Finding 1236710 (2024-003)

Item 2024-003 Property and Equipment Management (Repeat 2023-003 and Significant Deficiency in Internal Control) Assistance Listing Number 93.600 Head Start Cluster U.S. Department of Health and Human Services Grant No. 04CH010931-05-01 Condition – The Inventory tracking sheet did not contain all required asset information and was not properly reconciled to property records. Criteria – 2 CFR 200.303(a) of the Uniform Guidance requires non-Federal entities to establish and maintain effective internal control over compliance with federal statutes, regulations, and the terms and conditions of federal awards. 2 CFR Part 200.313(d)(1) of the Uniform Guidance requires that property records must be maintained for equipment acquired under a federal award 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 sale price of the property. The Club’s financial policies and procedures indicate a physical inventory of federal property will be taken annually. It also states that it will be reconciled by the purchasing and accounts payable bookkeeper. Cause – The Club did not include all required property information on the inventory tracking sheet and information was not properly reconciled to property records due to staff turnover. Questioned Costs – Not determinable. Effect – Failure to comply with equipment management requirements could result in noncompliance with the grant agreements. Recommendation – CRI recommends the Club follow the requirements of 2 CFR Part 200.313(d)(1). CRI also recommends the Club include all of the information required by the Uniform Guidance in one central tracking spreadsheet and include the following fields in addition to the items previously being tracked: • the source of funding for the property (including the Federal award identification number), • who holds title, • the acquisition date, • cost of the property, • percentage of Federal participation in the project costs for the Federal award under which the property was acquired, • use and • condition of the property, • and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). This spreadsheet should also be used to conduct a physical observation which is reconciled with the property records. This inventory should be taken at least once every two years. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.