will update written property and equipment procedures to require tagging of all federally funded equipment upon receipt. Management will require the Innovation Program Manager responsible for tagging, maintaining property records, and performing at least annual inventory and tagging reviews. All existing federally funded equipment will be reviewed and appropriately tagged. This policy will also be taken upon with the current equipment that is already in use in our facility, including the TVAC machine. Owned by: Innovation Program Manager By: January 30, 2023.
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, 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). According to federal regulations, property records must be maintained to include a description of the property, a serial number or other identification number, the source of funding for the property, 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 program was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years. Condition/Context: A physical inventory of equipment was not performed during fiscal year 2022 or in the prior fiscal year. There are no controls in place to ensure the inventory records are agreed to the capital assets ledger, and the accuracy and completeness of property records supporting federally funded assets could not be verified. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: Lack of sufficient internal controls over physical inventory and property management may have contributed to this finding, in addition to limited staffing and competing priorities. Effect: Without a physical inventory of capital assets that agree to the general ledger, it is possible that assets could be misappropriated without detection or disposed of improperly. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-007. Recommendation: We recommend that the entity establish and implement procedures to perform a physical inventory of all equipment at least once every two years, in accordance with 2 CFR 200.313(d)(2). The results of the inventory should be reconciled to the property records and capital assets ledger. Additionally, management should implement controls to ensure ongoing accuracy and completeness of equipment records, particularly for federally funded assets. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.
2 CFR Sections 200.313 (c) through (e) require equipment having a useful life of more than one year and a per-unit acquisition cost which equal or exceeds $5,000 must be maintained in the Board’s property records. A computer server costing $29,500 was not properly classified as capitalized equipment and as such, was omitted from the Board’s Fixed Asset Inventory.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency, Noncompliance Criteria or specific requirement: Compliance Requirements- Equipment Management -- Grants and Cooperative Agreements Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-federal entity for financial statement purposes or $5,000 (2 CFR section 200.1). Title to equipment acquired by a non-federal entity under grants and cooperative agreements vests in the non-federal entity subject to certain obligations and conditions (2 CFR section 200.313(a)). Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: (b) 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). (c) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: Based on our review of the Equipment and Real Property Management compliance requirements, we noted that the Division has written policies regarding Equipment and Real property management. We noted that, Division’s property records did not include all required elements as required by (2 CFR section 200.313(d)(1)). We also noted that, physical inventory of the property was not performed and thus the results were not reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Cause: The Division did not ensure that as a non-Federal entity Division’s, Property records must: (1) include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales 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. Effect: Division is not in compliance with federal compliance requirements for Equipment and Real Property management. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. • A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Views of responsible officials: Divisional Headquarters and the local units will include all relevant information on the master vehicle list and take a physical inventory at leas once every two years. See corrective action plan.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency, Noncompliance Criteria or specific requirement: Compliance Requirements- Equipment Management -- Grants and Cooperative Agreements Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-federal entity for financial statement purposes or $5,000 (2 CFR section 200.1). Title to equipment acquired by a non-federal entity under grants and cooperative agreements vests in the non-federal entity subject to certain obligations and conditions (2 CFR section 200.313(a)). Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: (b) 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). (c) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: Based on our review of the Equipment and Real Property Management compliance requirements, we noted that the Division has written policies regarding Equipment and Real property management. We noted that, Division’s property records did not include all required elements as required by (2 CFR section 200.313(d)(1)). We also noted that, physical inventory of the property was not performed and thus the results were not reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Cause: The Division did not ensure that as a non-Federal entity Division’s, Property records must: (1) include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales 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. Effect: Division is not in compliance with federal compliance requirements for Equipment and Real Property management. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. • A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Views of responsible officials: Divisional Headquarters and the local units will include all relevant information on the master vehicle list and take a physical inventory at leas once every two years. See corrective action plan.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency, Noncompliance Criteria or specific requirement: Compliance Requirements- Equipment Management -- Grants and Cooperative Agreements Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-federal entity for financial statement purposes or $5,000 (2 CFR section 200.1). Title to equipment acquired by a non-federal entity under grants and cooperative agreements vests in the non-federal entity subject to certain obligations and conditions (2 CFR section 200.313(a)). Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: (b) 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). (c) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: Based on our review of the Equipment and Real Property Management compliance requirements, we noted that the Division has written policies regarding Equipment and Real property management. We noted that, Division’s property records did not include all required elements as required by (2 CFR section 200.313(d)(1)). We also noted that, physical inventory of the property was not performed and thus the results were not reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Cause: The Division did not ensure that as a non-Federal entity Division’s, Property records must: (1) include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales 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. Effect: Division is not in compliance with federal compliance requirements for Equipment and Real Property management. