Finding Text
Finding 2022-002 ? Capital Assets are not properly maintained ? Internal Controls over Property, Plant & Equipment ? Significant Deficiency ? Qualified at Single Audit Level ALN No. 14.850 Criteria: Good internal control practices as provided in the Government Auditing Standards along with the common rule in Federal regulations require that the Capital Assets be supported with detailed capital asset records, and that these be supported by an inventory conducted at least every two years. The results of the inventory should be compared with the capital asset records to give assurance that the books and records of account are adequately supported. Additionally, depreciation should begin on assets as soon as they are placed into service, and old equipment items which have been disposed of should be removed from both the capital asset system and the general ledger. Condition: Upon review of the capital assets depreciation schedule, we noted several items which are being carried on the books are below the capitalization threshold and have been disposed of but are not written off the books of account. Consequently, there are numerous equipment items which are not physically present at the housing authority. Dispositions should be made annually and approved by the Board of Commissioners. Effect: The detailed capital asset schedule cannot be relied upon to give an accurate listing of equipment and assets owned by the Housing Authority. Consequently, both the cost on the general ledger and corresponding accumulated depreciation is overstated. Cause: The PHA has failed to adequately conduct a complete inventory of all nonexpendable equipment and reconcile this to the detailed property ledger and to the general ledger on a consistent annual basis. Recommendation: We recommend that the Housing Authority reconstruct the capital asset records and verify the equipment items which are physically in existence at PHA property. We also recommend that an annual inventory be conducted and used to reconcile to this property record. Additionally, all dispositions and write-offs of capital assets should be approved by the Board. Questioned Costs: None Repeat Finding: No Was sampling statistically valid? Yes Views of responsible officials: The PHA agrees with the results of the audit and recommendations.