Equipment/Real Property Management Head Start ALN# 93.600 US Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-02; 10CH011215-03; 10HE000901-01 Grant period – 2021 & 2022 Criteria – 2 CFR 200.439(d)(1) requires that property records must be maintained for equipment acquired under a federal award 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. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition – During testing it was noted that the Inventory tracking sheet did not contain all assets with federal interest under the Head Start program. It was also noted that there were items not included in the physical inventory observation taken. Cause – The Agency did not properly include all additions in the current year to the fixed asset schedule, which resulted in a lack of proper property records and missing physical inventory observation was made for assets included on properly records. Effect – Failure to include all items and take a full physical inventory observation could result in noncompliance with the grant agreements. Questioned Costs – Not applicable. Recommendation – We recommend the Agency follow its capital asset management policy to ensure all assets are adequately accounted for and properly safeguarded. CRI also recommends that the Agency include all of the information required by the Uniform Guidance in one central tracking spreadsheet or database. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Criteria: §2 CFR 200.439 Equipment and other capital expenditures establish that “(1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity, (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity.” Condition: From a sample of fifteen (15) equipment, COR3 was unable to provide supporting evidence for approval from the federal agency for one (1) purchase transaction that requires such prior approval. Cause: Lack of supervision to ascertain compliance with requirements and procedures established for purchase of specialized equipment with a cost of $5,000 or more. Effects: Lack of supervision may result in noncompliance with the allowable costs/cost principles requirements. Questioned Costs: $54,959.25 Recommendation: We recommend management to increase the level of supervision to ascertain the established requirements for the purchase of specialized equipment are met.
Criteria: §2 CFR 200.439 Equipment and other capital expenditures establish that “(1) Capital expenditures for general purpose equipment, buildings, and land are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity, (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $5,000 or more have the prior written approval of the Federal awarding agency or pass-through entity.” Condition: From a sample of fifteen (15) equipment, COR3 was unable to provide supporting evidence for approval from the federal agency for one (1) purchase transaction that requires such prior approval. Cause: Lack of supervision to ascertain compliance with requirements and procedures established for purchase of specialized equipment with a cost of $5,000 or more. Effects: Lack of supervision may result in noncompliance with the allowable costs/cost principles requirements. Questioned Costs: $54,959.25 Recommendation: We recommend management to increase the level of supervision to ascertain the established requirements for the purchase of specialized equipment are met.