Finding 37976 (2022-007)

Significant Deficiency
Requirement
F
Questioned Costs
-
Year
2022
Accepted
2023-04-27

AI Summary

  • Core Issue: The organization did not complete the required inventory of real property and equipment purchased with federal funds for the Section 242 program.
  • Impacted Requirements: This failure violates OMB Compliance Supplement guidelines, which mandate internal controls for compliance with federal laws and program requirements.
  • Recommended Follow-Up: Management should establish a robust internal control policy to ensure the inventory is conducted regularly, regardless of staffing changes.

Finding Text

2022-007 Department of Housing and Urban Development Federal Financial Assistance Listing #14.128 Section 242 ? Mortgage Insurance - Hospitals Equipment and Real Property Management Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: The OMB Compliance Supplement requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The Section 242 ? Mortgage Insurance - Hospitals Program requires an inventory of real property and equipment purchased with federal funds to be completed every two years. For the year ended July 31, 2021, the Organization failed to perform this inventory when the last had been performed for the year ended July 31, 2020. Cause: There was turnover of key financial personnel during 2022 and 2021. The Organization did not have an internal control policy to ensure the inventory of real property and equipment would be performed when there was a change in the individual responsible for ensuring the count occurred. Effect: The inventory or real property and equipment was not completed in accordance with requirements. Question Costs: None reported. Context/Sampling: None as there would only be one inventory performed. Repeat Finding from Prior Year: No Recommendation: We recommend that management should implement an internal control to make sure the inventory count is being performed despite any possible changes in staffing. Views of Responsible Officials: Management agrees with the finding.

Corrective Action Plan

The Organization will perform an inventory of real property and equipment before the end of FY 2023 along with scheduling such inventories every two years in the future.

Categories

Equipment & Real Property Management

Other Findings in this Audit

  • 37972 2022-003
    Material Weakness Repeat
  • 37973 2022-004
    Material Weakness Repeat
  • 37974 2022-005
    Significant Deficiency Repeat
  • 37975 2022-006
    Significant Deficiency Repeat
  • 614414 2022-003
    Material Weakness Repeat
  • 614415 2022-004
    Material Weakness Repeat
  • 614416 2022-005
    Significant Deficiency Repeat
  • 614417 2022-006
    Significant Deficiency Repeat
  • 614418 2022-007
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.128 Mortgage Insurance_hospitals $13.44M
93.155 Rural Health Research Centers $256,978
93.697 Covid-19 Testing for Rural Health Clinics $200,000
21.027 Coronavirus State and Local Fiscal Recovery Funds $105,606