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. • A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Views of responsible officials: Divisional Headquarters and the local units will include all relevant information on the master vehicle list and take a physical inventory at leas once every two years. See corrective action plan.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency, Noncompliance Criteria or specific requirement: Compliance Requirements- Equipment Management -- Grants and Cooperative Agreements Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-federal entity for financial statement purposes or $5,000 (2 CFR section 200.1). Title to equipment acquired by a non-federal entity under grants and cooperative agreements vests in the non-federal entity subject to certain obligations and conditions (2 CFR section 200.313(a)). Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: (b) 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). (c) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: Based on our review of the Equipment and Real Property Management compliance requirements, we noted that the Division has written policies regarding Equipment and Real property management. We noted that, Division’s property records did not include all required elements as required by (2 CFR section 200.313(d)(1)). We also noted that, physical inventory of the property was not performed and thus the results were not reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Cause: The Division did not ensure that as a non-Federal entity Division’s, Property records must: (1) include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales 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. Effect: Division is not in compliance with federal compliance requirements for Equipment and Real Property management. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. • A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Views of responsible officials: Divisional Headquarters and the local units will include all relevant information on the master vehicle list and take a physical inventory at leas once every two years. See corrective action plan.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency, Noncompliance Criteria or specific requirement: Compliance Requirements- Equipment Management -- Grants and Cooperative Agreements Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-federal entity for financial statement purposes or $5,000 (2 CFR section 200.1). Title to equipment acquired by a non-federal entity under grants and cooperative agreements vests in the non-federal entity subject to certain obligations and conditions (2 CFR section 200.313(a)). Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: (b) 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). (c) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: Based on our review of the Equipment and Real Property Management compliance requirements, we noted that the Division has written policies regarding Equipment and Real property management. We noted that, Division’s property records did not include all required elements as required by (2 CFR section 200.313(d)(1)). We also noted that, physical inventory of the property was not performed and thus the results were not reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Cause: The Division did not ensure that as a non-Federal entity Division’s, Property records must: (1) include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales 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. Effect: Division is not in compliance with federal compliance requirements for Equipment and Real Property management. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. • A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Views of responsible officials: Divisional Headquarters and the local units will include all relevant information on the master vehicle list and take a physical inventory at leas once every two years. See corrective action plan.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency, Noncompliance Criteria or specific requirement: Compliance Requirements- Equipment Management -- Grants and Cooperative Agreements Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-federal entity for financial statement purposes or $5,000 (2 CFR section 200.1). Title to equipment acquired by a non-federal entity under grants and cooperative agreements vests in the non-federal entity subject to certain obligations and conditions (2 CFR section 200.313(a)). Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: (b) 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). (c) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: Based on our review of the Equipment and Real Property Management compliance requirements, we noted that the Division has written policies regarding Equipment and Real property management. We noted that, Division’s property records did not include all required elements as required by (2 CFR section 200.313(d)(1)). We also noted that, physical inventory of the property was not performed and thus the results were not reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Cause: The Division did not ensure that as a non-Federal entity Division’s, Property records must: (1) include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales 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. Effect: Division is not in compliance with federal compliance requirements for Equipment and Real Property management. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. • A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Views of responsible officials: Divisional Headquarters and the local units will include all relevant information on the master vehicle list and take a physical inventory at leas once every two years. See corrective action plan.
Reference Number: 2022-002 Prior Year Finding: No Federal Agency: U.S. Department of Housing and Urban Development Pass-through Agency: Various Federal Program: Emergency Solutions Grant Program ALN Number: 14.231 Compliance Requirement: Equipment and Real Property Management Type of Finding: Significant Deficiency, Noncompliance Criteria or specific requirement: Compliance Requirements- Equipment Management -- Grants and Cooperative Agreements Equipment means tangible personal property, including information technology systems, having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-federal entity for financial statement purposes or $5,000 (2 CFR section 200.1). Title to equipment acquired by a non-federal entity under grants and cooperative agreements vests in the non-federal entity subject to certain obligations and conditions (2 CFR section 200.313(a)). Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: (b) 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). (c) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition: Based on our review of the Equipment and Real Property Management compliance requirements, we noted that the Division has written policies regarding Equipment and Real property management. We noted that, Division’s property records did not include all required elements as required by (2 CFR section 200.313(d)(1)). We also noted that, physical inventory of the property was not performed and thus the results were not reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Cause: The Division did not ensure that as a non-Federal entity Division’s, Property records must: (1) include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales 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. Effect: Division is not in compliance with federal compliance requirements for Equipment and Real Property management. Questioned costs: Cannot be determined Recommendation: We recommend that the Division must: • include a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. • A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Views of responsible officials: Divisional Headquarters and the local units will include all relevant information on the master vehicle list and take a physical inventory at leas once every two years. See corrective action plan.
