Finding 507998 (2019-004)

Material Weakness Repeat Finding
Requirement
F
Questioned Costs
-
Year
2019
Accepted
2024-11-14

AI Summary

  • Core Issue: CHCC failed to conduct required physical inventories and maintain accurate property records for fixed assets, leading to noncompliance with federal and state regulations.
  • Impacted Requirements: Key documentation and reconciliation processes for equipment management were not followed, resulting in discrepancies and incomplete asset information.
  • Recommended Follow-Up: Establish a fixed asset team, provide training on compliance requirements, and ensure annual inventories and reconciliations are conducted to align with regulations.

Finding Text

Finding No.: 2019-004 Federal Agency: U.S. Department of Agriculture CFDA Program: 10.557 Special Supplemental Nutrition Program for Women, Infants and Children (WIC) Award Number: 7NM700NM5 Area: Equipment and Real Property Management Questioned Costs: $-0- Criteria: In accordance with 2 CFR Section 200.313(b), a State must use, manage and dispose of equipment acquired under a Federal award in accordance with State laws and procedures. The CNMI Property Management Policies states that equipment, whether acquired in whole or in part with grant funds, until disposition takes place will, at a minimum, meet the following requirements: • Description of the property. • Manufacturer’s serial and model numbers, federal stock number, national stock number, or other identification. • Acquisition source of the property, including grant or agreement number and method of procurement. • Whether title is vested with the CNMI or U.S. Government. • Acquisition date and cost. • Percentage (at the end of the budget year) of U.S. participation in the project or program for which the property was acquired. • Location, use, condition, and the date the information was reported. • Unit Acquisition Cost. • Date of disposal and sale price method used to determine fair market value where the CNMI compensates the agency for its share. Further, the Materials Supply Office (MSO) will conduct an annual inventory of property held by each Accountable Person as reflected in the master inventory control record. Further, MSO shall perform random audits of property held by each Accountable Person to validate the integrity of the property control process. Finding No.: 2019-004, continued Federal Agency: U.S. Department of Agriculture CFDA Program: 10.557 Special Supplemental Nutrition Program for Women, Infants and Children (WIC) Award Number: 7NM700NM5 Area: Equipment and Real Property Management Questioned Costs: $-0- Condition: Tests of program expenditures noted the following: 1. MSO did not perform a fixed asset physical inventory for fiscal year 2019. No physical inventory was performed in fiscal years 2018 and 2017. 2. Property records maintained by MSO were not provided. 3. Total fixed assets schedule per the Program did not agree to the general ledger details, resulting in a variance of $39,995. 4. A reconciliation was not performed between the Program and MSO. 5. The Program’s fixed assets schedule did not include required information such as whether title is vested with the CNMI or U.S. Government and the use of the assets. 6. Of five fixed assets tested for existence verification, aggregating $121,553 of a total population of $249,070, for one (or 20%), the vehicle with Property Tag Number FA-00375-US that was traded-in for another vehicle, for which was surveyed on 10/04/18, is still included in the Program’s fixed assets schedule as of 09/30/19. Cause: CHCC did not enforce compliance with applicable Equipment and Real Property Management requirements. Effect: CHCC is in noncompliance with applicable Equipment and Real Property Management requirements. No questioned cost is presented as we are unable to quantify the extent of the noncompliance. A summary of the program’s total capital outlays for FY 2019 was $39,995. Finding No.: 2019-004, continued Federal Agency: U.S. Department of Agriculture CFDA Program: 10.557 Special Supplemental Nutrition Program for Women, Infants and Children (WIC) Award Number: 7NM700NM5 Area: Equipment and Real Property Management Questioned Costs: $-0- Identification as a Repeat Finding: Finding No. 2018-008. Recommendation: CHCC should consider identifying a fixed asset team and provide training on applicable Equipment and Real Property Management requirements, including documentation requirements. The responsible personnel should coordinate and conduct the required annual physical inventories and should reconcile results to the property records in accordance with applicable Equipment and Real Property Management requirements. Views of Responsible Officials: CHCC’s Corrective Action Plan provides a detailed rationale of what resulted to the finding described in Condition 3; however, management did not provide comments for Conditions 1, 2 and 4 to 6.

