Finding Text
FINDING 2025-003 Subject: Assistance to Firefighters Grant - Equipment and Real Property Management Federal Agency: Department of Homeland Security Federal Program: Assistance to Firefighters Grant Assistance Listings Number: 97.044 Federal Award Number and Year (or Other Identifying Number): EMW-2023-FG-06299 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters Condition and Context The City was awarded the Assistance to Firefighters Grant to fund Air-Paks for the City's fire department and other participating fire departments. The Air-Paks were not included in the City's detailed capital asset listing. The lack of internal controls and noncompliance was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) 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 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). . . ." 2 CFR 200.313(d)(1) states: "Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property." Cause The City did not design or implement internal controls to ensure the Air-Paks were included in the City's detailed capital asset listing. The City's fire department maintained an inventory of the Air-Paks; however, the Air-Paks were not included in the City's detailed capital asset listing. INDIANA STATE BOARD OF ACCOUNTS 18 CITY OF KENDALLVILLE SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the City is at risk of noncompliance with the Equipment and Real Property Management compliance requirement, including the potential for incomplete and inaccurate property records. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the City design and implement a proper system of internal controls, including policies and procedures, to ensure that assets being purchased with federal funds are added to the City's detailed capital asset listing and all required information is maintained. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.