Audit 304770

FY End
2023-06-30
Total Expended
$784.81M
Findings
2
Programs
14
Year: 2023 Accepted: 2024-04-26
Auditor: Davis Farr LLP

Organization Exclusion Status:

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Contacts

Name Title Type
CF3XG46HAWE8 Sandi Craig Auditee
6196996998 Jennifer Farr Auditor
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Notes to SEFA

Title: Scope of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: SANDAG did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal grant activity of SANDAG under federal government programs for the year ended June 30, 2023. The information in this schedule is presented in accordance with the requirements of Title 2 U.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 SANDAG, it is not intended to and does not present the financial position, changes in net position or cash flows of SANDAG.
Title: Scope of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: SANDAG did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance. SANDAG did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance.
Title: Basis of Accounting Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: SANDAG did not use the 10% de minimis indirect cost rate as covered in section 200.414 of the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards wherein certain types of expenditures are not allowable or are limited as to reimbursement. SANDAG utilizes local funds when federal funds are not received in a timely manner. Upon receipt of federal funds, SANDAG reimburses local funds that were utilized for expenditures for federal programs. Reimbursements are shown as credit balances in the Schedule. Expenditures incurred before a federal grant is executed are included on the Schedule in the year the grant was executed.

Finding Details

2 CFR 200.508 requires that proper internal controls are in place for the preparation of the Schedule of Expenditures of Federal Awards (SEFA), which must include the total federal awards expended and the Assistance Listing Number for each individual federal program. The auditors are required to determine whether the SEFA is stated fairly in all material respects in relation to the auditee’s financial statements as a whole. The auditors also utilize the SEFA for the determination of the major federal programs that will be audited. Condition During our audit, we became aware of a material misstatement in the SEFA due to an excluded federal program: the Transportation Infrastructure Finance and Innovation Act (TIFIA) Program with federal expenditures of $537,484,439 for the fiscal year ended June 30, 2023. Effect As a result of correcting the error in the SEFA, the TIFIA program was assessed for testing as a major program and met the criteria to require the program to be tested. Additionally, another major program that had already been selected and tested no longer was required to be tested as a major program. Cause The TIFIA program expenditures were new in the fiscal year ended June 30, 2023 and SANDAG’s system of internal controls did not identify the program as federal expenditures subject to the single audit requirements. Recommendation We recommend SANDAG enhance the system of internal controls for identification of federal awards subject to the single audit requirements and the preparation and review of the SEFA for accuracy and completeness.
2 CFR 200.508 requires that proper internal controls are in place for the preparation of the Schedule of Expenditures of Federal Awards (SEFA), which must include the total federal awards expended and the Assistance Listing Number for each individual federal program. The auditors are required to determine whether the SEFA is stated fairly in all material respects in relation to the auditee’s financial statements as a whole. The auditors also utilize the SEFA for the determination of the major federal programs that will be audited. Condition During our audit, we became aware of a material misstatement in the SEFA due to an excluded federal program: the Transportation Infrastructure Finance and Innovation Act (TIFIA) Program with federal expenditures of $537,484,439 for the fiscal year ended June 30, 2023. Effect As a result of correcting the error in the SEFA, the TIFIA program was assessed for testing as a major program and met the criteria to require the program to be tested. Additionally, another major program that had already been selected and tested no longer was required to be tested as a major program. Cause The TIFIA program expenditures were new in the fiscal year ended June 30, 2023 and SANDAG’s system of internal controls did not identify the program as federal expenditures subject to the single audit requirements. Recommendation We recommend SANDAG enhance the system of internal controls for identification of federal awards subject to the single audit requirements and the preparation and review of the SEFA for accuracy and completeness.