2022-002 Equipment and Real Property Management Information on Federal Program: National Science Foundation (NSF) Cooperative Agreement Management and Operations of the National Radio Astronomy Observatory, Long Baseline Array and Atacama Large Millimeter Array (ALMA) ALN #: 47.049 Award #: AST-1519126 Award Year: 10/01/2016 ? 09/30/2026 Criteria ? 2 CFR Section 200.313(d)(3), Equipment, requires that recipients of federal awards develop and maintain an internal control system to ensure adequate safeguards to prevent loss, damage or theft of property acquired with federal funds. In addition, any loss, damage, or theft must be investigated. Condition ? During the year ended September 30, 2022, AUI identified an incident of theft of copper mesh at the ALMA construction site. AUI did not have adequate internal controls to prevent theft of property acquired with federal funds. AUI had implemented a limited system of internal control during a period of time due to the COVID pandemic but these controls failed to prevent property theft. In addition, it took several months for AUI to discover the theft due to the limited number of personnel onsite during the pandemic. Questioned Costs ? Below reporting threshold. Context ? This is a condition identified through AUI?s internal review and audit processes and was reported during our internal control assessment for the year ended September 30, 2022. Effect or Potential Effect ? This condition could result in unallowable expenses being charged to the federal award. Repeat Finding ? This is not a repeat finding. Cause ? Due to the shutdown caused by the COVID pandemic, limited internal controls were implemented by AUI to secure the federal property. Recommendation ? We recommend AUI comply with the Equipment compliance requirement at all times and enhance its policies and procedures to ensure adequate safeguards to prevent loss, damage or theft of property acquired with federal funds. Views of Responsible Officials ? As noted above in the Condition section, the theft of the copper mesh (which had an approximate cost of around $3,200) occurred at the height of the COVID pandemic. Despite the reduced staff and remote location of the site, controls were in place during this time period that prevented any additional losses from occurring. Despite the theft being an isolated incident, AUI put additional internal controls in place to mitigate the risk of this type of occurrence from happening in the future. These controls are described in detail in the Management?s Corrective Action Plan included as Appendix A of the attached Management Prepared Document Section.
Federal Agency: U.S. Small Business Administration Federal Program: 59.075 Shuttered Venue Operators Program Grant Period: Year ended September 30, 2022 Criteria: 2 CFR 200.313(a)(2), 2 CFR 200.311(a), 2 CFR 200.311(b) Condition: Title to real property and equipment acquired with the federal award is held by the County per the management operating agreement. Cause: As described in Note 5 to the financial statements, the Expo manages the operations of the Expo Center on behalf of Bell County through a management agreement. Per the Expo?s management agreement, any buildings, fixtures, improvements, furniture, equipment, and tangible personal property on the Expo Center premises is the property of Bell County. The Expo maintains control of capital assets for use in the operations of the Expo. Bell County owns, insures, maintains, and repairs all capital assets on the Expo premises. Potential Effect: Instances of noncompliance with direct and material compliance requirement. Repeat Finding: No Management?s Response and Planned Corrective Action: The Expo maintains physical control of all capital assets acquired with federal awards. The Expo uses all capital assets acquired with federal awards in the operations of the Expo. The relationship with Bell County provides for high quality management of capital assets through County insurance and maintenance. The Expo believes their relationship with the County does not constitute noncompliance, as the Expo uses all capital assets in its continued operations. Responsible Person: Tim Stephens, Executive Director
Finding Number: 2022-007 Prior Year Finding Number: 2021-008 Compliance Requirement: Equipment and Real Property Management Program: U.S. Department of Education COVID-19 ? Education Stabilization Fund Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D Award #: S425D210034 Award Year: 01/05/2021 ? 09/30/2022 COVID-19 ? Education Stabilization Fund American Rescue Plan - Elementary and Secondary Schools Emergency Relief Fund (ARP-ESSER) ALN: 84.425U Award #: S425U210034-21A Award Year: 03/24/2021 ? 09/30/2023 Government Department/Agency: District of Columbia Public Schools Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Additionally, per the Uniform Guidance in 2 CFR Section 200.313, Equipment, 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition ? We noted that DCPS has a policy to track and maintain a list of equipment purchased using federal funds with a single unit cost of $200 or more; and to conduct periodic equipment inventory count twice a year. Of the 56 out of 60 samples tested for equipment real property management requirements, we noted that: (1) Equipment purchased using federal funds with a single unit cost of $200 or more is tracked in the TIPWeb-IT system; however, there is no linkage between assets tracked in TIPWeb-IT and the funding source or Purchase Order. As a result, we were not able to verify that the equipment purchased using federal funds was being tracked in the TIPWeb-IT system. (2) There is no separate listing of equipment purchased using federal funds being maintained. (3) No physical inventory count was performed for equipment purchased using federal funds in 2022. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of District of Columbia Public School (DCPS)?s compliance with the specified requirements using a statistically valid sample. Effect ? There is a risk that inadequate recordkeeping of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Cause ? Due to a lack of linkage between procurement systems and asset management systems and COVID related concerns, DCPS was unable to adequately support compliance with its policies and procedures regarding monitoring of equipment acquired with Federal funds. Recommendation ? We recommend that DCPS implement policies, procedures and controls that will ensure that equipment purchased using federal funds are tracked and maintained, in order to adhere to Federal regulations related to equipment and its related maintenance. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District of Columbia Public School (DCPS) agrees with the conditions and recommendations of this finding. While DCPS has implemented and follows stringent asset procurement and management policies, we have adopted separate systems to track the purchasing, receiving, and the lifecycle of assets. The Procurement and ERP systems, PASS/SOAR are used to track purchases of assets, while the Warehouse receiving system captures a record of assets received by DCPS. The DCPS?s Asset Management System, TIPWeb tracks a device throughout its lifecycle (deployment/assignment, condition, location, disposal, etc.). This split system functionality contributes to the conditions noted in the audit findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.
