Finding 499800 (2023-001)

FINDING 2023-001 Subject: Airport Improvement Program - Equipment and Real Property Management Federal Agency: Department of Transportation Federal Program: Airport Improvement Program, COVID-19 Airports Programs, and Infrastructure Investment and Jobs Act Programs Assistance Listings Number: 20.106 Federal Award Number and Year (or Other Identifying Number): 3-18-0082-050 Compliance Requirement: Equipment and Real Property Management Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 13 TERRE HAUTE REGIONAL AIRPORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Detailed capital asset records are to be maintained by the entity. The records should contain the equipment description (including serial number or other identification number), 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, location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. The Authority provided a capital asset list that only included the asset description and value amount. The listing did not include all the requirements as stated above. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, 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). . . ." 2 CFR 200.313(d) states in part: "Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, as a minimum, meet the following requirements: (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 FAIN), who holds title, the acquisition date, and 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 sale price of the property. . . ." Cause The Authority was unaware that they needed to maintain detailed capital asset records with requirements as stated above. Effect Without the proper implementation of an effectively designed system of internal controls, the Authority cannot ensure that all capital assets are being included in the records of the Authority. Questioned Costs There were no questioned costs identified. INDIANA STATE BOARD OF ACCOUNTS 14 TERRE HAUTE REGIONAL AIRPORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommended that the Authority's management strengthen its system of internal controls to ensure that they maintain detailed capital asset records that include all the requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.