Finding Text
2024-007 (2023-012) – EQUIPMENT AND REAL PROPERTY MANAGEMENT
Type of Finding: (E) Material Weakness in Internal Control Over Compliance of Federal Awards and (G) Instance of Non-compliance related to Federal Awards
Funding Agency: U.S. Department of Transportation
Title: Airport Improvement Program
AL #: 20.106
Award #: 3-35-0039-031-2024, 3-35-0039-027-2022, 3-35-0039-028-2022, 3-35-0039-029-2023
Award Period: May 1, 2024 – January 1, 2025, December 13, 2021 – December 13, 2025, June 24, 2022 – June 24, 2026, July 3, 2023 – July 7, 2027
Questioned Costs: None
Statement of Condition
The County was not able to provide a complete and accurate equipment listing tracking items purchased with federal funding nor did the County conduct a physical inventory identifying federal assets.
Management’s Progress Toward Prior Year Corrective Action Plan: There was no progress made in the year ended June 30, 2024.
Criteria
Per 2 CFR 200.303(a), 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Per 2 CFR 200.313(d)(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and 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 sale price of the property.
Per 2 CFR 200.313(d)(2), a physical inventory of program property must be taken and the results reconciled with the property records at least once every 2 years.
Cause
The County is not following policy and procedures to ensure that equipment purchased with federal funds is maintained and tracked and the County performing a physical inventory at a minimum of every two years.
Effect
The County could dispose of or lose federally funded equipment without following federal guidelines.
Recommendation
The auditor recommends the County enhance the design of its control activities and policies and procedures should be developed to ensure physical inventories are taken at least once every two years and that the County creates a tool to assist in tracking and maintaining equipment purchased with federal funds.