Finding Text
Finding 2024-001 – Equipment and Real Property Management — Material Weakness
Department of Health and Human Services
Research and Development Cluster
Department of Health and Human Services, National Institutes of Health, Assistance Listing No. 93.859 (Biomedical Research and Research Training)
Federal award year 2023-2024
Criteria: Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Also, in accordance with 2 CFR 200.313(d)(1), property records must be maintained that included a description of the property, a serial number or other identification number, the 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, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property.
In accordance with 2 CFR 200.313(d)(2), a physical inventory of equipment and property must be taken, and the results reconciled with property records at least once every two years.
Condition: The University’s controls were not operating effectively to reasonably ensure the University maintained property records with the above required information and performed the required physical inventory of equipment within the two previous years. As a result, the University did not comply with the compliance requirements for equipment and real property management.
Cause: The University does not have processes and procedures in place related to equipment management, tracking and required physical inventories.
Effect or potential effect: The University is not in compliance with federal grant requirements over the tracking and physical inventory of equipment. Improper equipment management procedures could result in actions taken by oversight agencies which could impact future funding.
Questioned costs: None
Context: The University has five pieces of qualified equipment with an aggregate cost of approximately $119,000. For all sample selections tested in the major program, there was no process of tagging and tracking equipment purchased with federal funding, nor was there any evidence that physical inventories had been performed.
Identification as a repeat finding, if applicable: Not applicable.
Recommendation: We recommend the University develop processes and procedures to tag and track the equipment purchased with federal funding, and maintain support that physical inventories were performed as required.
View of responsible officials: Management agrees with this finding. See corrective action plan.