Finding 518006 (2024-002)

Equipment Management Grantor: Various Cluster: Research & Development Award Names: Various Award Numbers: Various Assistance Listing Number: Various Award Year: Various Criteria 2 CFR 200.313 (d)(1-2) indicates that a physical inventory of federal equipment must be taken and the results reconciled with property records at least once every two years. Additionally, accurate property records must be maintained which include various identifying information, such as the location, use and condition of the property and any ultimate disposition data, including the date of disposal and sale of the property. Condition In testing the Company’s conformity with the compliance requirements for equipment management, we selected 25 pieces of equipment from the detailed listings provided to physically inspect. Additionally, in order to test the completeness of the detailed listings, we selected 25 pieces of equipment from the “floor” and traced these to the detailed listings provided. Through our testing, we noted the following: • Two pieces of equipment out of the 25 selections made from the detailed listings for physical inspection were incorrectly included in the listings. o One asset was moved to another institution with the associated principal investigator. The asset was not included in the list of equipment approved for the transfer with the departure of the principal investigator. The department continued to certify the asset was in service after the transfer of the asset. The acquisition price of the asset was $6,023.36. o The second asset was acquired in 2008 and sold in 2023, at the direction of the principal investigator, with the proceeds of the sale allocated to a non-federal internal research fund. The department continued to certify the asset was in service after the disposal of the asset. Cause For the first asset that was improperly included in the detailed listing, two pieces of the same equipment were purchased together, and one of the two pieces of equipment was retained, which caused the department to inadvertently certify that both assets were still in service. Further, the asset was not included on the list of equipment approved for transfer with the principal investigator’s departure from the Company. For the second asset, the principal investigator in charge of the equipment is in the process of leaving the Company, and the department is moving or disposing of his equipment. The equipment management team was waiting until the Investigator’s space was completely cleared before updating the inventory listings. Effect The process around the transfer and/or disposal of equipment when there is a transfer of an award, or a transfer of the principal investigator is not properly reflected in the Company’s inventory records. Questioned Costs There are no questioned costs. Under the Federal Grant and Cooperative Agreement Act, 31 U.S.C. 6306, NIH permits institutions to obtain title to equipment for support of basic or applied scientific research without further obligation to the Federal government. NIH has the right to require transfer of title to equipment with an acquisition cost of $5,000 or more to the Federal government within 120 of the completion of the award. The associated award ended prior to FY24, so the title transfer period has expired. Therefore, the equipment disposal did not result in questioned costs. Recommendation We recommend that the Company provide additional training to the principal investigators and other grant personnel focusing on the policies and procedures around federal equipment management. Specifically, the training should emphasize the importance of accuracy in the disposal request forms, including federal funding. The training should also focus on the importance of timely updates to the equipment inventory listing to ensure the listing is complete and accurate. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.