Finding Number: 2022-007 Prior Year Finding Number: 2021-008 Compliance Requirement: Equipment and Real Property Management Program: U.S. Department of Education COVID-19 ? Education Stabilization Fund Elementary and Secondary School Emergency Relief (ESSER) Fund ALN: 84.425D Award #: S425D210034 Award Year: 01/05/2021 ? 09/30/2022 COVID-19 ? Education Stabilization Fund American Rescue Plan - Elementary and Secondary Schools Emergency Relief Fund (ARP-ESSER) ALN: 84.425U Award #: S425U210034-21A Award Year: 03/24/2021 ? 09/30/2023 Government Department/Agency: District of Columbia Public Schools Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Additionally, per the Uniform Guidance in 2 CFR Section 200.313, Equipment, 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 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition ? We noted that DCPS has a policy to track and maintain a list of equipment purchased using federal funds with a single unit cost of $200 or more; and to conduct periodic equipment inventory count twice a year. Of the 56 out of 60 samples tested for equipment real property management requirements, we noted that: (1) Equipment purchased using federal funds with a single unit cost of $200 or more is tracked in the TIPWeb-IT system; however, there is no linkage between assets tracked in TIPWeb-IT and the funding source or Purchase Order. As a result, we were not able to verify that the equipment purchased using federal funds was being tracked in the TIPWeb-IT system. (2) There is no separate listing of equipment purchased using federal funds being maintained. (3) No physical inventory count was performed for equipment purchased using federal funds in 2022. Questioned Costs ? Not determinable. Context ? This is a condition identified per review of District of Columbia Public School (DCPS)?s compliance with the specified requirements using a statistically valid sample. Effect ? There is a risk that inadequate recordkeeping of equipment could lead to misappropriation of assets and noncompliance with Federal regulations resulting in a return of Federal awards received. Cause ? Due to a lack of linkage between procurement systems and asset management systems and COVID related concerns, DCPS was unable to adequately support compliance with its policies and procedures regarding monitoring of equipment acquired with Federal funds. Recommendation ? We recommend that DCPS implement policies, procedures and controls that will ensure that equipment purchased using federal funds are tracked and maintained, in order to adhere to Federal regulations related to equipment and its related maintenance. Related Noncompliance ? Noncompliance. Views of Responsible Officials and Planned Corrective Actions ? The District of Columbia Public School (DCPS) agrees with the conditions and recommendations of this finding. While DCPS has implemented and follows stringent asset procurement and management policies, we have adopted separate systems to track the purchasing, receiving, and the lifecycle of assets. The Procurement and ERP systems, PASS/SOAR are used to track purchases of assets, while the Warehouse receiving system captures a record of assets received by DCPS. The DCPS?s Asset Management System, TIPWeb tracks a device throughout its lifecycle (deployment/assignment, condition, location, disposal, etc.). This split system functionality contributes to the conditions noted in the audit findings. The District?s corrective action is described in the Management?s Corrective Action Plan included as Appendix B of the attached Management?s Section.
The Board used money from the COVID-19 Education Stabilization Fund to Purchase a computer server in excess of $5,000 and failed to include the server in the fixed asset inventory as required. 2 CFR Sections 200.313 (c) through (e) require equipment having a useful life of more than one year and a per-unit acquisition cost which equal or exceeds $5,000 must be maintained in the Board's property records. A computer server costing $40,440 was not properly classified as capitalized equipment and as such, was omitted from the Board's Fixed Asset Inventory. The Board should ensure that all equipment is properly recorded in the accounting records Fixed Asset Inventory.
