Finding 396370 (2022-004)

Material Weakness Repeat Finding
Requirement
F
Questioned Costs
-
Year
2022
Accepted
2024-05-09
Audit: 305958
Organization: State of Kosrae (FM)

AI Summary

  • Core Issue: The State failed to conduct the required physical inventory of federally funded property for over three years, leading to noncompliance with federal equipment management requirements.
  • Impacted Requirements: Property records lack essential details such as identification numbers, acquisition dates, and condition, which are necessary for proper asset management.
  • Recommended Follow-Up: Responsible personnel must perform the physical inventory every two years and ensure property records are complete and accurate as per federal guidelines.

Finding Text

Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior AL Program: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: Various Compact Sector Grants Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: In accordance with applicable equipment and real property management requirements, a physical inventory of property acquired in whole or in part under a Federal award must be taken, and the results reconciled with the property records, at least once every two years, until disposition takes place. Such property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date and cost of the property, percentage of Federal participation in the cost of the property, location, and use and condition of the property. Condition: The State did not perform the required physical inventory of property acquired in whole or in part under a Federal award within the past three years, and property records do not identify the required information for all program-funded assets. We are unable to quantify the extent of noncompliance. However, the table below summarizes the capital outlays over the past 3 years. "See Schedule of Findings and Questioned Costs for chart/table" Cause: The State has weak internal controls over the receiving, recording, reviewing and tagging of capital assets by the supply officer prior to releasing the capital asset/equipment to a department. Effect: The State is in noncompliance with applicable equipment management requirements. No questioned cost is presented as we are unable to quantify the extent of noncompliance. However, the cumulative capital outlays over the past three years exceed the program’s FY2022 materiality level. Recommendation: Responsible personnel should perform the required physical inventory at least once every two years and reconcile results with the property records, which should identify the required asset details in accordance with applicable equipment and real property management requirements. Identification as a Repeat Finding: Finding No. 2021-003Views of Responsible Officials: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on 09/12/23. Therefore, no further action is considered necessary. Auditor Response: Physical inventory procedures were performed and completed by KSG in 2023, which is after the fiscal year ended September 30, 2022. Also, resolution with the cognizant grantor agency did not occur as of September 30, 2022.

Corrective Action Plan

Finding No.:2022-004 Area:- Equipment and Real Property Management Views of Auditee and Planned Corrective Action: As explained several times, Finding No. 2021-003 (required physical inventory of capital assets) was already resolved with the cognizant grantor agency, Department of the Interior – Office of Insular Affairs on September 12, 2023. Therefore, no further action is considered necessary. Anticipated Completion Date: Ongoing Name of Contact Person: Ms. Lona Lyndon Esau, Administrator Office of Finance, Department of Administration and Finance Email: alomalya.dofa@gmail.com

Categories

Equipment & Real Property Management

Other Findings in this Audit

  • 396371 2022-004
    Material Weakness Repeat
  • 396372 2022-004
    Material Weakness Repeat
  • 396373 2022-004
    Material Weakness Repeat
  • 396374 2022-004
    Material Weakness Repeat
  • 396375 2022-004
    Material Weakness Repeat
  • 396376 2022-004
    Material Weakness Repeat
  • 396377 2022-004
    Material Weakness Repeat
  • 396378 2022-004
    Material Weakness Repeat
  • 396379 2022-004
    Material Weakness Repeat
  • 396380 2022-005
    Significant Deficiency
  • 396381 2022-005
    Significant Deficiency
  • 396382 2022-005
    Significant Deficiency
  • 396383 2022-005
    Significant Deficiency
  • 396384 2022-005
    Significant Deficiency
  • 396385 2022-005
    Significant Deficiency
  • 396386 2022-005
    Significant Deficiency
  • 396387 2022-005
    Significant Deficiency
  • 396388 2022-005
    Significant Deficiency
  • 396389 2022-005
    Significant Deficiency
  • 972812 2022-004
    Material Weakness Repeat
  • 972813 2022-004
    Material Weakness Repeat
  • 972814 2022-004
    Material Weakness Repeat
  • 972815 2022-004
    Material Weakness Repeat
  • 972816 2022-004
    Material Weakness Repeat
  • 972817 2022-004
    Material Weakness Repeat
  • 972818 2022-004
    Material Weakness Repeat
  • 972819 2022-004
    Material Weakness Repeat
  • 972820 2022-004
    Material Weakness Repeat
  • 972821 2022-004
    Material Weakness Repeat
  • 972822 2022-005
    Significant Deficiency
  • 972823 2022-005
    Significant Deficiency
  • 972824 2022-005
    Significant Deficiency
  • 972825 2022-005
    Significant Deficiency
  • 972826 2022-005
    Significant Deficiency
  • 972827 2022-005
    Significant Deficiency
  • 972828 2022-005
    Significant Deficiency
  • 972829 2022-005
    Significant Deficiency
  • 972830 2022-005
    Significant Deficiency
  • 972831 2022-005
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.027 Special Education_grants to States $501,499
15.875 Economic, Social, and Political Development of the Territories $461,479
93.959 Block Grants for Prevention and Treatment of Substance Abuse $61,218
93.268 Immunization Cooperative Agreements $58,834
15.904 Historic Preservation Fund Grants-in-Aid $48,420
93.092 Affordable Care Act (aca) Personal Responsibility Education Program $45,267
93.994 Maternal and Child Health Services Block Grant to the States $44,010
93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (sed) $43,805
93.377 Prevention and Control of Chronic Disease and Associated Risk Factors in the U.s. Affiliated Pacific Islands, U.s. Virgin Islands, and P. R. (b) $43,565
93.788 Opioid Str $36,082
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $35,799
93.958 Block Grants for Community Mental Health Services $29,314
10.664 Cooperative Forestry Assistance $21,911
93.069 Public Health Emergency Preparedness $17,745
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $16,092
93.217 Family Planning_services $5,464
10.684 International Forestry Programs $829
93.378 Integrated Care for Kids Model (a) $784
93.110 Maternal and Child Health Federal Consolidated Programs $-462