Finding Text
Program Information:
See the audit finding for chart/table
Criteria or specific requirement:
According to federal regulations, property records must be maintained to include a description of the property, a serial number or other identification number, the source of funding for the property, who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the program was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property. Further, a physical inventory of the property must be taken, and the results reconciled with the property records at least once every two years.
Condition/Context:
A physical inventory of equipment was not performed during fiscal year 2021 or in the prior year. There are no controls in place to ensure the inventory records are agreed to the capital assets ledger.
[X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness
Cause:
Lack of sufficient internal controls over physical inventory and property management may have contributed to this finding.
Effect:
Without a physical inventory of capital assets that agree to the general ledger, it is possible that assets could be misappropriated without detection or disposed of improperly.
Questioned Costs:
Due to lack of sufficient documentation, we were unable to determine questioned costs.
Repeat Finding:
Yes – 2020-006.
Recommendation:
A physical inventory should be conducted and reconciled to the general ledger and the capital asset listing at least every two years. Inventory records should include a description of the property, a serial number or other identification number, the source of funding for the property, 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.
Views of Responsible Officials and Planned Corrective Action:
Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.