Finding Text
Finding 2025-003 – Significant Deficiency and Noncompliance – Federal Equipment Program Information: Assistance to Firefighters, U.S. Department of Homeland Security, EMW- 2022-FG-06581 and EMW-2023-FG-08163, 2024, ALN #97.044 Criteria: Per 2 CFR §200.313(d), non-federal entities must maintain accurate property records for equipment acquired with federal funds including certain information. Additionally, entities must conduct a physical inventory of equipment at least once every two years and reconcile the results with equipment records. Condition: The auditee did not maintain a complete and accurate listing of equipment purchased with federal funds under ALN 97.044. Furthermore, the auditee did not perform, or document physical inventory counts of such equipment during the audit period. Questioned Costs: None identified at this time. However, due to the lack of inventory controls, there is an increased risk of misappropriation or loss of federally funded equipment. Cause and Effect: The auditee lacked adequate internal controls and procedures to ensure compliance with federal equipment management requirements. There was no designated responsibility for maintaining equipment records or conducting inventory counts. Failure to maintain equipment records and conduct inventory counts may result in: Inability to verify the existence and condition of federally funded equipment, Increased risk of asset loss or misuse, Potential disallowance of costs by the federal awarding agency, Noncompliance with Uniform Guidance requirements, which may impact future funding eligibility. Recommendation: We recommend the auditee: Develop and implement formal procedures for tracking equipment purchased with federal funds, Assign responsibility to staff for maintaining equipment records in accordance with 2 CFR §200.313(d), Conduct and document physical inventory counts at least biennially, reconciling results with equipment records, Train relevant personnel on federal equipment management requirements to ensure ongoing compliance. Views of Responsible Officials: Management agrees with the finding Corrective Action Plan: See attached corrective action plan.