Finding Text
Department of Housing and Urban Development Federal Financial Assistance Listing #14.128 Section 242 – Mortgage Insurance - Hospitals Equipment and Real Property Management Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: The OMB Compliance Supplement requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The Section 242 – Mortgage Insurance - Hospitals Program requires an inventory of real property and equipment purchased with federal funds to be completed every two years. For the year ended July 31, 2025, the Organization failed to document the performance of this inventory when the last had been performed for the year ended July 31, 2023. Cause: There was turnover of key financial personnel during the year. The Organization did not have an internal control policy to ensure the inventory of real property and equipment would be performed when there was a change in the individual responsible for ensuring the count occurred. Effect: The inventory of real property and equipment was not completed in accordance with requirements. Question Costs: None reported. Context/Sampling: None as there would only be one inventory performed. Repeat Finding from Prior Year: No Recommendation: We recommend that management should implement an internal control to ensure the inventory count is being performed despite any possible changes in staffing. Views of Responsible Officials: Management agrees with the finding.