Finding Text
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance
Federal Agency: U.S. Department of Defense
Federal Program Name: Conservation and Rehabilitation of Natural Resources on Military Installations
Assistance Listing Number: 12.005
Federal Award Identification Number and Year: H79TI083313 - 2020
Award Period: September 28, 2020, through September 27, 2025
Criteria or specific requirement: 2 CFR 200.313(d)(2) states that a physical inventory of property must be taken and the results reconciled with the property record at least once every two years.
Condition: During testing, it was noted that a physical inventory and reconciliation with the property records had not been performed.
Questioned costs: None.
Context: A sample of 4 was made from a population of 4 pieces of equipment purchased with funds from the major program (entire population). Of the 4 sampled, all belonged to a population of assets that had not been part of a formal physical inventory and property reconciliation.
Cause: The Organization does not currently have procedures in place to perform a formal inventory count and reconciliation with the property records at least once every two years.
Effect: Without periodic equipment counts, the Organization is in noncompliance with federal regulations around Equipment and Real Property Management. In addition, there is an increased risk of errors and inaccuracies in the inventory records and an increased risk of fraud or theft going undetected.
Repeat Finding: No.
Recommendation: CLA recommends that the Organization adopt policies and procedures that include performing a formal inventory count and reconciliation back to the property records at least once every two years, in compliance with 2 CFR 200.313(d)(2). The inventory count should be documented and signed by the individual performing the count as a form of attestation to the amounts recorded.
Views of responsible officials: There is no disagreement with the audit finding.