Finding Text
Finding 2024-003: Disposition of Property and Equipment (Material Weakness in Internal Controls over Equipment and Compliance Finding) Federal Agency(ies): United States Agency for Global Media Federal Program(s): International Broadcasting Independent Grantee Organizations Assistance Listing Number(s): 90.500 Pass-through Entity (if applicable): N/A Award Identification Number and Year: MN01-24-GO-00001 (2024) Criteria or Specific Requirement: MBN's Federal award requires that requests for disposition instructions concerning property purchased with Grant Funds with an estimated fair market value (at the time of such disposition) of U.S. $5,000 or more must be submitted to USAGM 7 days in advance of the proposed disposition. Condition: During fiscal year 2024, MBN reported disposals of Federally funded property and equipment with a cost basis of approximately $3.1M. While we noted that the book value of the disposed equipment was zero, as it had been fully depreciated, we were unable to determine whether MBN conducted a fair market value assessment of the disposed items, or whether MBN submitted a request for disposition instructions to USAGM related to such property and equipment. Cause: MBN did not have adequate internal controls or resources in place to ensure compliance, due in part to the Organization's restructuring and downsizing. Effect or Potential Effect: Potential noncompliance with the equipment reporting requirements of USAGM Questioned Costs: None Context: As noted above, the total disposals reported in the financial statements during FY 2024 were approximately $3.1M at cost basis. Identification as a Repeat Finding, if Applicable: Repeat of Finding 2023-004Recommendation: We recommend that in the future, MBN implement a process whereby equipment dispositions are only posted to the accounting system after the preparation and submission of disposition requests to USAGM, and that the items disposed of be specifically identified both in the disposition request, and in the equipment subledger, such that the two can be directly reconciled.