Finding 2022-001: Equipment and Real Property Management (Repeat Finding 2021-001) Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0022-21 FR-AMT-0025-22 FR-AMT-0026-22 Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations ? 2 CFR 200.313 Equipment requires that: 1. Equipment must be used in the program or project for which it was acquired as long as needed, whether the project or program continues to be supported by the federal award or, when appropriate, under other Federal awards; however, the non Federal entity must not encumber the equipment without prior approval of the federal awarding agency (2 CFR 200.313(c) and (e)). 2. 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 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, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). 3. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR 200.313(d)(2)). 4. 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 (2 CFR 200.313(d)(3)). 5. Adequate maintenance procedures must be developed to keep the property in good condition (2 CFR 200.313(d)(4)). The code of federal regulations ? 2 CFR 200.303 ? Internal Controls requires that non-Federal entities must: 6. Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings (2 CFR 200.303(d)). Condition The following exceptions to the criteria were observed during the performance of the audit procedures: 1. For one of the equipment samples reviewed, it was observed that the asset did not have a unique asset identifier in the originally provided equipment population. 2. For seventeen of the equipment samples reviewed, it was observed that for six of them, the Condition data or Location field in the asset records was blank and, for twelve equipment samples, the Location field and/or Condition data per the asset records did not match the actual physical location and/or condition of the asset. We understand that was due to the assets records not being updated in a timely manner with the actual status of the equipment in the field. 3. During our procedures performed for seven assets, we identified that no inventory had occurred for the asset, even though it had been placed in service over two years prior and would have required an inventory prior to our observation. As this came to our attention after the inventory was required and during our observation procedures, we investigated further and could not obtain alternative evidence to support that an inventory had occurred within the two-year period. 4. This is a repeat finding that has occurred over the last several audit periods. As such, Amtrak has not taken sufficient actions when instances of noncompliance are identified through audit findings to make necessary updates to their internal controls. Questioned Costs None. Context We selected 60 equipment items for internal control and compliance testing of the above attributes. Exceptions as described in the Condition section above were noted for matters 2, 3 and 6 in the Criteria section above, indicating that internal controls were not functioning as designed. No exceptions were noted for matters 1, 4, or 5 in the Criteria section above. Amtrak has had the same repeat finding for the last several audit periods. As exceptions were noted related to matter 6 in the Criteria section above, Amtrak has not taken sufficient actions to address audit findings related to their equipment internal controls. Effect Amtrak is in non-compliance with the related grant agreement. Additionally, when assets are not accurately identified, it could lead to logistical inefficiencies as well as the difficulty in locating and identifying equipment timely. Cause The nature of much of Amtrak?s equipment is composed of moving assets that are on the tracks and operating up and down the corridors or around the yards or moving from location to location in a geographical region to achieve daily operational objectives. Furthermore, Amtrak resources are deployed such that managers and supervisors oversee geographical regions and equipment that are located throughout various routes that often connect through multiple states with many unmanned and less traveled stations. Asset locations, including changes on short notice for where the asset will be used, and frequent inspections occur in order to keep the equipment operating safely; however, the system of record is not always updated or updated in a timely manner to reflect the location and condition of the asset in the records upon a change in asset custody. Amtrak?s equipment policy, which is inconsistent with Uniform Guidance, currently requires that the condition field be confirmed and updated as part of the two-year inventory observation requirement. In reviewing management?s controls, the key controls identified by management are not designed such that consistent and timely proactive monitoring and/or review occurs to ensure that an inventory occurs no less than once every two years. There is an identified control that stipulates ?Capital Accounting staff contact personnel in each department to obtain updated information pertaining to the observation of every two-year inventory process.? This control as designed is not preventive and may not identify the non-compliance risk until after non-compliance occurs. For the instances where the unique identifier did not match the asset records, this was caused by a clerical/human error in recording the asset details in the system in addition to a lack of review control to verify the accuracy of the data recording. Identification as a Repeat Finding This finding was identified as a repeat finding in the immediate prior year as Finding 2021-001. Recommendation We recommend that Amtrak continue to work toward a full integration or reconciliation between Amtrak?s fixed asset system of record and the different equipment-tracking systems. We recommend that management consider redesigning one of its key controls to help ensure that the monitoring of the observations is occurring on a preventive basis to help identify any exposure to non-compliance before it occurs. For example, Amtrak should consider an automated system report that would flag an asset proactively when a 2-year inventory deadline is approaching. During the observation process, management should ensure there is a review control within the process to validate that the asset is accurately tagged and such identifying information matches the equipment-tracking system. Additionally, this review control should also be performed when the asset is first logged into the equipment-tracking system. In the interim, until such processes are fully implemented, Amtrak should enhance the current control procedures surrounding the asset documentation and ensure that field personnel are aware of and consistently and carefully updating the asset records such that clerical/human errors are minimized and that the asset records contain the necessary asset details in order to properly track equipment by federal requirements. This would include enhancing the asset chain of custody recordkeeping so that such changes are identified and reported timely. Views of Responsible Officials Amtrak agrees with the recommendation to redesign key controls to help ensure that the monitoring of the observations happens on a preventive basis to help identify any exposure to non-compliance before it occurs. Amtrak recognizes that remediation of this finding will require an investment in the organization structure and the technology solutions available to the company. Since being created in early 2022 the Asset Management team has completed, with support from an outside consulting firm, a baseline assessment, as well as corrective action plans to specifically address noncompliance identified in the audit finding. To mitigate this finding, resources and investments are needed to address policy and governance around single auditable assets, the people and processes needed for a cradle-to-grave oversight of equipment management, and the technology needed to assist with creating and maintaining more robust internal controls, compliance, and timely audits. Efforts are underway that involve creating preventative internal controls, training of key personnel to help ensure that there is an end-to-end equipment lifecycle approach and accountability throughout an asset?s lifecycle, and the technology needed to support better location tracking of assets, the completion of audits, and recordkeeping. Finally, it is important to note that there has been a 31% year-over-year reduction in the total number of exceptions from thirty-six to twenty-five.
