Finding 1157221 (2024-003)

Material Weakness Repeat Finding
Requirement
F
Questioned Costs
-
Year
2024
Accepted
2025-09-30
Audit: 369516
Auditor: Wegner CPAS

AI Summary

  • Core Issue: Equipment bought with federal funds wasn't recorded as capital assets.
  • Impacted Requirements: This affects compliance with NHA's capitalization policy and equipment management standards.
  • Recommended Follow-Up: NHA should capitalize the equipment and align with Uniform Guidance for proper management.

Finding Text

As discussed in Finding 2024-002, equipment purchased with federal funding was not capitalized per NHA's capitalization policy. Because equipment has not been capitalized, appropriate records, physical inventories, safeguarding and maintaining of equipment, and future disposals may not be in compliance with the equipment management requirements. NHA should capitalize equipment according to its capitalization policy and ensure compliance with equipment management requirements of Uniform Guidance.

Corrective Action Plan

Corrective Action: Management concurs with the finding and will revise its procedures to ensure that all equipment purchases over the capitalization threshold are capitalized in accordance with GAAP, while continuing to meet grant reporting requirements through separate reporting schedules. Wegner properly capitalized equipment purchases in accordance with GAAP after the audit finding was discussed in September 2025. The Board of Directors also approved the capitalization threshold to be changed from $2,500 to $5,000 on September 25, 2025. Additionally, starting in September 2025, to prevent dual reporting to grant funded expenses, the outsourced CPA adjusted the accounting software to specifically title accounts as grant funded depreciation expenses and grant funded assets.

Categories

Procurement, Suspension & Debarment Equipment & Real Property Management

Programs in Audit

ALN Program Name Expenditures
10.557 Wic Special Supplemental Nutrition Program for Women, Infants, and Children $6,685