Finding Text
Finding Reference Number: SA 2022-006 Equipment Management
AL Number: 14.218
Assistance Listing Title: CDBG - Entitlement Grants Cluster –
Community Development Block Grants/Entitlement Grants
COVID-19 - Community Development Block Grants/Entitlement Grants-CV
Federal Agency: Department of Housing and Urban Development
Federal Award Identification Number: B-14-MC-06-0037, B-15-MC-06-0037, B-16-MC-06-0037, B-17-MC-06-0037, B-18-MC-06-0037, B-19-MC-06-0037, B-20-MC-06-0037, B-20-MW-06-0037, B-21-MC-06-0037
Criteria: 2 CFR 200.313(d)(1) require that property records must include a description of the property, a serial number or another identification number, the source of funding for the property (including the FAIN), the title holder, the acquisition date, the cost of the property, the percentage of the Federal agency contribution towards the original purchase, the location, use and condition of the property, and any disposition data including the date of disposal and sale price of the property. The recipient and subrecipient are responsible for maintaining and updating property records when there is a change in the status of the property.
In addition, a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)).
Condition: During fiscal year 2022, the City purchased equipment in the amount of $97,933, which is reflected in the City’s capital asset records. However, those records do not include an indication that the funding source was a federal grant. The City did not yet perform the physical inventory of the federally funded property, because the purchase occurred during fiscal year 2022.
Effect: The City is not in compliance with the property management provisions of 2 CFR 200.313(d)(1).
Cause: We understand City staff was not aware of the property records requirement to include the federal funding source. We also understand the capital assets the system has the capability to include such a designation, but it has not been utilized to date.
Recommendation: The City should develop procedures to ensure that equipment and other capital assets purchased in whole or in part with federal funds include an identification of the federal funding in compliance with the provisions of 2 CFR 200.313(d)(1). In addition, the City should ensure that procedures are in place meet the physical inventory requirements of 2 CFR section 200.313(d)(2).
View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.