Finding Text
Finding 2025-009 – Equipment and Real Property Management: Lack of Documentation Supporting Physical Inventory Counts – Significant Deficiency in Internal Control Over Compliance; Agencies – Department of Health and Human Services, National Science Foundation, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023, 2022, 2021, 2020 / Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.313 requires recipients of federal awards to maintain property records for equipment acquired under federal awards, perform a physical inventory of equipment at least once every two years, and reconcile the results of the physical inventory to the property records.; Condition – The inventory count control could not be verified because management was unable to provide documentation showing that inventory counts were completed within the required two-year period.; Cause – Management did not have sufficient documentation retention policies and procedures to ensure physical inventory counts of federally funded equipment were documented, reconciled to property records, and retained in accordance with federal equipment management requirements.; Effect or Potential Effect – Without documented physical inventory counts and reconciliations, management may not identify missing, inaccurate, or unsupported equipment records timely.; Questioned Costs - None reported.; Context – During testing of three equipment samples totaling $334,957, management stated that physical inventory counts had been performed; however, APU did not provide documentation showing that the counts occurred within the required two-year period or that the results were reconciled to the property records. Detailed asset records were maintained for the items tested, and we were able to verify that the assets remained in service. However, due to the lack of retained inventory count and reconciliation documentation, we could not verify that the physical inventory control operated as designed for the three samples selected.; Repeat Finding – This is not a repeat finding.; Recommendation - Management should ensure physical inventory counts of equipment are performed and documented at least once every two years, and that documentation of the inventory counts and related reconciliations is retained to demonstrate compliance with federal equipment management requirements.; Views of Responsible Officials – Management concurs with the finding and is implementing procedures to document, reconcile, and retain required physical inventory records.