Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases Federal Award No.: NU50CK000513 Area: Equipment and Real Property Management Questioned Costs: $19,824 Criteria: In accordance with 2 CFR 200.303(a), recipients must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Additionally, in accordance with 2 CFR 200.313(d)(1), property records must be maintained that include a description of the property, a serial number or another identification number, the source of funding for the property (including the Federal award identification number), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. Further, according to 2 CFR Section 200.313(d)(3), a control system must be in place to ensure safeguards for preventing property loss, damage, or theft. Any loss, damage, or theft of equipment must be investigated. The recipient or subrecipient must notify the Federal agency or pass-through entity of any loss, damage, or theft of equipment that will have an impact on the program. Lastly, according to 2 CFR Section 200.313(d)(4), regular maintenance procedures must be in place to ensure the property is in proper working condition. Condition: 1. FSMNG’s capital asset listing does not contain all required information identified in 2 CFR 200.313. The current listing does not clearly determine which program each asset belongs to. No questioned cost identified as the finding is non-monetary. 2. For four (or 21%) of 19 equipment selected for physical inspection testing, FSMNG did not properly safeguard and maintain the federal capital assets to ensure that the property is existing and is in proper working condition. Based on the physical inspection, the following capital assets were either not located or found to be in a broken state, with no evidence indicating that they are currently under repair. Cause: 1. FSMNG’s current policy and procedure for capital asset listing management and maintenance is not in accordance with 2 CFR 200.313(d)(1). 2. FSMNG does not have established maintenance and security procedures to ensure that all federal capital assets are properly maintained and secured in the assigned premises. Effect or Potential Effect: FSMNG is in noncompliance with applicable equipment and real property management requirements and a total questioned costs $19,824 result. The amount of the questioned cost is based on the net book value of the asset. Identification as a Repeat Finding: Finding No. 2023-017. Recommendation: 1. FSMNG should update the structure and contents of their current capital asset listing to include all the information required by 2 CFR 200.313(d)(1). Additionally, FSMNG should improve their policies and procedures on management and maintenance of their capital asset listing. 2. FSMNG should establish safeguarding and maintenance procedures that ensure performance of periodic inspections, timely repairs, and adequate security in each location of all federal capital assets. Views of Responsible Officials: Management agrees with the finding. As set out in the responses to Findings 2024-006 and 2024-011, management recognizes that the current Fixed Asset Register (FAR) needs to be rebuilt, with proper recording aligned to the Fiscal Management Regulations and to the property record requirements of 2 CFR Section 200.313(d)(1). The rebuilt register will capture the required data elements — including the description, serial or identification number, the source of funding for the property including the Federal award identification number, the title holder, acquisition date and cost, the percentage of Federal contribution, and the location, use, and condition of each asset — so that capital assets procured with federal funding under the program can be clearly identified, together with any disposition data. The rebuild must be completed well ahead of the FY2025 audit, as the FAR will then be migrated into the new integrated FMIS (FreeBalance), which maintains a fixed asset register module of its own within the system. Establishing a clean, accurate register prior to migration — with the funding source of each asset identified — will ensure the system-based FAR carries correct and complete records from the outset. Proper advice and guidance has now been provided to the Supply Team on the recording, tracking, reconciliation, safeguarding, and maintenance of capital assets. Once the rebuild of the FAR is completed, the Supply Team will conduct physical checks and counts of assets — which will include locating and confirming the status and condition of the assets identified in this finding — so that adjustments, including deletions and other corrections, can be made for FY2025 and the appropriate action taken on assets found to be missing, broken, or requiring repair or disposition, in line with the safeguarding and maintenance requirements of 2 CFR Sections 200.313(d)(3) and (d)(4). In line with the auditors' recommendation, a written policy with comprehensive procedures will be established covering effective safeguards against loss, damage, or theft of property, together with maintenance protocols to preserve the property in good condition, and these procedures will be enforced to ensure federal capital assets are kept safe and in good working condition. Summary Schedule — Remarks (2024-015): Repeat 2023-017. Finding agreed. Addressed together with 2024-006 and 2024-011 — FAR to be rebuilt aligned to the regulations and 2 CFR 200.313(d)(1) property record elements, identifying assets procured with federal funding including the award identification number. Rebuild ahead of the FY2025 audit and migration into the new FMIS (FreeBalance) FAR module. Physical checks and counts to follow the rebuild, including confirmation of the status of the assets identified. Per the recommendation, a written safeguarding and maintenance policy with comprehensive procedures to be established and enforced per 2 CFR 200.313(d)(3) and (d)(4).