Finding 2022-001: Equipment and Real Property Management (Repeat Finding 2021-001) Program Name: National Railroad Passenger Corporation Grants COVID-19 National Railroad Passenger Corporation Grants Assistance Listing No. 20.315 Federal Award No.: FR-AMT-0020-20 FR-AMT-0022-21 FR-AMT-0025-22 FR-AMT-0026-22 Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations ? 2 CFR 200.313 Equipment requires that: 1. Equipment must be used in the program or project for which it was acquired as long as needed, whether the project or program continues to be supported by the federal award or, when appropriate, under other Federal awards; however, the non Federal entity must not encumber the equipment without prior approval of the federal awarding agency (2 CFR 200.313(c) and (e)). 2. 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 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, the location, use and condition of the property, and any ultimate disposition data, including the date of disposal and sales price of the property (2 CFR 200.313(d)(1)). 3. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR 200.313(d)(2)). 4. 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 (2 CFR 200.313(d)(3)). 5. Adequate maintenance procedures must be developed to keep the property in good condition (2 CFR 200.313(d)(4)). The code of federal regulations ? 2 CFR 200.303 ? Internal Controls requires that non-Federal entities must: 6. Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings (2 CFR 200.303(d)). Condition The following exceptions to the criteria were observed during the performance of the audit procedures: 1. For one of the equipment samples reviewed, it was observed that the asset did not have a unique asset identifier in the originally provided equipment population. 2. For seventeen of the equipment samples reviewed, it was observed that for six of them, the Condition data or Location field in the asset records was blank and, for twelve equipment samples, the Location field and/or Condition data per the asset records did not match the actual physical location and/or condition of the asset. We understand that was due to the assets records not being updated in a timely manner with the actual status of the equipment in the field. 3. During our procedures performed for seven assets, we identified that no inventory had occurred for the asset, even though it had been placed in service over two years prior and would have required an inventory prior to our observation. As this came to our attention after the inventory was required and during our observation procedures, we investigated further and could not obtain alternative evidence to support that an inventory had occurred within the two-year period. 4. This is a repeat finding that has occurred over the last several audit periods. As such, Amtrak has not taken sufficient actions when instances of noncompliance are identified through audit findings to make necessary updates to their internal controls. Questioned Costs None. Context We selected 60 equipment items for internal control and compliance testing of the above attributes. Exceptions as described in the Condition section above were noted for matters 2, 3 and 6 in the Criteria section above, indicating that internal controls were not functioning as designed. No exceptions were noted for matters 1, 4, or 5 in the Criteria section above. Amtrak has had the same repeat finding for the last several audit periods. As exceptions were noted related to matter 6 in the Criteria section above, Amtrak has not taken sufficient actions to address audit findings related to their equipment internal controls. Effect Amtrak is in non-compliance with the related grant agreement. Additionally, when assets are not accurately identified, it could lead to logistical inefficiencies as well as the difficulty in locating and identifying equipment timely. Cause The nature of much of Amtrak?s equipment is composed of moving assets that are on the tracks and operating up and down the corridors or around the yards or moving from location to location in a geographical region to achieve daily operational objectives. Furthermore, Amtrak resources are deployed such that managers and supervisors oversee geographical regions and equipment that are located throughout various routes that often connect through multiple states with many unmanned and less traveled stations. Asset locations, including changes on short notice for where the asset will be used, and frequent inspections occur in order to keep the equipment operating safely; however, the system of record is not always updated or updated in a timely manner to reflect the location and condition of the asset in the records upon a change in asset custody. Amtrak?s equipment policy, which is inconsistent with Uniform Guidance, currently requires that the condition field be confirmed and updated as part of the two-year inventory observation requirement. In reviewing management?s controls, the key controls identified by management are not designed such that consistent and timely proactive monitoring and/or review occurs to ensure that an inventory occurs no less than once every two years. There is an identified control that stipulates ?Capital Accounting staff contact personnel in each department to obtain updated information pertaining to the observation of every two-year inventory process.? This control as designed is not preventive and may not identify the non-compliance risk until after non-compliance occurs. For the instances where the unique identifier did not match the asset records, this was caused by a clerical/human error in recording the asset details in the system in addition to a lack of review control