Finding Text
2022-002 Department of Health and Human Services Federal Financial Assistance Listing #93.889, 22SC091990 National Bioterrorism Hospital Preparedness Program Equipment and Real Property Management Material Weakness in Internal Control over Compliance Criteria: 2CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.313(d)(1) requires 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 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. 2 CFR 200.313(d)(2) requires a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition: The following matters were identified during testing: a) No independent secondary level of review or approval is performed. One employee is involved in preparing, reviewing and approving information. Additionally, internal control procedures documented within Coalition?s Grant Management Policy have not been updated since departure of the Grant Management Director. b) Property records lack descriptive elements as required by 2 CFR 200.313(d)(1), including source of funding, acquisition date and cost. c) A physical inventory of equipment has not been performed within the last two years. Cause: The Coalition hasn?t formally adopted and implemented updated internal control procedures since departure of the Grant Management Director. Additionally, the Coalition was unaware of federal requirements pertaining to the descriptive elements of property records required and the completion of a physical inventory of property every two years. Effect: Without established controls over equipment and real property management, there is risk that equipment could be misappropriated, unallowable equipment purchases could be charged to the federal award and an increased risk federal agency wouldn?t be reimbursed if federal-funded equipment was disposed of. Questioned Costs: None reported. Context: There were three fixed asset purchases charged to the federal award within the fiscal year of which all were tested. Repeat Finding from Prior Year: No Recommendation: We recommend that management implement procedures and control processes to incorporate and document an independent review and approval over equipment compliance requirements, comply with property record requirements, and perform a bi-annual physical inventory of the equipment. Views of Responsible Officials: Management agrees with the finding.