Finding Text
Finding No.: 2019-004
Federal Agency: U.S. Department of Agriculture
CFDA Program: 10.557 Special Supplemental Nutrition Program for Women, Infants and Children (WIC)
Award Number: 7NM700NM5
Area: Equipment and Real Property Management
Questioned Costs: $-0-
Criteria:
In accordance with 2 CFR Section 200.313(b), a State must use, manage and dispose of equipment acquired under a Federal award in accordance with State laws and procedures.
The CNMI Property Management Policies states that equipment, whether acquired in whole or in part with grant funds, until disposition takes place will, at a minimum, meet the following requirements:
• Description of the property.
• Manufacturer’s serial and model numbers, federal stock number, national stock number, or other identification.
• Acquisition source of the property, including grant or agreement number and method of procurement.
• Whether title is vested with the CNMI or U.S. Government.
• Acquisition date and cost.
• Percentage (at the end of the budget year) of U.S. participation in the project or program for which the property was acquired.
• Location, use, condition, and the date the information was reported.
• Unit Acquisition Cost.
• Date of disposal and sale price method used to determine fair market value where the CNMI compensates the agency for its share.
Further, the Materials Supply Office (MSO) will conduct an annual inventory of property held by each Accountable Person as reflected in the master inventory control record. Further, MSO shall perform random audits of property held by each Accountable Person to validate the integrity of the property control process.
Finding No.: 2019-004, continued
Federal Agency: U.S. Department of Agriculture
CFDA Program: 10.557 Special Supplemental Nutrition Program for Women, Infants and Children (WIC)
Award Number: 7NM700NM5
Area: Equipment and Real Property Management
Questioned Costs: $-0-
Condition:
Tests of program expenditures noted the following:
1. MSO did not perform a fixed asset physical inventory for fiscal year 2019. No physical inventory was performed in fiscal years 2018 and 2017.
2. Property records maintained by MSO were not provided.
3. Total fixed assets schedule per the Program did not agree to the general ledger details, resulting in a variance of $39,995.
4. A reconciliation was not performed between the Program and MSO.
5. The Program’s fixed assets schedule did not include required information such as whether title is vested with the CNMI or U.S. Government and the use of the assets.
6. Of five fixed assets tested for existence verification, aggregating $121,553 of a total population of $249,070, for one (or 20%), the vehicle with Property Tag Number FA-00375-US that was traded-in for another vehicle, for which was surveyed on 10/04/18, is still included in the Program’s fixed assets schedule as of 09/30/19.
Cause:
CHCC did not enforce compliance with applicable Equipment and Real Property Management requirements.
Effect:
CHCC is in noncompliance with applicable Equipment and Real Property Management requirements. No questioned cost is presented as we are unable to quantify the extent of the noncompliance. A summary of the program’s total capital outlays for FY 2019 was $39,995.
Finding No.: 2019-004, continued
Federal Agency: U.S. Department of Agriculture
CFDA Program: 10.557 Special Supplemental Nutrition Program for Women, Infants and Children (WIC)
Award Number: 7NM700NM5
Area: Equipment and Real Property Management
Questioned Costs: $-0-
Identification as a Repeat Finding: Finding No. 2018-008.
Recommendation:
CHCC should consider identifying a fixed asset team and provide training on applicable Equipment and Real Property Management requirements, including documentation requirements. The responsible personnel should coordinate and conduct the required annual physical inventories and should reconcile results to the property records in accordance with applicable Equipment and Real Property Management requirements.
Views of Responsible Officials:
CHCC’s Corrective Action Plan provides a detailed rationale of what resulted to the finding described in Condition 3; however, management did not provide comments for Conditions 1, 2 and 4 to 6.