Finding Text
Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Non-compliance related to Federal Awards Federal Award Information Funding Agency: U.S. Department of Defense, passed through the Air Force Research Laboratory Title: New Space New Mexico Small Satellite Manufacturing and Innovation Hub (iHub) AL #: 12.599 Award #: FA9453-21-3-1001 Compliance Requirement: Equipment and Real Property Management Award Period: 06/01/2021-05/31/2026 Questioned Costs: None Noted Condition During our testing of New Space Nexus’ fixed assets, for the year ended December 31, 2022, we examined the sole equipment item purchased with DoD funds, totaling $225,505. We noted this item did not display a tag/label identifying the equipment as federally funded in accordance with PROP Article II. Criteria 2 CFR 200.303 requires the recipient/subrecipient to establish, document, and maintain effective internal control over the federal award. Additionally, 2 CFR 200.313 requires management controls over equipment acquired under a federal award (e.g., a control NEW SPACE NEXUS SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended December 31, 2022 40 system safeguarding and tracking equipment). The award’s Department of Defense Research and Development General Terms and Conditions, Property (PROP) Article II, requires equipment purchased with DoD funds to be labeled/identified as federally funded. Effect Untagged federally funded equipment increases the risk that New Space cannot readily demonstrate funding source and federal interest, potentially resulting in noncompliance in equipment tracking, inventory, and disposition requirements. Cause Policies/procedures did not specify a tagging requirement for federally funded equipment and management did not perform periodic supervisory review of tagging completeness. Recommendation Management should (1) update written property procedures to require tagging upon receipt, (2) assign a property custodian (title) responsible for tagging and maintaining the property record, (3) perform and document a periodic (at least annual) supervisory review of tagging completeness, and (4) remediate existing items by tagging all identified federally funded equipment. Views of Responsible Officials and Planned Corrective Action Management concurs and will update written property and equipment procedures to require tagging of all federally funded equipment upon receipt. Management will require the Innovation Program Manager responsible for tagging, maintaining property records, and performing at least annual inventory and tagging reviews. All existing federally funded equipment will be reviewed and appropriately tagged. This policy will also be taken upon with the current equipment that is already in use in our facility, including the TVAC machine. Owned by: Innovation Program Manager By: January 30, 2023.