FAC Explorer

Finding 31343 (2022-001)

Significant Deficiency
Requirement
F
Questioned Costs
-
Year
2022
Accepted
2023-04-24
Audit: 33790
Organization: Civil Air Patrol (AL)
Auditor: Warren Averett

AI Summary

  • Core Issue: CAP's equipment management systems (ORMS and Navision) are not accurately updated, leading to discrepancies in asset tracking.
  • Impacted Requirements: Accurate reporting and management of disposals and acquisitions are compromised, affecting overall asset management.
  • Recommended Follow-Up: Review and purge non-trackable assets, implement accuracy checks by a second party, and include comparative reports in quarterly reconciliations.

Finding Text

Finding 2022-001 ? Equipment Management (Significant Deficiency) Criteria/Condition: Civil Air Patrol?s (CAP) equipment management system includes the Operational Resource Management System (ORMS), Navision (listing of depreciable assets) and an Access database, which tracks items that have not been placed in service. Navision and ORMS were not accurately updated for current year activity. Cause/Effect: Inaccurate information was used to update several current year disposals and acquisitions in ORMS and Navision. This resulted in discrepancies in and between the systems, though between the two, all required information was included. Recommendation: The contents of each component of CAP?s equipment management system should be reviewed for accuracy. Any items that are not deemed a ?trackable asset? should be purged from the system to make the contents more manageable and meaningful. All additions to the system should be reviewed for accuracy by someone other than the preparer. Internal system controls that prevent an addition without the full complement of required information should be considered. Comparative reports between the system should be included in the quarterly reconciliation process. These reports should be run before and after the reconciliation process to ensure the identified activity was posted correctly.

Corrective Action Plan

We concur with the finding and have implemented procedures to address all issues. Approximately 90% of the items listed in ORMS that were found to be missing in-service dates were not fixed assets. More than half of the items were acquired more than 5 years ago. In-service dates have been added in ORMS for all items which did not have one. This was implemented April 2023. The in-service date in ORMS was an optional field which was often left blank since an acquisition date was usually entered and the two are often the same. The field is now required and will be reviewed at least quarterly to ensure no items have blank fields. In-service dates for all fixed assets will be verified and matched to the accounting system during the fixed asset reconciliation each month. This will be implemented May 2023. It is common for some equipment to be removed from aircraft when the aircraft is sold. Those items generally remain in fixed assets for future use. CAP Financial Management (FM) requests this information from CAP Logistics (LG) and that process has worked well in the past. However, in fiscal year 2022, four items which were retained from disposed aircraft were inadvertently disposed of in the accounting software. This was due to a miscommunication between FM and LG. We will begin verifying the items that are retained by checking ORMS and including multiple LG staff members on our communications. This will be implemented May 2023. CAP uses contra accounts to offset expenses when items are capitalized. Items are often purchased with various funds. Our entries are created manually and can consist of hundreds of lines. This can sometimes result in errors when the additions are posted to the contra accounts. We had some assets which were funded with appropriated funds, but the contra entry was posted to a different fund causing the funds to be out of balance. A correction was posted when the error was found. We will start reconciling contra accounts by fund during the monthly fixed asset reconciliation process. This will be implemented May 2023.

Categories

Significant Deficiency Equipment & Real Property Management

Other Findings in this Audit

  • 31344 2022-002
    Significant Deficiency
  • 607785 2022-001
    Significant Deficiency
  • 607786 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
12.840 Civil Air Patrol Program $67.80M
14.218 Community Development Block Grants/entitlement Grants $123,857