Corrective Action Plan

Federal Agency: U.S. Department of Agriculture CFDA Program: 10.557 Special Supplemental Nutrition Program for Women, Infants and Children (WIC) Award Number: 7NM700NM5 Area: Equipment and Real Property Management Questioned Costs: $-0- Contact Persons: Perlie Santos, Chief Financial Officer; Marie Attao, WIC Program Manager; Cora Ada, Procurement Director Corrective Action: The discrepancy noted was also noted in 2018. The vehicle was delivered in FY 2018 (September), however the invoice was processed in FY 2019 (October), hence the manual Capital Assets listing was only updated. Proposed Completion Date: On-Going

Categories

Equipment & Real Property Management

Other Findings in this Audit

  • 507999 2019-005
    Material Weakness Repeat
  • 508000 2019-006
    Material Weakness Repeat
  • 508001 2019-007
    Material Weakness Repeat
  • 508002 2019-008
    Material Weakness Repeat
  • 508003 2019-009
    Material Weakness
  • 508004 2019-010
    Material Weakness
  • 508005 2019-011
    Material Weakness Repeat
  • 508006 2019-012
    Material Weakness Repeat
  • 508007 2019-013
    Material Weakness Repeat
  • 508008 2019-014
    Material Weakness
  • 508009 2019-015
    Material Weakness
  • 508010 2019-016
    Material Weakness Repeat
  • 1084440 2019-004
    Material Weakness Repeat
  • 1084441 2019-005
    Material Weakness Repeat
  • 1084442 2019-006
    Material Weakness Repeat
  • 1084443 2019-007
    Material Weakness Repeat
  • 1084444 2019-008
    Material Weakness Repeat
  • 1084445 2019-009
    Material Weakness
  • 1084446 2019-010
    Material Weakness
  • 1084447 2019-011
    Material Weakness Repeat
  • 1084448 2019-012
    Material Weakness Repeat
  • 1084449 2019-013
    Material Weakness Repeat
  • 1084450 2019-014
    Material Weakness
  • 1084451 2019-015
    Material Weakness
  • 1084452 2019-016
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.557 Wic Special Supplemental Nutrition Program for Women, Infants, and Children $3.68M
93.268 Immunization Cooperative Agreements $3.36M
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $1.97M
93.870 Maternal, Infant and Early Childhood Homevisiting Grant Program $865,589
93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (sed) $763,992
93.982 Mental Health Disaster Assistance and Emergency Mental Health $613,302
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $589,264
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $544,042
15.875 Economic, Social, and Political Development of the Territories $533,528
97.032 Crisis Counseling $501,942
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $494,660
93.994 Maternal and Child Health Services Block Grant to the States $452,851
93.236 Grants to States to Support Oral Health Workforce Activities $331,358
93.217 Family Planning Services $272,252
93.251 Universal Newborn Hearing and Screening $269,168
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $258,698
93.959 Block Grants for Prevention and Treatment of Substance Abuse $233,626
93.165 Grants to States for Loan Repayment $125,000
93.945 Assistance Programs for Chronic Disease Prevention and Control $120,169
93.917 Hiv Care Formula Grants $115,562
93.958 Block Grants for Community Mental Health Services $110,106
93.110 Maternal and Child Health Federal Consolidated Programs $89,729
93.644 Adult Medicaid Quality: Improving Maternal and Infant Health Outcomes in Medicaid and Chip $86,496
93.069 Public Health Emergency Preparedness $69,626
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $66,588
93.377 Prevention and Control of Chronic Disease and Associated Risk Factors in the U.s. Affiliated Pacific Islands, U.s. Virgin Islands, and P. R. $65,865
93.314 Early Hearing Detection and Intervention Information System (ehdi-Is) Surveillance Program $64,766
93.504 Family-To-Family Health Information Centers $63,569
93.788 Opioid Str $57,326
93.150 Projects for Assistance in Transition From Homelessness (path) $53,208
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $46,310
93.991 Preventive Health and Health Services Block Grant $39,096
93.889 National Bioterrorism Hospital Preparedness Program $32,585
93.073 Birth Defects and Developmental Disabilities - Prevention and Surveillance $16,318
97.088 Disaster Assistance Projects $12,625
10.855 Distance Learning and Telemedicine Loans and Grants $6,162
93.817 Hospital Preparedness Program (hpp) Ebola Preparedness and Response Activities $4,921
93.103 Food and Drug Administration Research $4,911
10.578 Wic Grants to States (wgs) $3,323
16.575 Crime Victim Assistance $1,379