Finding Text
2022-003: Evidence of physical inspection of equipment purchased with federal funds was not maintained ? Significant deficiencyCluster: Not applicableFederal Granting Agency: Health Resources and Services Administration (?HRSA?)Award Name: COVID-19 National Bioterrorism Hospital Preparedness Program (?Bioterrorism Program?)Award #: N/AAssistance Listing #: 93.889Award Year: Fiscal year 2022Pass-through entity: North Carolina Healthcare Foundation; North Carolina Department of Health and Human Services ? Division of Health Service Regulation, Office of Emergency Medical ServicesPass-through award #: U3REP 200659; 42705; 44024Condition:As part of our testing over the equipment compliance requirements related to the Bioterrorism Program, we noted no physical inventory of equipment performed by management that was purchased with federal funds since the inception of the grants in July 2019. Management has noted that routine maintenance checks are performed periodically on all equipment, however, we were unable to obtain management?s evidence of these checks for our 25 selections. At the end of the fiscal year, there were approximately 225 pieces of equipment with a value of approximately $800,000.Criteria:2 CFR 200.313 d(2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.Cause:Management?s process and controls do not include performing a formal physical inventory of federal equipment and retaining evidence of this process at least once every two years and management was not aware of this requirement.Effect:The Company may not maintain complete and accurate property records or safeguard equipment appropriately.Recommendation:We recommend the Company create a control and revise its process surrounding physical inventories of equipment to include a requirement that the inventory is completed in accordance with the criteria noted above. Additionally, a full inventory of all equipment should be performed as soon as practical.Management?s Views and Corrective Action Plan:Management?s views and corrective action plan is included at the end of this report after the summary schedule of prior audit findings and status.