KENTUCKY STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED) YEAR ENDED JUNE 30, 2024
Section III – Findings and Questioned Costs – Major Federal Programs (Continued)
2024 – 010 – Capital Asset Inventory Documentation
Federal Agency: US Department of Agriculture
Federal Program Name: Extension Services at 1890 Colleges
Assistance Listing Number: 10.512
Federal Award Identification Number and Year: NI201444XXXXG008-0005
Award Period: July 1, 2023 – June 30, 2024
Type of Finding:
Material Weakness in Internal Control over Compliance
Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Regardless of whether equipment is acquired in part or its entirety under the federal award, the recipient or subrecipient must manage equipment. A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years and a control system must be in place to ensure safeguards for preventing property loss, damage, or theft. Any loss, damage, or theft of equipment must be investigated. The recipient or subrecipient must notify the Federal agency or pass-through entity of any loss, damage, or theft of equipment that will have an impact on the program. Additionally, reconciliation to property records and safeguarding of equipment are requirements under (2 CFR 200.313 (d)(2) and (3)).
Condition: The University did not have documentation of inventory of federal funding being completed every two years as well as documentation supporting the safeguard of assets, nor was the auditor able to reconcile to property records or physically inspect the equipment.
Questioned costs: None
Context: During testing of property and equipment it was noted that none of the eight sample selections tested had been inventoried and no physical documentation supporting the property is appropriately safeguarded and maintained.
Cause: The University did not have controls in place that comply with the federal regulations around inventory taking and safeguard keeping.
Effect: The University is not in compliance with federal regulations around inventory taking and safeguard keeping. Failure to perform these procedures increases the risk of inaccurate property records, misstatement of federal award expenditures, and potential loss or misuse of federally funded equipment.