4. 2025-004 – Equipment and Real Property Management – Material Weakness in Internal Controls over Compliance and Instance of Noncompliance Recommendation The auditors recommend the University update their equipment tracking system to allow the University to identify assets purchased with federal money. In addition, the auditors recommend the University perform a physical inventory of its fixed asset at least once every two years. Planned corrective actions: Heritage University agrees with the recommendation and recognizes the need to strengthen its processes surrounding the identification, tracking, and monitoring of federally funded equipment. The University is assessing its current practices, records, and systems to better understand existing gaps and determine an appropriate and sustainable process moving forward. This work will include reviewing how federally funded equipment is identified and tracked, clarifying responsibilities across departments, and evaluating opportunities to improve coordination and documentation throughout the lifecycle of an asset. The Office of Sponsored Programs, in collaboration with the Business Office and other affected departments, will assist in developing and documenting appropriate procedures as this assessment progresses. The University will prioritize improvements based on identified risk, available resources, system capabilities, and applicable federal and award requirements. Management recognizes that strengthening this process will require a phased approach and will continue to evaluate and implement improvements as the University's equipment records, processes, and internal controls are reviewed. Name of Responsible Party: Yesenia Rodriguez, Rachel Castilleja, Sagrario Armenta Jimenez, Joanne Fernandez, Aaron Krantz Anticipated completion date: In Progress