Finding Text
2024-002 Equipment Records and Physical Inventory Requirements Not Maintained Federal Program(s) Information Federal Agency: U.S. Department of Homeland Security Award Name: Assistance to Firefighters Grant Assistance Listing Number: 97.044 Award Year: 2022 Compliance Requirement: Equipment Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement In accordance with 2 CFR §200.313, entities must maintain equipment records that include, at a minimum: • Description of the property; • Serial number or other identification number; • Source of funding for the property, including the Federal Award Identification Number (FAIN); • Who holds title; • Acquisition date; • Cost of the property; • Percentage of federal participation in the project costs for the federal award under which the property was acquired; • Location, use, and condition of the property; and • Ultimate disposition data, including the date of disposal and sales price, if applicable. Additionally, 2 CFR §200.313 requires a physical inventory of federally funded equipment to be taken and the results reconciled to the equipment records at least once every two years. Condition and Context During testing of equipment purchased with grant funds, we noted the Town's equipment inventory records did not contain all elements required by Uniform Guidance. Specifically, the equipment listing was missing certain required information, such as acquisition date, federal award identification, source of funding, title held, percentage of federal participation, cost and condition. Additionally, the Town was unable to provide documentation demonstrating that a physical inventory of federally funded equipment had been conducted and reconciled to the inventory records within the required two-year period. Cause The Town had not established adequate procedures to ensure that equipment records contained all information required by Uniform Guidance. Furthermore, controls were not in place to monitor and document the completion of the required biennial physical inventory. Effect or Potential Effect Incomplete equipment records increase the risk that federally funded assets may not be properly identified, monitored, safeguarded, or disposed of in accordance with federal requirements. Failure to perform and document a physical inventory may result in undetected loss, theft, misuse, or inaccurate reporting of federally funded equipment. Questioned Costs No questioned costs are reported. Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should update its equipment records to include all information required by 2 CFR §200.313, develop and implement written procedures governing the tracking and management of federally funded equipment, perform a comprehensive physical inventory of federally funded equipment and reconcile the results to the equipment records and establish a process to ensure physical inventories are performed and documented at least once every two years. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.