Finding Text
Federal Agency: U.S. Department of Health and Human Services (HHS)
Pass-through Agency: N/A
Federal Programs Title: Head Start
CFDA Number: 93.600
Compliance Requirement: Property and Equipment
Type of Finding: Equipment and Real Property Management, Financial StatementMaterial Weakness
Responsible Official: Program Director
Criteria Section 75.320 Equipment
CFR pat 75.320 Equipment
Management requirements. Procedures for managing equipment (including
replacement equipment), when in whole or in part under a federal award, until
disposition takes place will, as minimum, meet some of the following required.
(1) Property records must be maintained that include a description of the property,
a serial number or other identification number, the source of funding for the
property (including the FAIN), who holds title, the acquisition date, and cost
property, percentage of federal participation in the project costs for the federal
award under which the property location, use and condition of the property, and
any ultimate disposition data including the date of disposal and sale price of
property.
(2) A physical inventory of the property must be taken, and the result reconciled
with the property records at least once every two years.
(3) A control system must be developed to ensure adequate safeguards to prevent
loss, damage, or theft of the property. Any loss, damage, or theft shall be
investigated.
Condition
The Municipality did not maintain adequate internal control over property and
equipment. The Municipality did not provide a real and personnel property record
of all the property and equipment acquired this year with federal funds and
insurance, On August 10, 2021, the Head Start program received a transfer of Rean
and tangible personal property from Centro de Servicios a la Juventud, Inc on Hatillo
Head Start, Bo. Corcovada. SF 429 and SF 428 were not submitted Evidence
presented was SF 428 on August 28, 2020.
Cause
The Municipality does not have accurate property records of federal funds to trace
the real and tangible personal property activities that should be reported to federal
funds.
Effect:
The Municipality does not present fairly the financial position of the financial
statements in the Government-Wide Financial Statements.
Questioned cost:
Not determined
Identification of a repeated finding:
None repeating findings were found.
Recommendations:
A control system must be developed to ensure adequate safeguards to prevent loss,
damage, or theft of the property; loss, damage, of theft must be investigated.
Adequate maintenance procedures mut be developed to keep the property in good
condition. The program must identify all properties acquired with federal funds and
maintain adequate accounting records in accordance with federal regulations.
Management Response:
Do not Agreed with the Finding: The program upholds a stringent monitoring
protocol for asset management, conducting annual inventories. The auditor did not
engage in verification or assessment of any property-related matters, nor did seek
specific information on this subject. The Head Start office maintains comprehensive
evidence within the Federal Register Form SF-428.