Criteria: The Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI, Compliance Supplement 2017, section 3.2-F-1 states: "Non-Federal entities other than States must follow 2 CFR sections 200.313(c) through (e) which require that: 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 2 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)). Adequate maintenance procedures must be developed to keep the property in good condition (2 CFR section 200.313(d)(4))." Condition: The City does not maintain property records of all equipment and real property acquired or improved through Federal funds. The City has not performed a physical inventory of property acquired with federal funds within the past two years. We were therefore unable to test items from these records to ascertain that physical inspections of equipment were conducted, equipment is appropriately safeguarded, property records are maintained, and dispositions were properly handled per Federal awarding agency disposition instructions. Cause: Lack of internal controls over recording and maintaining of capital assets. Effect or Potential Effect: The City is exposed to possible grantor sanctions and inaccuracies in the maintenance of its capital assets. Questioned Cost: None Context: The City was not able to provide evidence of a detailed listing for property records in relation to equipment purchased with Federal funds. A fire engine was indicated to have been purchased in the current year in relation to the Public Facilities Improvements Project as noted in the IDIS CDBG Activity Summary Report. Equipment acquisitions were also reported in prior years. Repeat of a Prior-Year Finding: 2015-002, 2014-007, 2013-007