Finding Text
Finding No. 2022-011
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing No. and Title: 93.600 Head Start; 93.600 COVID-19 Head Start
Area: Equipment and Real Property Management
Questioned Costs: $165,367
Criteria:
§ 2 CFR 200.313(b) provides that a state must use, manage and dispose of equipment acquired under a Federal award by the state in accordance with state laws and procedures.
PSS Rules and Regulations § T60-20-815 Inventory Requirements Section (c)(1) provides that a fixed asset at its inception shall be assigned to one individual, who will be responsible for the care and maintenance of the specified fixed asset. The employee, who is in direct control of the fixed asset (not the supervisor of the employee), and who is using the fixed asset, shall sign for the fixed asset. Refusal to sign as the custodian of a fixed asset shall prohibit the employee from custody of the fixed asset.
The 2022 OMB Compliance Supplement page 4-93.600-9 provides that property records must be maintained for equipment acquired under a federal award 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.
Condition:
For 5 (or 100%) of 5 equipment transactions tested, aggregating $165,367 of $176,733 in total amount of equipment costs as of September 30, 2022, no evidence of custodian signature at inception of the fixed asset was provided. However, printed copies of the property master information record from the JD Edwards system were signed and dated by the custodian and a verifier as evidence of the most recent physical inspection in September 2022.
See Schedule of Findings and Questioned Costs for chart/table.
Cause:
PSS’ existing fixed asset management policies are insufficient to ensure proper management of equipment and real property.
Effect:
PSS is in noncompliance with applicable equipment and real property requirements. The reportable questioned cost is $165,367.
Recommendation:
PSS should improve its existing fixed asset management policies to align with the Federal requirements on equipment and real property management. The Office of Procurement and Supply should consider developing standard forms and templates that can be used to document compliance with recordkeeping, custodianship, and physical count policies.
Views of responsible officials:
PSS agrees with the finding and describes corrective actions in the PSS Corrective Action Plan.