Finding Text
Criteria and Condition: The Foreign Market Development Cooperator Program requires equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every two years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained.
Context: A nonstatistical test of the 7 equipment and real property selections revealed that the 3 were not properly reconciled to the equipment records during the semiannual inventory counts at a USSEC
international office location. These 3 selections were recorded twice on the equipment listing. The errors in the listing was an error in maintaining proper records and did not include duplicate funds being received for the equipment purchase.
Cause: The physical inventory of equipment properly occurred twice during 2023, but the individual performing the physical inventory did not do so with diligence, resulting in the equipment records not being properly reconciled with the results of the physical inventory.
Questioned Cost: $-0-
Effect: The effectiveness of the physical inventory of equipment relies on the individual performing the count. The lack of a diligent and accurate reconciliation of equipment during a physical inventory can result in inaccurate equipment records.
Recommendation: We recommend that USSEC management provides stronger oversite of the physical inventories and equipment reconciliations that occur at remote office locations to ensure individuals performing the counts are doing so with diligence.
Classification: Compliance finding and control deficiency in internal controls.
View of Responsible Officials and Planned Corrective Actions: USSEC will ensure stronger oversight of fixed asset inventories and reconciliation processes.