FAC Explorer

Audit 22994

FY End
2022-12-31
Total Expended
$130.19M
Findings
2
Programs
2
Organization: Southeastern Electric Cooperative (SD)
Year: 2022 Accepted: 2023-04-26
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
26251 2022-002 Significant Deficiency - ABG
602693 2022-002 Significant Deficiency - ABG

Programs

ALN Program Spent Major Findings
10.850 Rural Electrification Loans and Loan Guarantees $128.76M Yes 0
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $1.43M Yes 1

Contacts

Name Title Type
E7YMVCB28565 Jon Wunder Auditee
6057598302 Stacey Nelson Auditor
No contacts on file

Notes to SEFA

Title: Continuing Compliance Requirements Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Cooperative does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The Cooperative has unpaid RUS loans with continuing compliance requirements. Expenditures reported in this schedule consist of the beginning of the year outstanding loan balance plus advances made on the loan during the year. The outstanding balance at December 31, 2022, was $125,017,830.
Title: Basis of Presentation Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Cooperative does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal award activity of Southeastern Electric Cooperative, Inc. (the Cooperative) under programs of the federal government for the year ended December 31, 2022. The information is presented in accordance with the requirements of Title 2U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Cooperative, it is not intended to and does not present the balance sheet, statements of operations, equities, or cash flows of the Cooperative.
Title: Disaster Grants Public Assistance Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. When applicable, such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Cooperative does not draw for indirect administrative expenses and has not elected to use the 10% de minimis cost rate. Per the OMB Compliance Supplement, nonfederal entities must record expenditures on the schedule of expenditures of federal awards when FEMA has approved the entitys project worksheet. Of the total expenditures included in the schedule, expenditures of $15,934 were incurred in prior fiscal years. These expenditures were approved for payment by the federal agency in 2022 and therefore are included in the schedule when approved.

Finding Details

Finding 2022-002
2022-002 Department of Homeland Security, State of South Dakota Office of Emergency Management, 97.036, 4440DR-SD-116955 Disaster Grants ? Public Assistance Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Matching Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Equipment costs were claimed for reimbursement and match that used the 2019 FEMA equipment rates for combination rate vehicles instead of the applicable 2017 FEMA equipment rates for combination rate vehicles. In addition, the Cooperative submitted equipment costs for reimbursement and match that duplicated usage of certain vehicles. Cause: The Cooperative recognized that 2017 FEMA equipment rates applied to the project, but failed to update the applied 2017 FEMA equipment rates to vehicles with more than one rate (i.e. truck with bucket attachment). An incorrect formula in the Cooperative?s summary of equipment costs spreadsheet caused some equipment costs to be erroneously duplicated. Effect: The Cooperative?s control process and procedures did not detect or correct the errors. Concerning the amount of equipment costs relating to incorrect FEMA rates, the Cooperative initially claimed an additional $1,431 for reimbursement and 25% match of $477. Concerning the duplication in usage costs of equipment, the Cooperative initially claimed an additional $7,956 for reimbursement and 25% match of $2,652. Once the errors were identified, a revised claim was calculated and submitted for reimbursement. Questioned Costs: No questioned costs over $25,000. Context/Sampling: Nonstatistical sampling was used. Sample size was 60 transactions which accounted for $681,043 out of $1,908,126 of federal program expenditures of which $1,431,095 was submitted for reimbursement and $477,032 was considered the 25% matching portion. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative review the process over tracking equipment costs to ensure accuracy of future costs submitted for reimbursement. Views of Responsible Officials: Management agrees with the finding.
Finding 2022-002
2022-002 Department of Homeland Security, State of South Dakota Office of Emergency Management, 97.036, 4440DR-SD-116955 Disaster Grants ? Public Assistance Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Matching Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: Equipment costs were claimed for reimbursement and match that used the 2019 FEMA equipment rates for combination rate vehicles instead of the applicable 2017 FEMA equipment rates for combination rate vehicles. In addition, the Cooperative submitted equipment costs for reimbursement and match that duplicated usage of certain vehicles. Cause: The Cooperative recognized that 2017 FEMA equipment rates applied to the project, but failed to update the applied 2017 FEMA equipment rates to vehicles with more than one rate (i.e. truck with bucket attachment). An incorrect formula in the Cooperative?s summary of equipment costs spreadsheet caused some equipment costs to be erroneously duplicated. Effect: The Cooperative?s control process and procedures did not detect or correct the errors. Concerning the amount of equipment costs relating to incorrect FEMA rates, the Cooperative initially claimed an additional $1,431 for reimbursement and 25% match of $477. Concerning the duplication in usage costs of equipment, the Cooperative initially claimed an additional $7,956 for reimbursement and 25% match of $2,652. Once the errors were identified, a revised claim was calculated and submitted for reimbursement. Questioned Costs: No questioned costs over $25,000. Context/Sampling: Nonstatistical sampling was used. Sample size was 60 transactions which accounted for $681,043 out of $1,908,126 of federal program expenditures of which $1,431,095 was submitted for reimbursement and $477,032 was considered the 25% matching portion. Repeat Finding form Prior Year: No Recommendation: We recommend the Cooperative review the process over tracking equipment costs to ensure accuracy of future costs submitted for reimbursement. Views of Responsible Officials: Management agrees with the finding.