Finding 2712 (2021-001)

2021-001 Equipment and Real Property Management Grantor: U.S. Department of Treasury/U.S. Department of Justice Award Name: Equitable Sharing Program Award Year: 01/01/21 – 12/31/21 CFDA Numbers: 21.016 / 16.922 Criteria OMB Uniform Guidance §200.313, states that equipment acquired with Federal funds and Federally owned equipment shall be maintained accurately and shall include a description of the equipment, manufacturer’s serial number, model number, other identification number, source of the equipment (including the award number), whether title vests in the recipient or the Federal Government, acquisition date and cost, location and condition of the equipment and the date the information was reported and unit acquisition cost. Further, a physical inventory of all Federal equipment shall be taken and the results reconciled with the equipment records at least once every two years. Any differences between quantities determined by the physical inspection and those shown in the accounting records shall be investigated to determine the causes of the differences. The recipient shall, in connection with the inventory, verify the existence, current utilization and continued need for the equipment. Condition During our equipment inventory testing procedures, we selected 8 items from the equipment inventory listing and traced them to the physical asset and reviewed the vendor activity report along with the purchase orders and traced them to the equipment inventory listing (10 selections in total across the Borough). Through our testing, we identified two selections that were not inventoried in accordance with applicable requirements. Cause The Borough utilizes the services of Acclaim Inventory, LLC to perform equipment inventory listing and identification processing. During equipment identification through the use of Borough ledgers and purchase orders, it is assumed that the personnel of Acclaim Inventory, LLC did not identify these two items as assets. Effect The required inventory was not fully performed in year 2021 as required, therefore, Federally funded equipment could be inaccurately captured on the inventory records and not discovered and corrected. Questioned Costs None noted. Recommendation The Borough should complete a full inventory observation for all Federally funded equipment that was not inventoried timely. Additionally, the Borough should implement a formal training program for managers of Federal equipment to ensure appropriate personnel have an understanding of OMB Uniform Guidance requirements specific to equipment inventory. We recommend that management continue to develop a program and reasonable timelines to allow the federal equipment observation to be performed by the required due dates. Management’s View and Corrective Action Plan Management’s views and corrective action plan is included under separate cover and filed with the State of New Jersey.