Finding Text
FINDING 2022-007
FEDERAL PROGRAM HEAD START (ASSISTANCE LISTING NO. 93.600) DEPARTMENT OF HEALTH AND HUMAN SERVICES
CATEGORY INTERNAL CONTROL-MATERIAL WEAKNESS
NONCOMPLIANCE EQUIPMENT AND REAL PROPERTY MANAGEMENT
CONDITIONS The Head Start Program is not maintaining adequate internal controls over property and equipment items acquired with Federal Funds. In testing property and equipment, we noted the following: The property records were not reliable because they did not include all the required information and they were incomplete or missing information.
CRITERIA 2 CFR 200.313 (d) and the 45 CFR 75.320 (d) establishes that procedures for managing equipment will, as a minimum, meet the following requirements:
(1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated.
CAUSE The Head Start Program has inadequate internal control procedures that guarantee adequate records, registering and safeguarding of property and equipment.
EFFECT Due to the lack of internal controls and property accounting records, we could not validate the accuracy and completeness of equipment and property-related reports.
RECOMMENDATION The Head Start Program must prepare a report including a full description of the assets, location, use, responsible person, cost, and any other pertinent data. In addition, the Program should establish a property control account and a subsidiary ledger to provide for the reconciliation of property.
QUESTIONED COSTS None
PRIOR YEAR 2021-004
VIEWS OF RESPONSIBLE
OFFICIALS AND PLANNED
CORRECTIVE ACTION The finding was corrected for future efforts related to the area of the property. A private company was hired to conduct the inventory. Appropriate seizures of disused equipment were carried out and an annual inventory of all existing equipment is being carried out, with ownership number, location and required information.
RESPONSIBLE PERSON Mr. Angel Vélez-Program Director
787-894-9191