Finding Text
Condition –Within the last two years, the Organization did not perform a physical inventory over fixed assets purchased with federal grant funds. Criteria – The Uniform Administrative Requirements require non-federal entities to establish and maintain adequate property management systems for equipment acquired with federal funds. Specifically, such systems must include: recordkeeping that includes a description of the property, acquisition date, cost, other identifying information; physical inventories of equipment at least once every two years, with results reconciled to property records; and other controls to safeguard assets and prevent loss, damage, or theft. Effect – Failure to maintain adequate controls over fixed assets increases the risk that federally funded equipment may be lost, stolen, misused, or not used for authorized purposes. Recommendation – We recommend that the Organization strengthen its controls over federally funded fixed assets by performing physical inventories of all fixed assets at least biennially, with results reconciled to the fixed asset records; tagging all newly acquired fixed assets with a unique identification number at the time of acquisition; and establishing written policies and assigning responsibility to ensure ongoing compliance with requirements. Management's Response – See management's corrective action plan on pages 32-33.