Finding 7701 (2023-003)

#2023-003 FINDING: Equipment and Real Property Management Federal Programs Affected: Head Start/ALN #93.600 Compliance Requirement: Equipment and Real Property Management Questioned Costs: No known or likely questioned costs exceeding $25,000. Condition and Cause: The Organization did not have a process to ensure all federal equipment purchases were on the depreciation schedule. Criteria and Effect: Property records must be maintained for equipment acquired under a federal award. Repeat Finding from Prior Year: N/A Recommendation: Purchases of property and equipment exceeding $5,000 with a useful life greater than one year should be capitalized and added to the deprecation schedule. Projects not yet completed at year-end should be added into construction in progress. For proper controls surrounding equipment and real property management, processes should be developed to ensure all federal property purchases are included in the depreciation schedule. Views of Responsible Officials: See Organization’s Corrective Action Plan