Finding Text
Finding 2023-003
Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters
Federal Agency: U.S. Small Business Administration
Federal Program: Congressional Grants, ALN No. 59.059, Award SBAHQ2210040, Award Period 9/1/2022 –
3/31/2023
Compliance Requirement: Equipment and Real Property Management
Repeat Finding: No
Condition: The Organization did not separately identify and track capital asset activity funded with federal grants.
Questioned Costs: None
Context: For the one sampled capital asset purchase, funded with this federal grant, no identifying or tracking
method was used on the capital asset listing.
Criteria: Per 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements
(Uniform Guidance), Section 200.313 Equipment, "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))."
Cause: The grantor did not communicate this requirement in the grant award document.
Effect: The identification of federally-funded capital assets allows for an organization to manage the asset
throughout its useful life until disposition, when the federal grantor may be owed a portion of the proceeds of sale.
Recommendation: We recommend a policy be developed that would include procedures for identifying and
tracking capital assets funded with federal grants. This could include identification in a capital asset listing or using a tracking mechanism.