to verify the accuracy of the data recording. Identification as a Repeat Finding This finding was identified as a repeat finding in the immediate prior year as Finding 2021-001. Recommendation We recommend that Amtrak continue to work toward a full integration or reconciliation between Amtrak?s fixed asset system of record and the different equipment-tracking systems. We recommend that management consider redesigning one of its key controls to help ensure that the monitoring of the observations is occurring on a preventive basis to help identify any exposure to non-compliance before it occurs. For example, Amtrak should consider an automated system report that would flag an asset proactively when a 2-year inventory deadline is approaching. During the observation process, management should ensure there is a review control within the process to validate that the asset is accurately tagged and such identifying information matches the equipment-tracking system. Additionally, this review control should also be performed when the asset is first logged into the equipment-tracking system. In the interim, until such processes are fully implemented, Amtrak should enhance the current control procedures surrounding the asset documentation and ensure that field personnel are aware of and consistently and carefully updating the asset records such that clerical/human errors are minimized and that the asset records contain the necessary asset details in order to properly track equipment by federal requirements. This would include enhancing the asset chain of custody recordkeeping so that such changes are identified and reported timely. Views of Responsible Officials Amtrak agrees with the recommendation to redesign key controls to help ensure that the monitoring of the observations happens on a preventive basis to help identify any exposure to non-compliance before it occurs. Amtrak recognizes that remediation of this finding will require an investment in the organization structure and the technology solutions available to the company. Since being created in early 2022 the Asset Management team has completed, with support from an outside consulting firm, a baseline assessment, as well as corrective action plans to specifically address noncompliance identified in the audit finding. To mitigate this finding, resources and investments are needed to address policy and governance around single auditable assets, the people and processes needed for a cradle-to-grave oversight of equipment management, and the technology needed to assist with creating and maintaining more robust internal controls, compliance, and timely audits. Efforts are underway that involve creating preventative internal controls, training of key personnel to help ensure that there is an end-to-end equipment lifecycle approach and accountability throughout an asset?s lifecycle, and the technology needed to support better location tracking of assets, the completion of audits, and recordkeeping. Finally, it is important to note that there has been a 31% year-over-year reduction in the total number of exceptions from thirty-six to twenty-five.
Criteria or Specific Requirement - 2 CFR Part 200.313(d) outlines procedures for managing equipment (including replacement equipment whether acquired in whole or in part under a Federal award until disposition takes place). At a minimum, equipment and real property must 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 Federal Award Identification Number), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award number 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 - During our testing of equipment and property inventory compliance, we identified three pieces of equipment with acquisition costs totaling $207,845 where the equipment was not added to the property records in the year of purchase. In addition, an inventory count for nine pieces of equipment totaling approximately $135,992 was not performed within the past two-years. Cause - Certain Foundation personnel did not comply with documented controls related to the physical inventory and reconciliation of property records for equipment to prevent noncompliance and the potential loss of equipment procured with Federal funds. Effect or Potential Effect - The Foundation did not comply with 2 CFR Part 200.313. Failure to properly conduct an inventory of equipment and timely add equipment acquisitions to property records can result in noncompliance and potential loss of equipment procured with Federal funds. Questioned Costs - Not applicable as there were no questioned costs related to noncompliance. Context - This matter was identified through our testing of equipment records and disclosure by the Foundation of certain inventory items not being counted timely. BDO noted that three pieces of equipment were not added to the property records in the year of purchase. There was a total of 184 pieces of equipment over $5,000 added to property records in fiscal year 2022. The equipment identified had a value of $207,845 out of a total equipment and property value of $104,263,192. The nine pieces of equipment not counted within the past two-years totaled $135,992. Repeat Finding - This is not a repeat finding from the prior year. Recommendation - We recommend that the Foundation comply with procedures to ensure compliance with 2 CFR Part 200.313 in relation to equipment and real property inventory procedures and maintenance of property records. Policies and procedures are already in place; therefore, personnel must implement those documented policies and procedures. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with this finding. Please refer to management?s corrective action plan.
