Finding Text
2021-002 – Equipment and Real Property Management (NC/SD)
Federal Program Title: Equitable Sharing Program
Federal Catalog Number: 16.922
Federal Agency: U.S. Department of Justice
Category of Finding: Equipment and Real Property Management
Criteria: Pursuant to the Office of Management and Budget (OMB) 2 CFR Part 200, Appendix XI,
Compliance Supplement July 2021 Part 4 16.922 Equitable Sharing Program (page 16.922-2), property
purchased with equitable sharing funds, or obtained for official use, is subject to inventory control, log
maintenance, and disposal requirements.
Condition: During our audit, we noted that the City did not maintain a log of equipment acquired with
ESP funds. The City has not performed a physical inventory of equipment at least since 2019.
Cause: Lack of appropriate control over equipment acquired with ESP funds, mainly due to turn-over in
City personnel.
Effect or Potential Effect: Equipment acquired with ESP funds may have been utilized for purposes
not in accordance with the program’s objectives. If a piece of equipment was disposed, the City would
not be able to comply with disposal requirements.
Questioned Cost: None.
Context: We inquired with City personnel who are directly responsible for the program. They were not
aware of an equipment log maintained by the City or a physical inventory of equipment during fiscal year
2021.
Statistical Sampling Validity: Not applicable. No sampling was performed.
Repeat of a Prior-Year Finding: Yes.
Recommendation: The City should design and establish internal controls over equipment acquired using
federal funds, which should include:
1) Tracking of equipment purchases which should include the asset ID
2) Physical inventory of equipment, including tagging of the assets
3) Formal procedures for disposal of equipment purchased with federal funds
4) Consider converting to a computerized asset management system
5) Purchases of equipment should be approved and supporting documentation should be retained
for all items.
Management Response and Corrective Action Plan
City’s Response: The City Concurs with the finding. Staff responsible for this control during FY
2021 are no longer employed by the City.
Corrective Action Plan: Current City staff will begin a physical inventory of fixed asset to ensure
documentation assets are identified by the associated funds with which they were purchased.