Finding 853 (2023-001)

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Requirement
F
Questioned Costs
-
Year
2023
Accepted
2023-10-27
Audit: 1625
Organization: Billings Clinic (MT)
Auditor: Forvis LLP

AI Summary

  • Core Issue: Equipment records are incomplete; items lack identification numbers, and internal controls for safeguarding are missing.
  • Impacted Requirements: Non-compliance with OMB Circular A-110 and 2 CFR 200.313 regarding equipment tracking and maintenance.
  • Recommended Follow-Up: Tag all equipment, conduct a physical inventory, clarify ownership agreements, and establish an equipment management policy with training.

Finding Text

Finding: Equipment Management Program: Maternal and Child Health Federal Consolidated Programs Assistance Listing Number: 93.110 Criteria: OMB Circular A-110 and 2 CFR 200.313 (c) through (e) require equipment records be maintained to include identification numbers, source of funding, location and condition of property; a physical inventory of equipment shall be taken at least once every two years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Condition: We noted the following conditions in our testing of equipment management: a) Equipment records were not maintained in accordance to 2 CFR 200.313, in which equipment is not identifiable with serial numbers or tags. b) Internal controls were not in place to safeguard equipment at various locations. Questioned Costs: None. Context: Total equipment purchased in fiscal year 23 are in accordance with grant, however, testing was not possible to be performed as equipment records did not include tag numbers to identify individual equipment at the various locations. A manual listing was created by the grant manager during the audit that agreed to purchase records. Equipment was not capitalized within the general ledger system but rather expensed, as such, system records did not exist. Effect: Not being able to produce a comprehensive and complete listing of assets purchased with federal funds, not properly tagging assets and not implementing internal controls to safeguard assets increase the risk of loss of assets purchased with federal funds and prevents them from being adequately tracked and maintained. In addition, the potential of noncompliance with the rules and regulations surrounding disposition of assets increases if the assets have been improperly disposed. Identification as a repeat finding: Not applicable. Recommendation: We recommend the Organization tags all equipment as soon as possible and perform a physical inventory count in order to create a complete equipment listing within its asset management system. In addition, we advise for the client to create an agreement between Organization and location/holder of property that clarifies ownership as well as compliance requirements for equipment purchased with federal funds with respect to safeguarding and maintaining such equipment. We also recommend for the Organization to establish an equipment policy and train individuals receiving grants in the requirements associated with equipment management and federal compliance requirements. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.

Corrective Action Plan

CORRECTIVE ACTION PLAN AUDITOR FINDING: 2023-001 AREA: Equipment Compliance It was noted that (1) equipment records were not maintained in accordance to 2 CFR 200.313, in which equipment is not identifiable with serial numbers or tags; (2) internal controls were not in place to safeguard equipment at various locations. It is recommended for the Organization to tag all equipment and perform a physical inventory count in order to create a complete equipment listing within its asset management system. In addition, it is advised for the client to create an agreement between Organization and location/holder of property that clarifies ownership as well as compliance requirements for equipment purchased with federal funds with respect to safeguarding and maintaining such equipment. Lastly, for the Organization to establish an equipment policy and train grant managers in the requirements associated with equipment management and federal compliance requirements. CLIENT PLANNED ACTION: The Organization agrees with the finding. All equipment will be tagged in order to specifically identify it and alert that it was purchased with federal funds, and to aid in inventory control. A subaward document has been created that clarifies ownership, compliance requirements, and the need to safeguard and maintain equipment received. This will be presented to and signed by each organization who receives equipment purchased with federal funds through Billings Clinic. Grant managers that are in charge of purchasing equipment for other sites under the conditions of a federal grant, will be trained in the requirements associated with equipment management and federal compliance requirements. The grant manager will maintain an equipment list of all items with required information, including identifying number, location placed, etc. CLIENT RESPONSIBLE PARTY: Stephanie Fitch, Grant Manager COMPLETION DATE: October 1, 2023

Categories

Equipment & Real Property Management

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
93.498 Covid-19 Provider Relief Fund and American Resccue Plan (arp) Rural Distribution $18.67M
14.128 Mortgage Insurance_hospitals $10.62M
97.036 Covid-19 Disaster Grants - Public Assistance (presidentially Declared Disasters) $2.50M
93.110 Maternal and Child Health Federal Consolidated Programs $1.07M
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $269,904
93.958 Block Grants for Community Mental Health Services $230,307
93.353 21st Century Cures Act - Beau Biden Cancer Moonshot $216,988
93.395 Cancer Treatment Research $76,108
93.435 Innovative State and Local Public Health Strategies to Prevent and Manage Diabetes and Heart Disease and Stroke- $53,676
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $45,427
43.001 Science $22,002
16.588 Violence Against Women Formula Grants $-2,751