Finding Text
Program Information:
U.S. Department of the Interior
AL Number Award Number Award Period Grant Name
15.029 A21AV00088 10/1/2020-9/30/2023 Judicial Services
U.S. Department of Transportation
AL Number Award Number Award Period Grant Name
20.205 A18AV01093/A17AV00612 1/1/2018-12/31/2022 Highway Planning and Construction Cluster
AL Number Award Number Award Period Grant Name
20.509 A18AV01093/218AV00785 1/1/2018-9/30/2023 Road Maintenance Programs
Criteria:
Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) 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).
Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, 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 sales price of the property (2 CFR section 200.313(d)(1)).
A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)).
A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated (2 CFR section 200.313(d)(3)).
Condition/Context:
Management has not implemented an effective internal control system.
• A physical inventory was taken in 2021 but was not reconciled to the general ledger.
15.029
• A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records.
20.205
• A physical inventory was conducted in 2021; however, there were no documented controls over the inventory, and it was not reconciled to the property records.
• 3 of 3 Individually Important Items (IIIs) equipment additions did not have all required approvals.
• 1 of 2 equipment addition samples had no support provided.
• 1 of 2 equipment addition samples did not have all required approvals.
20.509
• A physical inventory was conducted in 2021; however, there were no documented controls over the Inventory, and it was not reconciled to the property records.
• 6 of 6 equipment samples including prior year equipment did not have support provided.
[X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness
Cause:
Due to turnover in key personnel, Joint Programs had a breakdown in internal controls during 2022.
Effect:
Without an effective internal control system, an entity’s objective: operations, reporting, and compliance cannot be achieved. In addition, property records can be incorrect, and property can be damaged or lost without the knowledge of management.
Questioned Costs:
Due to lack of sufficient documentation, we were unable to determine questioned costs.
Repeat Finding:
Yes – 2021-004.
Recommendation:
We recommend that Joint Programs use the Green Book to design, implement, and operate internal controls to achieve its objectives related to operations, reporting, and compliance. In addition, we recommend that the physical inventory taken is reconciled with the property records at least once every two years.
View of Responsible Officials and Planned Corrective Action:
Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.