Finding 48243 (2022-003)

Finding No. 2022-003 Research and Development Cluster: U.S. Department of Defense: Improved Ventilation of the Edematous Lung, Assistance Listing 93.838 (award number: 1R01HL113577-01A1) Statistically valid sample: No and it was not intended to be. Repeat finding: This is a repeat finding from the prior year single audit report (finding no. 2021-002). Compliance Requirement ? Equipment and Real Property ? Significant Deficiency and Noncompliance Criteria Per guidance included in 2 CFR part 200.313, non-Federal entities other than States must follow regulations which require that: Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the Federal award identification number), who holds title, the acquisition date, cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, the non-Federal entity must establish and maintain an 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 statutes, regulations, and terms and conditions of the Federal award (2 CFR 200.303). Condition and Context Utilizing the listing of equipment additions provided by the Plant Fund manager, the Fixed Asset Specialist schedules a visit with the asset custodian to identify and tag the equipment. This process consists of affixing a barcode asset tag to the equipment. After tagging the equipment, the Fixed Asset Specialist will create an entry in Kuali. This entry will automatically generate a unique asset number in Kuali, for which, the Fixed Asset Specialist will then add all the required data related to that asset, including the tag number. We selected twenty-five pieces of equipment and noted for one selection, the asset?s tag was not included in the Kuali Asset Management System, therefore the property records were not accurate. Cause Management did not properly ensure that the tag number was included within fixed asset management system. Effect The University may not be able to properly identify equipment funded with federal awards to ensure proper inventorying, safeguarding, and maintenance. Questioned Costs There are no questioned costs associated with this finding as the equipment was within the University?s possession. Recommendation The University should strengthen its policies and procedures related to maintaining property records and tagging equipment. Views of Responsible Official Management agrees with the recommendation. The University will ensure that each individual fixed asset is appropriately tagged and that the information for the asset reconciles to the information reported in the Stevens Kuali Financial System. The Division of Finance has instituted an additional procedure to generate monthly asset tagging reports to address this issue and ensure that all assets are tagged in a timely manner. In addition, the Staff Accountant takes a picture of the asset tag for new assets which is attached to the supporting documentation in the Kuali Financial System. The Senior Accountant reviews the documentation for each asset and ensures that the appropriate asset tag is reflected in the Kuali Financial System. The Division of Finance engages an outside firm to conduct a complete physical inventory every two years. The Executive Director of Finance and Controller, the Senior Accountant and the Staff Accountant will ensure that all asset records are properly reflected in the Kuali Financial System.