Finding 391938 (2023-002)

Grantor(s): Various Program: Research and Development Cluster Assistance Listing#: Various Title: Research and Development Cluster Award Year: 7/2022 – 6/2023 Award #: N/A Pass-through Number: N/A Criteria Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that a physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). Condition The University performs a physical inventory of equipment at the department level. Within the Research and Development Cluster, there are 18 departments. Of the 18 departments, 5 departments did not perform the physical inventory at least once in the last two-year period (FY23 and FY22). These 5 departments included 25 individual equipment items that totaled $711,698. The remaining population of 13 departments appropriately performed the physical inventory in the last two-year period over the remaining 125 items totaling $2,294,506 as required. Cause The cause of this finding is due to a lapse in control operation to ensure that the required physical inventory of equipment (or other capitalized assets) acquired under Federal awards was performed by the University at least once every two years. Effect The required physical inventory of equipment (or other capitalized assets) acquired under Federal awards was not performed by the University for 5 departments at least once every two years for R&D related equipment. Questioned Costs None. Recommendation Management should enhance the control in place to ensure that all departments with equipment acquired under Federal Awards are performing the physical inventory when it is requested and ensure that all equipment is verified at least once every two years. Management’s View and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included in this report.