Finding Text
Criteria: 2 CFR 200.313(d)(2) requires the non-Federal entity take a physical inventory of property and
reconcile the results with the property records at least once every two years. 2 CFR 200.313(d)(1) requires
“property records must be maintained that include a description of the property, a serial number or other
identification number, the source of funding for the property…”
Condition: The University did not complete a full physical inventory as required and did not complete a
reconciliation of the results to its property records. Additionally, the University did not have a fixed asset
tag on 3 equipment items.
Context: The University’s Fixed Asset Policy and related procedures require a periodic inventory of
property and equipment. In addition, each equipment item is required to have a unique identifier or a fixed
asset tag.
The University instructed its departments, via an organization-wide communication dated May 3, 2023, to
complete an inventory of their property and equipment by May 31, 2023. We noted that a physical inventory
was completed for 12 out of 21 departments during the fiscal year ended June 30, 2023. Additionally, a
physical inventory for two departments was completed subsequent to June 30, 2023. We further noted that
one equipment item acquired with federal awards was transferred to another university, however, the item
was improperly included in the University’s property records as of June 30, 2023.
In addition, we also selected a non-statistical sample of 5 equipment items to observe and noted 3 items
that did not have a unique identifier and were not properly tagged.
Cause: Although the University has policies and procedures in place over the physical inventory of property
and fixed asset tagging, there was a lack of diligence in complying with the policies and procedures.
Effect: Failure to perform physical inventory of property and reconcile the results with the property records
at least once every two years and failure to properly tag equipment items resulted in noncompliance with
the equipment and real property management requirement. Questioned Costs: None
Identification of a repeat finding: N/A.
Recommendations: We recommend the University be more diligent in complying with its established
policies and procedures for the physical inventory ensuring all departments timely complete the physical
inventory and reconcile the results with its property records. The University should also be more diligent
in ensuring its equipment items all have unique identifiers or are properly tagged.
Views of responsible officials: The HPU Business Office will initiate and ensure the completion and
reconciliation of the physical inventory of all fixed assets which were acquired using federal funds at least
every two years, to include the tagging of items in accordance with the university’s inventory and fixedasset
related policy.