Finding Text
Finding No.: 2022-003 Federal Agency: U.S. Department of Transportation Assistance Listings Program: 20.106 Airport Improvement Program Award Numbers: All AIP Grants Area: Equipment and Real Property Management Questioned Costs: $-0- Criteria: In accordance with applicable equipment and real property management requirements, a State must use, manage and dispose of equipment acquired under a Federal award by the State in accordance with State laws and procedures. (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 federal award identification number), 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 of the property; (2) A physical inventory of the property must be taken and the results reconciled with the property records annually. Condition: Tests of equipment and real property noted the following: 1. CPA performed a capital assets inventory during fiscal year 2022. Based on controls testing, a reconciliation was performed at the department level; however, it was not reconciled with accounting records, resulting in $1,824,424 that were identified as not program assets. Total fixed asset additions capitalized and related to CPA?s major program, is as follows: See Schedule of Findings and Questioned Costs for chart/table 2. The fixed assets schedule did not include information such as who holds title and the use of the assets. Of nine items (or 10%) tested of a total population of eighty-nine FAA-funded capital assets, we noted deficiencies, as follows: 3. One item (or 11%) has been unidentified, and management was not able to substantiate the existence of the actual fixed asset. It also has outlived its 20-year life expectancy. See Schedule of Findings and Questioned Costs for chart/table Cause: CPA lacks oversight responsibility and monitoring controls over compliance with equipment and real property management requirements. Effect: CPA is in noncompliance with applicable equipment and real property management requirements. No questioned costs are presented as we are unable to quantify the extent of noncompliance. Identification as a Repeat Finding: Finding 2021-002. Recommendation: CPA should reconcile the results of the annual physical inventory to the property records and ascertain that the acquisition costs of the individual assets agree to the records of accounting. Further, sufficient details should be included in the fixed assets subledger to specifically identify the individual assets. Views of Responsible Officials: Management states agreement. Refer to separate Corrective Action Plan.