Finding No.: 2024-025 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases Federal Award No.: NU50CK000558 Area: Equipment and Real Property Management Questioned Costs: $ Undeterminable Criteria: Section 200.313(d) of the Uniform Guidance states that procedures for managing equipment, whether acquired in whole or in part with grant funds, must meet the following requirements: a. Property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including the FAIN), 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. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property; b. A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years; c. 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; d. Regular maintenance procedures shall be developed to keep the property in good condition; and e. If the recipient or subrecipient is authorized or required to sell the property, proper sales procedures must be in place to ensure the highest possible return. Additionally, the carrying amount of long-lived assets and the estimated useful lives of assets should be periodically re-assessed and adjusted, as appropriate, based on actual experience and relevant factors and circumstances. Furthermore, 2 CFR 200.303(a) states that a recipient of a Federal award must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align 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). Condition: 1. RepMar, through Ministry of Health and Human Services (MOHHS) lacks adequate internal control policies and procedures over compliance with the applicable federal property rules and regulations. 2. RepMar, through MOHHS, does not maintain capital asset records that meet the criteria above. 3. RepMar, through MOHHS, has not conducted a physical inventory of program equipment, whether acquired in whole or in part with program funds. Therefore, as of September 30, 2024, the required biannual physical inventory and reconciliation of program property records was not performed. 4. As capital asset records are not effectively maintained by PSS, RepMar is unable to demonstrate that adequate controls have been implemented to safeguard capital assets from loss, damage, or theft and to ensure such occurrences are appropriately investigated. 5. RepMar, through MOHHS, has not established policies and procedures governing property maintenance. We were unable to assess the overall cumulative monetary value of these deficiencies. Furthermore, RepMar, through MOHHS, was unable to provide program capital outlay information for the past three years. Cause: RepMar lacks adequate entity-wide internal control policies and procedures to satisfy compliance with federal property rules and regulations and lacks effective procedures governing equipment management. Effect or Potential Effect: RepMar is in noncompliance with applicable equipment and real property management requirements. Questioned costs, if any, which may result from inadequate property records, maintenance procedures, and the lack of physical inventory and reconciliation are not determinable. Identification as a Repeat Finding: 2023-014 Recommendation: RepMar, through MOHHS, should implement adequate internal control policies and procedures to facilitate compliance with applicable property rules and regulations. MOHHS should conduct a physical inventory of program equipment and reconcile the results with property records and should develop adequate maintenance procedures in order to keep equipment in good condition. In addition, RepMar through MOHHS, should consider coordinating with other RepMar ministries and agencies to offer training on property management requirements to all personnel responsible for capital assets. Views of Responsible Officials: Conditions 1-5 Repeat Finding, same response for Finding Nos. 2024-007, 2024-012, and 2024-019