Finding Text
2022-007 Department of Housing and Urban Development Federal Financial Assistance Listing #14.128 Section 242 ? Mortgage Insurance - Hospitals Equipment and Real Property Management Significant Deficiency in Internal Control Over Compliance and Noncompliance Not Considered Material Criteria: The OMB Compliance Supplement requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The Section 242 ? Mortgage Insurance - Hospitals Program requires an inventory of real property and equipment purchased with federal funds to be completed every two years. For the year ended July 31, 2021, the Organization failed to perform this inventory when the last had been performed for the year ended July 31, 2020. Cause: There was turnover of key financial personnel during 2022 and 2021. The Organization did not have an internal control policy to ensure the inventory of real property and equipment would be performed when there was a change in the individual responsible for ensuring the count occurred. Effect: The inventory or real property and equipment was not completed in accordance with requirements. Question Costs: None reported. Context/Sampling: None as there would only be one inventory performed. Repeat Finding from Prior Year: No Recommendation: We recommend that management should implement an internal control to make sure the inventory count is being performed despite any possible changes in staffing. Views of Responsible Officials: Management agrees with the finding.