1. Ensuring Compliance Part 1 JAQUELINE REESE AND RICHARD SHEAFFER | MAY 12, 2014

2. To remind participants of federal rules regarding Equipment Inventory To provide scenarios to discuss compliance with rules regarding Equipment Inventory Objectives 2

3. Equipment Inventory 3

4. The Problem Requirement Solutions Scenarios 4

5. The Problem Equipment Inventory The subgrantee is not maintaining adequate property records and/or has not conducted and documented a physical inventory of equipment within the past two years. 5

6. Requirements Equipment Inventory 44 CFR Part 13.32 (d) Management requirements. Procedures for managing equipment (including replacement equipment) whether acquired in whole or in part with grant funds, until disposition takes place will, as a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of property, who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. 6

7. Requirements Equipment Inventory 44 CFR Part 13.32 (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. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft shall be investigated. 7

8. Requirements Equipment Inventory 44 CFR Part 13.32 (d) (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the grantee or subgrantee is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. 8

9. Requirements Equipment Inventory EMHSD Grant Agreement Identifies the requirement to maintain property records Requires that the subgrantee must supply a copy of this inventory within 30 days of the end of the subgrantee’s fiscal year to the Emergency Management and Homeland Security Division Audit Unit. OMB Circular A-133 Compliance Supplement, Part 3, Section F 9

10. Solutions Equipment Inventory 1. Maintain an equipment inventory in compliance with 44 CFR 13.32 (d). Use your own inventory documentation as long as it includes all elements of 44 CFR 13.32. Use EMHSD equipment tracking sheet. 10

11. Solutions Equipment Inventory 2. Perform a physical inventory at least every two years and maintain documentation until three years after disposition, replacement or transfer pursuant to 44 CFR 13.42 (c) (2): (2) Real property and equipment records. The retention period for real property and equipment records starts from the date of the disposition, or replacement, or transfer at the direction of the awarding agency. 11

12. Solutions Equipment Inventory Important-The requirement to maintain inventory and disposition records is different/separate than the requirement to maintain books and records until three years after the close of the grant. If the fiduciary changes, obtain copies of current/prior equipment inventories. It will be important for the Regional Board and Fiduciary to identify responsibilities for maintaining records and conducting physical inventories. 12

13. Scenarios Equipment Inventory 1.The 2006 HSGP grant award closeout was 3/28/11. Region 99 purchased $85,524.00 worth of equipment that is being maintained on an equipment inventory list. There are not any outstanding audits or litigation. When may the region dispose of the non-equipment books and records? When may the region dispose of equipment inventory and disposition records? 13

14. Scenarios Equipment Inventory 2. Following is a sample equipment inventory: Bomb Response Vehicle VIN 12345678 Cost $125,455.00 Date of acquisition: 6/7/09 Thermal Imaging Camera Serial # RB876 Cost $10,329.00 Date of acquisition: 3/14/09 Deployment Trailer Serial # 912AC Cost $24,100.00 Date of acquisition: 10/5/09 Is this equipment inventory listing acceptable? Why or why not? 14

15. Scenarios Equipment Inventory 3. Region 19 changed fiduciary from the County of Anderson to Cloud County beginning with the FY 2012 HSGP grant award. The region has purchased equipment each year since the FY 2006 HSGP grant award. During 2014, the Office of Inspector General begins an audit of the 2010-2012 grant awards. Who is responsible for the equipment inventory? Provide an explanation. 15

16. Questions Jacqueline Reese, Audit ManagerRichard Sheaffer, Auditor Phone 517-324-2330 Phone 517-333-4624 Email: reesej@michigan.govEmail: sheafferr@michigan.govreesej@michigan.govsheafferr@michigan.gov 16