Finding Text
2023-008 – Equipment and Real Property Management – Material Weakness in Internal Controls over Compliance
Department of Education
Federal Assistance Listing Number: 84.031
Federal Program Name: Higher Education Institutional Aid
Federal Award Number: P031S210057, P031S170020, P031C210038
Award Year: 2022-23
Criteria – Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) for real property and equipment management. 2 CFR 200.313(d)(1) requires that property records must be maintained that include, among other things, description of the property, source of funding for the property and percentage of Federal participation in the project costs for the Federal award under which the property was acquired. 2 CFR 200.313(d)(2) states that 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 – We selected a sample of 5 equipment purchases out of a population of 25 equipment purchases made during the year. The University did not maintain the required property records for any of the purchases. In addition, the University did not perform a physical inventory for those purchases in the last two years.
Our sample was not, and was not intended to be, statistically valid.
Questioned costs – None.
Cause/effect – This occurred because of lack of controls and an antiquated equipment tracking system. The University is unable to satisfy the requirement that they maintain proper records for equipment and adequately safeguards and maintains equipment.
Repeat finding – No
Recommendation – We recommend the University update their equipment tracking system to allow the University to identify assets purchased with federal money. In addition, we recommend the University perform a physical inventory of its fixed asset at least once every two years.
Views of responsible officials and planned corrective actions – In order to track assets acquired with federal funds, the university will update its equipment tracking system and will conduct a physical inventory of its fixed assets at least every two years.