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TOA audit finds DoH lacks a fixed assets register

Without it the department can lose sight of its tangible assets

Pago Pago, AMERICAN SAMOA — The Health Department’s controls relating to fixed assets “are insufficient and are functioning at marginal level.” So declared the Territorial Audit Office in its Performance Audit report of the more than $14 million in federal CARES Act funding awarded to DoH during the COVID pandemic.

TAO addressed “Fix Assets” under the “Other Matters” section of the review, and part eleven of the Samoa News report on the DoH audit looks at this issue of concern raised by auditors.

The auditors pointed to ‘Control Objective’, which is: “To ensure all fixed assets are identified, recorded and regularly verified.” Auditors focused on “Maintenance of a Fixed Asset Register and Physical Existence”.

The auditors said the review included a number of fixed assets acquired from CARES Act awards during the audited period. A spot check was carried out on December 01, 2022 by two audit staff with a member of DoH.

The audit inspection identified that the department does not maintain a fixed asset register and had not performed a department-wide physical inventory of fixed assets. And although some fixed assets are already inventoried, such assets were not fully reconciled.

“Based on our review, we found the department's controls relating to fixed assets are insufficient and are functioning at marginal level,” the auditors point out. “There is an indication that there may be a potential for loss as assets could go undetected.”

The audit identified that: fixed assets records were not reconciled and details of fixed assets on payment vouchers do not match details of fixed assets received nor located — for instance; hospital bedside cabinets— order not complete and different specs were given instead.

Furthermore, the audit identified a supply of air conditioning units valued at close to $47,000 were installed at the Fatuoaiga quarantine site and could not determine whether the ownership is still under DoH. “We have not seen an agreement to that effect,” it says.

TAO suggested that DoH should have requested the ASG’s Property Management Office for a complete listing of the department’s fixed assets and carried out a verification to ensure all fixed assets or some still exist and are in good condition.

As to why this finding matters, TAO explained that without a fixed asset register or a well-organized listing, the department can lose sight of its tangible assets. Physical verification is the primary responsibility of the management. Some improvements are necessary and if weaknesses continue without attention, these will escalate to an unacceptable status.

“We strongly recommend that a fixed asset register be maintained either in an excel spreadsheet, Word document or both,” TAO said and noted that a physical verification is essential to ensure the accuracy of fixed assets maintained.

In addition, if fixed assets are not adequately tracked and inventoried, loss or misappropriations may go undetected. And DoH shall ensure that physical inventory is reconciled to fixed asset records, investigate all inventory variances and correct inventory records to accurately reflect the current on-hand quantities.

In its response, DoH management concurs to the finding and the recommendation. DoH said its Logistics Division will work closely with the Office of Property Management on consolidating all inoperable fixed assets and update the register for current and new fixed assets.