Finding Text
Finding # 2022-002 (Repeat of 2021-002) Type: Material weakness over property records CFDA Number: 14.218/14.228 Community Development Block Grants/ Entitlement Grants Requirement: Equipment should be used in the program or project for which it was acquired, and all purchases of equipment and other capital assets with federal funds shall be approved, in advance and in writing, by the County. Condition/Context: Equipment capitalization approvals could not be substantiated, and property and equipment listings associated with federal funds were not reviewed. In addition, several adjustments were required to properly account for property and equipment. Cause: There are no formal policies for fixed asset capitalization and tracking method for federal funding source. Effect: Improper or inaccurate amounts could be paid or charged to contracts. Questioned Costs: None. Recommendation: We recommend developing appropriate controls to account for proper capitalization of fixed assets. Procedures should be put in place to ensure reviews are completed timely as well. Management Response: Management intends to develop a tracking mechanism and consider annual physical inventory of fixed assets.