Finding Text
Equipment Management (Significant Deficiency/Compliance) ALN No. 14.218 – Community Development Block Grant Criteria: The Uniform Guidance requires non-federal entities to maintain effective internal control and accountability over equipment acquired with federal funds. Specifically, 2 CFR 200.313(d)(2) requires a physical inventory of equipment to be conducted and reconciled with property records at least once every two years. These requirements apply to equipment purchased with CDBG funds. Condition: We noted that the City did not perform a physical inventory of equipment purchased with federal funds. As a result, the City was unable to provide documentation demonstrating that a biennial physical inventory had been conducted and reconciled to its property records. Effect: The lack of a physical inventory conducted on equipment acquired with federal funds results in noncompliance with 2 CFR 200.313(d)(2). Cause: The City did not have adequate procedures in place to ensure compliance with federal equipment management requirements, including the timely performance and documentation of physical inventories. Questioned Costs: $0 Recommendation: We recommend the City establish and implement formal equipment management procedures to ensure that a physical inventory of all federally funded equipment is performed and documented at least once every two years. The inventory should be reconciled to the City’s equipment records, discrepancies should be investigated and resolved timely, and supporting documentation should be retained to demonstrate compliance with Uniform Guidance requirements. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.