Finding 404235 (2023-001)

Criteria: Non federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that property records must be maintained and include various information including, but not limited to, a description of the property, a serial number or identification number, the location, use and condition of the property, and any ultimate disposition data including the date of disposal (2 CFR section 200.313(d)(1). Further, 2 CFR section 200.313(d)(2) required that a physical inventory of the property must be taken and the results reconciled with the property records at least once every 2 years. When original or replacement equipment acquired under a federal award is no longer needed for a federal program, the non federal entity must request disposition instructions from the federal awarding agency if required by the terms and conditions of the award. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: 40 items of equipment were selected from all equipment acquired under federal awards from Lifespan’s property records and were physically inspected for safeguarding and proper maintenance. Of the 40 items selected, we noted 4 items could not be located by Lifespan or evidence that the items were properly disposed could not be provided in accordance with the requirements outlined above. Possible Asserted Cause and Effect: In each of the four instances, Lifespan did not follow appropriate processes, procedures and internal controls to timely and appropriately maintain accurate equipment records. Identification of Questioned Costs: Not determinable. Whether Sampling was Statistically Valid: The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that Lifespan review its current policies and procedures to ensure that equipment acquired under federal awards is appropriately inventoried and records are updated to ensure compliance with federal regulations. Views of Responsible Officials: Lifespan agrees with the finding as departments did not consistently follow its equipment tracking, storage, and disposal policies and procedures related to equipment purchased with federal funding. The following steps will be taken to address the finding: All departments of Lifespan will receive a notice from the Office of Research Administration that equipment tags, proper storage, and timely disposal of equipment are an integral part of the internal control process for capital assets. The Office of Research Administration communication will be sent to all impacted departments by July 15, 2024 and office hours will be made available for any departments that have questions. Contact: Lifespan Office of Research Administration: Daniel Bryant, Director Research Operations 401-444-6893. DBryant@lifespan.org Mindy Marshall, Director Grants and Contracts 401-444-4487. MMarshall6@lifespan.org Leslie Simone, Research Information Systems 401-444-8696. LVarone@lifespan.org. Expected Implementation: July 15, 2024