Finding Text
Finding Number: 2022-002 Agency: U.S. Department of Health and Human Services Administration of Children and Families Federal programs: Head Start Head Start Disaster Assistance CFDA: 93.600 93.356 Compliance requirement: Equipment and Real Property Management Category: Internal Control / Compliance Questioned Costs: None Repeat finding: No Condition: During our audit procedures, we noted that two items were not included in the property records according to internal control procedures of the entity and federal program requirements. Criteria: 45 CFR 75.320 (d) (1) requires that property records must be maintained including 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. Cause: Management inadvertently did not capitalize two property items and as a result were not included in the property records either. Effect: The completeness of property records is compromised and therefore a non-compliance with property federal requirements. Recommendation: We strongly recommend management to analyze the acquisitions of equipment in order to ensure proper classification of books. Also, after recording assets on books, property records should be reconciled monthly including all other the required information and description required by federal regulation.