Finding Text
2023‐001 – Equipment and Real Property Management – Material Weakness in Internal Controls
over Compliance (Repeat Finding)
Federal Program Information:
Funding Agency: U. S. Department of Health and Human Services
Title: Head Start
CFDA Number: 93.600
Federal Award Identification number: N/A
Pass Through Entity: N/A
Award Year: 2023
Condition: The Organization did not conduct a physical inventory in current year or prior year.
Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non‐federal entities must 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).
Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results
reconciled with the property records at least once every 2 years.
Questioned costs: None
Effect: The Organization could dispose of, lose, or encumber federally funded equipment without
following Federal guidelines.
Cause: The Organization does not have policies and procedures to ensure that a physical inventory of
equipment is performed at a minimum frequency of every two years.