Finding Text
Finding 2023-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S Department of the Interior AL Program: 15.875 Federal Award No: Various Area: Equipment and Real Property Management Questioned Costs: None Criteria: 2 CFR §200.313(d)(1) requires property records to include a description, serial number or ID number, source of funding (including FAIN), title holder, acquisition date, cost, federal participation percentage, location, use and condition, and disposition data including disposal date and sale price. Condition: The following were noted: 1. The State’s capital asset register reflected no Compact Sector–funded capitalized infrastructure additions since FY 2016, despite completed contracts during 2016 through 2021. The State was unable to provide supporting documentation evidencing capitalizable values, project ownership, or other required details. 2. Four (4) assets or batches of assets that met the State’s capitalization requirements were not capitalized until corrected through audit adjustments. Cause: For both conditions there is a lack of internal control monitoring over fixed asset capitalization. Effect: The State is not in compliance with applicable equipment and real property management requirements. The impact could not be quantified: therefore, no question costs are reported. Recommendation: The State should consider the following: 1. For Condition 1, the State should obtain documentation to support capitalizable values and confirm ownership. 2. For Condition 2, all assets related to health-sector acquisitions, the State should improve coordination between the Department of Health and Human Services and the State Treasury to ensure eligible items are capitalized at requisition or purchase order stage. Identification as a Repeat Finding: N/A View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.