Finding 50780 (2022-004)

Finding No: 2022-004 Equipment Federal Agency: National Science Foundation Assistance Listing Number: 47.070 Pass-through Entities: Georgia Institute of Technology and Indiana University Pass-through Award Numbers: AWD-001289-G1 and 9058 Program: Research and Development Cluster ? Computer and Information Science and Engineering Award Year: October 1, 2017 through September 30, 2020 (a) Criteria or Requirement Per 2 CFR 200.303, the non-Federal entity must establish and maintain 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 the terms and conditions of the Federal award. Effective internal controls should include establishing procedures to ensure equipment is identified and adequately safe-guarded. (b) Condition Found, Including Perspective The University conducts research and development activities utilizing equipment purchased with Federal funds in multiple locations. The University identifies all equipment in its property management records with individually assigned asset numbers. Each individual asset records includes the specific location of the asset, the account number of the Federal award which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with the underlying University policy. During our physical observation of 50 pieces of equipment purchased with Federal research and development funds, we noted that a tag was not affixed to one item sampled. (c) Possible Cause The University purchased the asset in August 2018 and the last inventory was performed on this equipment was in June 2021. The University overlooked tagging the inventory when purchased. (d) Questioned Cost None identified. (e) Effect Failure to maintain accurate property records results in noncompliance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the University strengthen controls to ensure property records are maintained in accordance with Federal and University policies including the tagging of individual items. (i) View of Responsible Officials Management concurs with the finding. It is the opinion of Property management that a tag was affixed to the asset at the time of purchase and initial placement. The existence of the tag and the asset was verified in June 2021. The tag has apparently fallen off. (j) Corrective Action Plan The University Property Department will affix a replacement new tag to the asset. Additionally, in the very near future, the University will transition to new, radio frequency FRID tags that are of a higher quality with a stronger adhesive backing. (k) Anticipated Completion Date November 30, 2022 for replacement tag to be affixed. (l) Name of Contact person for Corrective Action Robert Brown, Director of Purchasing: (251) 421-0153.