Finding 401801 (2023-002)

2023-002 Physical Count of Capital Assets This is a repeat finding. See schedule of prior year findings number 2022-002. Condition: Management has not performed a complete physical count of the University’s capital assets once within the past two years. Physical counts of some assets were conducted. However, reliance was placed on word of mouth for the existence of some assets. Also, the property listing was found to be missing some assets and contain duplicate entries for other assets. Criteria: The Accountability section of the University’s Procedural Manual – Fixed Asset & Inventory Control states, “Physical inventories are to verify the existence, condition accuracy of our records for equipment owned, donated, and purchased, that are accountable to Sinte Gleska University. This has to be a team effort involving immediate Supervisors, Department Heads, Administrative Assistants, Staff Assistants, employees, all who are concerned in accountability. Annual physical inventories for each Department should take place at the end of a fiscal year (September) before the Audit. A Fixed assets physical inventory is required every two years, prior to September.” Cause: Not assigning responsibility for physical counts to a select few individuals (a “count team”) and not properly planning/scheduling the complete physical count event. Effect: Not performing physical counts of capital assets puts the University at a higher risk of material misstatement of the financial statements, a higher risk of being under or over insured, and a higher risk of undetected asset misappropriation. This is also a violation of the Office of Management Budget’s (OMB) Uniform Guidance. Therefore, this finding will be reported in Part C of the Schedule of Findings and Questioned Costs. Recommendation: Adhere to the Accountability section of the University’s Procedural Manual – Fixed Asset & Inventory Control. The requirements of the OMB’s Uniform Guidance are already addressed in your currently adopted policies (A Fixed assets physical inventory is required every two years). Properly plan and execute the complete physical count. Update the property listing to reflect the complete physical count records. Make sure the property listing is clear and concise. Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.