Federal Agencies: 11 – Department of Commerce, 12 – Department of Defense, 15 – Department of the Interior, 16 – Department of Justice, 43 – National Aeronautics and Space Administration, 47 – National Science Foundation, 81 – Department of Energy, 84 – Department of Education, 93 – Department of Health and Human Services Federal Program Title: R&D Cluster and Congressional Directives Assistance Listing Number: R&D and 93.493 Award Period: July 1, 2024, through June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: In accordance with 2 CFR §200.313(d), non-Federal entities must maintain effective control and accountability for all equipment acquired under a Federal award. Property records must be maintained and include, at a minimum, a description of the equipment (including a serial number or other identification number), source of funding (including the Federal award identification number), who holds title, acquisition date, cost of the equipment, percentage of Federal participation in the cost, location, use and condition of the equipment, and any ultimate disposition data, including the date of disposal and sales price or the method used to determine current fair market value. Additionally, 2 CFR §200.313(d)(2) requires a physical inventory of equipment to be taken and the results reconciled with the property records at least once every two years. 2 CFR §200.313(d)(3) further requires non-Federal entities to establish adequate safeguards to prevent loss, damage, or theft of equipment. Condition/Context: During our testing of Equipment and Real Property Management, we selected a sample of 11 equipment items, consisting of 6 items from the R&D Cluster and 5 items from the Congressional Directives program. The following exceptions were noted: • For 2 of the 6 R&D equipment items, the UEC did not perform a physical inventory within the last two years. • For 1 of the 6 R&D equipment items and 1 of the 5 Congressional Directives equipment items, the UEC did not maintain property records containing the information required under Federal equipment management requirements. • For 1 of the 6 R&D equipment items, we were unable to physically inspect the equipment, as photographs or other evidence of existence were not provided by the UEC. • For 1 of the 6 R&D equipment items, while initial property records (invoice support demonstrating review and confirmation that the equipment was received) were available, we were unable to confirm that ongoing control systems were in place to safeguard the equipment after initial acquisition. Questioned Costs: $77,610. Effect: Without complete property records, timely physical inventories, and adequate safeguarding controls, the UEC is unable to demonstrate compliance with Federal equipment management requirements, increasing the risk of loss, misuse, or improper disposition of equipment purchased with Federal funds. Cause: The UEC’s internal controls over equipment tracking, inventory, and safeguarding were not designed or implemented to consistently ensure compliance with Federal equipment management requirements across Federal programs. Repeat Finding: No. Recommendation: We recommend the UEC establish and implement equipment management procedures to ensure property records are complete, physical inventories are performed at least biennially, and adequate safeguards are maintained for all equipment acquired with Federal funds. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.