Finding Text
Criteria
CFR part 75.320 Equipment:
Management requirements. Procedures for managing equipment (including
replacement equipment), when in whole or in part under a federal award, until
disposition takes place will, as a minimum, meet some of the following
requirements.
(2) A physical inventory of the property must be taken, and the result
reconciled with the property records at least once every two years.
(3) A control system must be developed to ensure adequate safeguards to
prevent loss, damage, or theft of the property. Any loss, damage, or theft shall
be investigated.
(4) Adequate maintenance procedures must be developed to keep the property
in good condition.
(5) If the grantee or subgrantee is authorized or required to sell the property,
proper sales procedures must be established to ensure the highest possible
return.
(6) 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.
Condition
The school did not maintain adequate internal control over property and
equipment. The school did not provide a real and personnel property record of all
the property and equipment acquired this year with Federal funds and Insurance.
Questioned Cost
None determined
Cause
The school doesn’t have accurate property records of Federal funds to trace the
personal and real property activities that should be reported to Federal funds.
Effect
The Fountain Christian Bilingual School-Guayama, Inc. does not present fairly
the financial position of the financial statements.
Identification of repeated findings:
Repeating findings were found.
Recommendation
A control system must be developed to ensure adequate safeguards to prevent
loss, damage, or theft of the property; loss, damage, of theft must be investigated.
Adequate maintenance procedures must be developed to keep the property in
good condition. The school must identify all properties acquired with Federal
funds and maintain adequate accounting records in accordance with Federal
regulations. The program must maintain an automated accounting and recordkeeping system adequate for effective oversight.
Management Response
The board of directors will be meeting to hire an accountant to certify the property
that is present at Fountain Bilingual School-Guayama, Inc. to make a consistent
property listing. Also make a control system to ensure adequate safeguards to
prevent loss, damage, or theft of the property and maintain adequate accounting
records.