Finding Text
Criteria In accordance with 2 CFR 200.313(c)(1), non-Federal entities must maintain accurate equipment records for all federally acquired equipment. At a minimum, the equipment records must include: • A description of the equipment • A serial number or other identification number • The source of funding for the equipment, including the Federal Award Identification Number (FAIN) • Who holds title • The acquisition date and cost • The location, use, and condition of the equipment • Any ultimate disposition data, including date of disposal and sales price, if applicable In accordance with 2 CFR 200.313(d)(2) requires entities to verify the existence, current utilization, and continued need for federally funded equipment through physical inventories conducted at least once every two years and to reconcile those results with the equipment records. In accordance with 2 CFR 200.303, it is emphasized that entities maintain complete and accurate equipment listings to demonstrate proper safeguarding, tracking, and continued use of equipment acquired under Federal awards Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found We noted that the College does not maintain a complete and accurate equipment listing for federally acquired equipment. Specifically, the equipment listing did not consistently or correctly include all required data elements outlined in 2 CFR 200.313(c). Data elements that were missing from the listing included serial number, the source of funding for the equipment, including the FAIN, and the location. The data element that was incorrectly maintained on the equipment listing was acquisition date and cost as one instance was identified where the cost of acquiring an item on the equipment listing did not agree to the College’s system of record. Additionally, we noted the College does not have a process in place to reconcile the results of the bi-annual inventory count to the property record listing in order to reflect any changes or discrepancies resulting from the count. Cause The condition resulted from the absence of formally documented policies and procedures governing the maintenance and periodic review of the federally acquired equipment listing and the requirement of reconciling the federally acquired equipment to the property record listing after conducting a bi-annual physical inventory count. Also, the College has not implemented controls to ensure that required equipment information is consistently recorded, updated, and reviewed in accordance with Federal regulations. Possible Asserted Effect Failure to maintain a complete and accurate equipment listing can result in federally acquired equipment not being properly tracked, safeguarded, or used in accordance with Federal award requirements. The lack of accurate equipment records increases the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Additionally, the inability to locate equipment, inaccurate equipment records and undetected loss or misuse of federally funded equipment. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College establish and implement formal policies and procedures to ensure that a complete and accurate equipment listing for federally acquired equipment is maintained in accordance with 2 CFR 200.303 and 313. This should include ensuring that all required data elements are recorded, that the listing is periodically reviewed and updated, and that results of physical inventories are reconciled to the equipment records to support compliance with Federal award requirements. Views of Responsible Officials The College acknowledges that the federally acquired equipment listing did not include all required data elements outlined in 2 CFR 200.313(c) and did not reconcile it against the bi-annual physical inventory completed. To mitigate the risk of incomplete equipment records for federally acquired equipment, the College is formalizing policies and procedures to ensure required data elements are recorded and maintained, implementing a periodic review process to update the equipment listing, and establishing a reconciliation process to compare bi-annual physical inventory results to the property records and promptly resolve any discrepancies. These corrective actions are being implemented in fiscal year 2026.