Criteria or Specific Requirement - 2 CFR Part 200.313(d) outlines procedures for managing equipment (including replacement equipment whether acquired in whole or in part under a Federal award until disposition takes place). At a minimum, equipment and real property must 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 Federal Award Identification Number), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award number 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 - During our testing of equipment and property inventory compliance, we identified three pieces of equipment with acquisition costs totaling $207,845 where the equipment was not added to the property records in the year of purchase. In addition, an inventory count for nine pieces of equipment totaling approximately $135,992 was not performed within the past two-years. Cause - Certain Foundation personnel did not comply with documented controls related to the physical inventory and reconciliation of property records for equipment to prevent noncompliance and the potential loss of equipment procured with Federal funds. Effect or Potential Effect - The Foundation did not comply with 2 CFR Part 200.313. Failure to properly conduct an inventory of equipment and timely add equipment acquisitions to property records can result in noncompliance and potential loss of equipment procured with Federal funds. Questioned Costs - Not applicable as there were no questioned costs related to noncompliance. Context - This matter was identified through our testing of equipment records and disclosure by the Foundation of certain inventory items not being counted timely. BDO noted that three pieces of equipment were not added to the property records in the year of purchase. There was a total of 184 pieces of equipment over $5,000 added to property records in fiscal year 2022. The equipment identified had a value of $207,845 out of a total equipment and property value of $104,263,192. The nine pieces of equipment not counted within the past two-years totaled $135,992. Repeat Finding - This is not a repeat finding from the prior year. Recommendation - We recommend that the Foundation comply with procedures to ensure compliance with 2 CFR Part 200.313 in relation to equipment and real property inventory procedures and maintenance of property records. Policies and procedures are already in place; therefore, personnel must implement those documented policies and procedures. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with this finding. Please refer to management?s corrective action plan.
Criteria or Specific Requirement - 2 CFR Part 200.313(d) outlines procedures for managing equipment (including replacement equipment whether acquired in whole or in part under a Federal award until disposition takes place). At a minimum, equipment and real property must 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 Federal Award Identification Number), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award number 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 - During our testing of equipment and property inventory compliance, we identified three pieces of equipment with acquisition costs totaling $207,845 where the equipment was not added to the property records in the year of purchase. In addition, an inventory count for nine pieces of equipment totaling approximately $135,992 was not performed within the past two-years. Cause - Certain Foundation personnel did not comply with documented controls related to the physical inventory and reconciliation of property records for equipment to prevent noncompliance and the potential loss of equipment procured with Federal funds. Effect or Potential Effect - The Foundation did not comply with 2 CFR Part 200.313. Failure to properly conduct an inventory of equipment and timely add equipment acquisitions to property records can result in noncompliance and potential loss of equipment procured with Federal funds. Questioned Costs - Not applicable as there were no questioned costs related to noncompliance. Context - This matter was identified through our testing of equipment records and disclosure by the Foundation of certain inventory items not being counted timely. BDO noted that three pieces of equipment were not added to the property records in the year of purchase. There was a total of 184 pieces of equipment over $5,000 added to property records in fiscal year 2022. The equipment identified had a value of $207,845 out of a total equipment and property value of $104,263,192. The nine pieces of equipment not counted within the past two-years totaled $135,992. Repeat Finding - This is not a repeat finding from the prior year. Recommendation - We recommend that the Foundation comply with procedures to ensure compliance with 2 CFR Part 200.313 in relation to equipment and real property inventory procedures and maintenance of property records. Policies and procedures are already in place; therefore, personnel must implement those documented policies and procedures. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with this finding. Please refer to management?s corrective action plan.
Criteria or Specific Requirement - 2 CFR Part 200.313(d) outlines procedures for managing equipment (including replacement equipment whether acquired in whole or in part under a Federal award until disposition takes place). At a minimum, equipment and real property must 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 Federal Award Identification Number), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award number 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 - During our testing of equipment and property inventory compliance, we identified three pieces of equipment with acquisition costs totaling $207,845 where the equipment was not added to the property records in the year of purchase. In addition, an inventory count for nine pieces of equipment totaling approximately $135,992 was not performed within the past two-years. Cause - Certain Foundation personnel did not comply with documented controls related to the physical inventory and reconciliation of property records for equipment to prevent noncompliance and the potential loss of equipment procured with Federal funds. Effect or Potential Effect - The Foundation did not comply with 2 CFR Part 200.313. Failure to properly conduct an inventory of equipment and timely add equipment acquisitions to property records can result in noncompliance and potential loss of equipment procured with Federal funds. Questioned Costs - Not applicable as there were no questioned costs related to noncompliance. Context - This matter was identified through our testing of equipment records and disclosure by the Foundation of certain inventory items not being counted timely. BDO noted that three pieces of equipment were not added to the property records in the year of purchase. There was a total of 184 pieces of equipment over $5,000 added to property records in fiscal year 2022. The equipment identified had a value of $207,845 out of a total equipment and property value of $104,263,192. The nine pieces of equipment not counted within the past two-years totaled $135,992. Repeat Finding - This is not a repeat finding from the prior year. Recommendation - We recommend that the Foundation comply with procedures to ensure compliance with 2 CFR Part 200.313 in relation to equipment and real property inventory procedures and maintenance of property records. Policies and procedures are already in place; therefore, personnel must implement those documented policies and procedures. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with this finding. Please refer to management?s corrective action plan.