Finding Text
Finding #2022-001 ? Significant Deficiency and Other Noncompliance Applicable federal program: U. S. Department of Health and Human Services Passed through Houston-Galveston Area Council Child Care and Development Block Grant/Child Care Mandatory and Matching Funds of the Child Care and Development Fund Assistance Listing #: 93.575/93.596 Contract Numbers: 301-22, 301-23 Contract Years: 10/01/21 ? 09/30/22, 10/01/22 ? 12/31/22 Criteria: Special Tests and Provisions ? CFC?s contract with Houston-Galveston Area Council requires that any equipment or real property purchased with grant funds with an acquisition cost of $1,500 or more be recorded, described, tagged, and monitored as to condition and disposition. Additionally, no less than once a year, a physical inventory of these items is to be conducted. Condition and context: During the audit, we noted that the most recent inventory list was dated in 2020 and that no physical inventory was performed in 2021 or in 2022 in accordance with CFC?s written policies and procedures. This finding is a repeat of prior year finding #2021-005. Cause: CFC is not adhering to its written fixed asset and inventory policies. Effect: Failure to adequately establish and maintain effective internal controls over inventory results in being out of compliance with contract requirements. Recommendation: Re-emphasize CFC?s policies and procedures related to equipment and real property purchased under the contracts. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.