Finding Text
Condition: The Organization did not conduct a physical inventory of vehicles during the audit period as required by supplemental compliance requirements. Criteria: Supplemental compliance requirements mandate that a physical inventory of assets be performed annually to confirm existence and condition. Cause: The lapse occurred due to reliance on alternative asset management controls rather than performing the required annual physical inventory during the audit period. Effect: Although the physical inventory was delayed, mitigating controls such as maintenance logs, GPS tracking, and lifecycle monitoring were in place. These controls reduce the risk of asset misstatement, loss, and operational inefficiencies. As a result, no questioned costs will be reported, and the issue does not indicate systemic weakness. Recommendation: Reinforce compliance with annual physical inventory requirements. Establish a monitoring process to ensure timely completion of physical inventories. Continue leveraging alternative controls but use them as supplements, not substitutes, for physical verification. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. Planned corrective actions include: - Scheduling annual physical inventories and documenting completion. - Updating internal procedures to integrate physical inventory timelines with existing asset management controls. - Assigning responsibility to asset management staff for compliance oversight.