Finding Text
Finding No. 2022-003
Federal Agency: U.S Department of Transportation
Assistance Listing Program: 20.106 Airport Improvement Program
Federal Award No.: 3-68-0001-023-2020
Area: Equipment and Real Property Management
Questioned Costs: $0
Criteria: In accordance with applicable equipment and real property management requirements, the Authority must comply with the following:
•Under 2 CFR section 200.313(d)(1), 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.
•Under 2 CFR section 200.313(d)(2), a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.
•Under 2 CFR section 200.313(d)(2), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated.
Conditions:
1.For 1 (or 100%) item tested, the Authority included description of the property, which is generic or limited (i.e., TO CAPITALISE THE NEW FIRE TRUCK) and related property records did not include serial number or identification number, federal award identification number, percentage of federal participation in the project costs for the federal award under which the property was acquired, and the location, use and condition of the property.
2.The Authority did not perform required physical inventory and reconciliation for all equipment and real properties acquired from Federal funds.
3.Furthermore, there is no control system to ensure adequate safeguards to prevent loss, damage, or theft of all equipment and real properties acquired from Federal funds.
Cause: The Authority lacks internal control policies and procedures over compliance with applicable equipment and real property management requirements.
Effect: The Authority is exposed to the risk of possible unauthorized use, misappropriation, and disposition of property without being noticed due to the lack of internal controls and proper supporting accounting records. No questioned costs are reported as we are unable to determine the quantitative impact to the program.