Finding Text
MW 2022-004 DISPOSITION OF GRANT-PURCHASED PROPERTY US Department of Transportation ? Federal Aviation Administration ALN: 20.106 Airport Improvement Program Contract No. Undetermined Florida Department of Transportation CSFA: 55.004 Aviation Grant Programs Contract No. Undetermined Criteria: 2 CFR section 200.303 and Section 215.97(10), Florida Statutes, require award recipients to establish and maintain effective internal controls over compliance with federal awards and state financial assistance programs. Award recipients under the Airport Improvement Program and the Aviation Grant Program are subject to assurance that proper records are maintained for equipment and real property acquired with federal awards or state financial assistance such that the disposition of any equipment and real property is in accordance with federal and state requirements, and the federal or state awarding agency has appropriately authorized the use of any proceeds from property sold or authorized its conversion to nonfederal or nonstate use. Condition: In December 2021, the Authority disposed of real property whose acquisition was funded in part with federal awards and state financial assistance. The Authority did not properly maintain records that identified the source of funds used to acquire property and other capital assets. As a result, the properties were sold without prior authorization of the Federal Aviation Authority and the Florida Department of Transportation. Cause of condition: The properties at issue were originally acquired in and around 2005 and 2006. In the past few years, the Authority has seen turnover in positions key to the grant compliance process. Additionally, as noted in the fiscal year 2021 audit as finding MW 2021-002, the Authority?s capital asset records have not been maintained in sufficient detail to identify specific assets or that identified the source of funding used to acquire property and capital assets. As a result, current management initiated the sale of these properties without consulting the FAA or the Florida Department of Transportation. Questioned costs: None Potential effect of condition While the Florida Department of Transportation has since retroactively acknowledged the sale of the properties and has released their portion of the proceeds from the sales to the Authority, ultimate resolution of the portion of the proceeds from the sales attributed to funding from the FAA is with the FAA. Perspective: When the new Director of Airports arrived at the Authority in fiscal year 2021, he was presented with concerns from the Board about the condition of these properties and the decision was made by the Authority to sell them. The proceeds from the sale of the properties was reported as restricted net position as of September 30, 2021, pending investigation into the original source of funding for the purchases. In addition to the lack of detail in the capital asset records, the prior management did not provide an Exhibit A with the Master Plan, which would have documented properties purchased with federal funds. Recommendation: The Authority should maintain its asset listing in sufficient detail to readily describe the asset using unique identifiers such as the legal description for real property and the source of funding used for the acquisition. For property or equipment acquired using federal or state grant funds, the Authority should ensure compliance with any requirements of the grant(s) related to disposition of property. Management?s Response: The Authority acknowledges the audit finding and corrective action is being taken. All capital assets purchased and donated will be recorded in the listing of capital assets and recorded in the accounting software. The Authority will be redesigning the control to be more efficient and deciding whether to keep a single listing with all various attributes required by the standard setting or oversight bodies for which the Authority must comply or keeping multiple listings and reconciling them no less than annually. The Authority will report restricted net position for the proceeds from the sale of the property referred to in the finding. Research is being conducted into the origin of the funds used for the original property purchases through the Master Plan.