Finding Text
Statement of Condition: During our testing of internal control policies and procedures over equipment/real property management, we noted management had not created internal control policies and procedures to ensure the organization was in compliance with equipment/real property management. As a result, we noted that management was not properly tracking property purchased by federal grant funds per the OMB compliance requirements and the Code of Federal Regulations (2 CFR Part 200 Subpart D). Criteria: In accordance with the OMB compliance requirements and the Code of Federal Regulations (2 CFR Part 200 Subpart D), management must create and monitor internal control policies and procedures to ensure that property records are maintained for all property purchased using federal grant funds. Adequate maintenance procedures must also be developed to keep the property in good condition. In addition, a physical inventory of the property purchased by federal grant funds is required. Cause: Management did not have the proper internal control policies and procedures to monitor property purchased using federal grant funds nor did they have a proper understanding of equipment/real property management requirements. Therefore, they did not maintain an adequate listing of the property that was purchased with federal grant funds Effect: Appropriate records were not maintained for previously purchased property using federal grant funds. Recommendation: We recommend that management maintain documentation for all property purchased using federal grant funds. These records must include a description of the property, the serial number or other identification number, source of funding (including federal award identification number), who holds title, acquisition date, cost, location, use and condition of property, and any disposition data. In addition, procedures should be developed to ensure that routine maintenance is being completed on a timely basis. Documentation of this maintenance should be maintained within the property records. In addition, a physical inventory of the property purchased by federal grant funds should be performed on a routine basis and reconciled with the property records at least once every two years.