Finding Text
Equipment and Real Property Management (Significant Deficiency ? Equipment Management) Condition: During our equipment testing procedures, we noted the equipment listing provided was incomplete and a physical inventory had not been performed since 2014. Criteria: The Uniform Guidance 2 CFR ?200.313 states that records for equipment acquired with federal funds and federally owned equipment shall be maintained and include a description of the property, the source of funding, 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, any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of all Federal equipment is required to be performed and results reconciled with the equipment records at least once every two years. Cause: Recent staff turnover in the department has hindered the City?s ability to keep equipment records up to date and track performance of physical inventories. Effect: Failure to maintain equipment records does not allow for proper tracking of equipment purchased with federal funds or proper disposition. Failure to perform physical inventories may create opportunity for fraud through misappropriation, damaged equipment may not be identified, and equipment may not be disposed of properly. Isolated Instance or Systematic Problem: Systematic problem. Repeat of Finding in the Immediately Prior Audit (with Prior Year Audit Finding Number (where applicable)): Yes ? 2021-002 Recommendation: The City should update the equipment records and ensure all equipment acquired with Federal funds is included on the listing and perform an inventory observation. The equipment listing should be maintained by several individuals in the event of any turnover and overseen by another member of management. We further recommend that management ensure that compliance with equipment is maintained within the department including updated lists and inventory observations as required.