Finding 12507 (2022-002)

Material Weakness Repeat Finding
Requirement
F
Questioned Costs
-
Year
2022
Accepted
2023-09-21
Audit: 17054
Organization: Battle Ground Healthcare (WA)

AI Summary

  • Core Issue: There is a material weakness in property records due to lack of substantiated equipment approvals and inadequate reviews.
  • Impacted Requirements: Equipment must be used for its intended program and approved in writing by the County before purchase.
  • Recommended Follow-Up: Establish formal policies for tracking fixed assets and implement timely review procedures.

Finding Text

Finding # 2022-002 (Repeat of 2021-002) Type: Material weakness over property records CFDA Number: 14.218/14.228 Community Development Block Grants/ Entitlement Grants Requirement: Equipment should be used in the program or project for which it was acquired, and all purchases of equipment and other capital assets with federal funds shall be approved, in advance and in writing, by the County. Condition/Context: Equipment capitalization approvals could not be substantiated, and property and equipment listings associated with federal funds were not reviewed. In addition, several adjustments were required to properly account for property and equipment. Cause: There are no formal policies for fixed asset capitalization and tracking method for federal funding source. Effect: Improper or inaccurate amounts could be paid or charged to contracts. Questioned Costs: None. Recommendation: We recommend developing appropriate controls to account for proper capitalization of fixed assets. Procedures should be put in place to ensure reviews are completed timely as well. Management Response: Management intends to develop a tracking mechanism and consider annual physical inventory of fixed assets.

Corrective Action Plan

Finding # 2022-002 (Repeat of 2021-002) Material Weakness over property records 14.218/14.228 Community Development Block Grants/ Entitlement Grants Finding: Equipment should be used in the program or project for which it was acquired, and all purchases of equipment and other capital assets with federal funds shall be approved, in advance and in writing, by the County. Recommendation: The Organization should develop appropriate controls to account for proper capitalization of fixed assets. Procedures should be put in place to ensure reviews are completed timely. Corrective Action: We have developed a fixed asset tracking schedule and intend to modify the schedule to maintain details of federally purchased fixed assets. We plan to implement an annual physical inventory of fixed assets. Anticipated Completion Date: December 31, 2023

Categories

Equipment & Real Property Management

Other Findings in this Audit

  • 12508 2022-003
    Significant Deficiency Repeat
  • 12509 2022-002
    Material Weakness Repeat
  • 588949 2022-002
    Material Weakness Repeat
  • 588950 2022-003
    Significant Deficiency Repeat
  • 588951 2022-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $1.09M
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $404,850
21.027 Coronavirus State and Local Fiscal Recovery Funds $21,223