FAC Explorer

Audit 318117

FY End
2023-12-31
Total Expended
$11.36M
Findings
6
Programs
1
Organization: Cvfiber (VT)
Year: 2023 Accepted: 2024-08-29
Auditor: Nathan Wechsler & Company

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
485392 2023-001 Material Weakness Yes P
485393 2023-002 Significant Deficiency - P
485394 2023-003 Material Weakness - A
1061834 2023-001 Material Weakness Yes P
1061835 2023-002 Significant Deficiency - P
1061836 2023-003 Material Weakness - A

Programs

ALN Program Spent Major Findings
21.027 Coronavirus State and Local Fiscal Recovery Funds $11.36M Yes 3

Contacts

Name Title Type
FBMQW6K71J91 Jennille Smith Auditee
8023168797 Callie Chase Auditor
No contacts on file

Notes to SEFA

Title: Note 1. Basis of Presentation Accounting Policies: Note 1. Basis of Presentation The Schedule of Expenditures of Federal Awards (“the Schedule”) includes the federal grant activity of CVFiber (the District), under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance. Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the District. Note 2. Basis of Accounting Expenditures reported on the Schedule are presented on the same basis of accounting as the District’s financial statements. The District uses the accrual basis of accounting. Expenditures represent only the federally funded portions of the program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Note 3. Program Costs The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs could be more than shown. Such expenditures are recognized following, as applicable, the cost principles in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements, wherein certain types of expenditures are not allowable or are limited to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The District expended on two federal programs during 2023. A detailed breakout follows: Federal Pass-Through Assistance Listing Identifying December 31, Number Number 2023 21.027 02240-FY22-Act71PreC-02 $ 2,766,359 21.027 02240-FY22-Act71Const-03 8,591,261 Total federal expenditures $ 11,357,620 Note 4. Major Programs In accordance with OMB Uniform Guidance, major programs are determined using a risk-based approach. Programs in the accompanying Schedule are determined by the independent auditor to be major programs.Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Note 6. Subrecipients No amounts expended and reported within the Schedule of Federal Awards were passed through to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Schedule of Expenditures of Federal Awards (“the Schedule”) includes the federal grant activity of CVFiber (the District), under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance. Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the District.
Title: Note 2. Basis of Accounting Accounting Policies: Note 1. Basis of Presentation The Schedule of Expenditures of Federal Awards (“the Schedule”) includes the federal grant activity of CVFiber (the District), under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance. Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the District. Note 2. Basis of Accounting Expenditures reported on the Schedule are presented on the same basis of accounting as the District’s financial statements. The District uses the accrual basis of accounting. Expenditures represent only the federally funded portions of the program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Note 3. Program Costs The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs could be more than shown. Such expenditures are recognized following, as applicable, the cost principles in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements, wherein certain types of expenditures are not allowable or are limited to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The District expended on two federal programs during 2023. A detailed breakout follows: Federal Pass-Through Assistance Listing Identifying December 31, Number Number 2023 21.027 02240-FY22-Act71PreC-02 $ 2,766,359 21.027 02240-FY22-Act71Const-03 8,591,261 Total federal expenditures $ 11,357,620 Note 4. Major Programs In accordance with OMB Uniform Guidance, major programs are determined using a risk-based approach. Programs in the accompanying Schedule are determined by the independent auditor to be major programs.Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Note 6. Subrecipients No amounts expended and reported within the Schedule of Federal Awards were passed through to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are presented on the same basis of accounting as the District’s financial statements. The District uses the accrual basis of accounting. Expenditures represent only the federally funded portions of the program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.
Title: Note 3. Program Costs Accounting Policies: Note 1. Basis of Presentation The Schedule of Expenditures of Federal Awards (“the Schedule”) includes the federal grant activity of CVFiber (the District), under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance. Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the District. Note 2. Basis of Accounting Expenditures reported on the Schedule are presented on the same basis of accounting as the District’s financial statements. The District uses the accrual basis of accounting. Expenditures represent only the federally funded portions of the program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Note 3. Program Costs The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs could be more than shown. Such expenditures are recognized following, as applicable, the cost principles in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements, wherein certain types of expenditures are not allowable or are limited to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The District expended on two federal programs during 2023. A detailed breakout follows: Federal Pass-Through Assistance Listing Identifying December 31, Number Number 2023 21.027 02240-FY22-Act71PreC-02 $ 2,766,359 21.027 02240-FY22-Act71Const-03 8,591,261 Total federal expenditures $ 11,357,620 Note 4. Major Programs In accordance with OMB Uniform Guidance, major programs are determined using a risk-based approach. Programs in the accompanying Schedule are determined by the independent auditor to be major programs.Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Note 6. Subrecipients No amounts expended and reported within the Schedule of Federal Awards were passed through to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs could be more than shown. Such expenditures are recognized following, as applicable, the cost principles in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements, wherein certain types of expenditures are not allowable or are limited to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The District expended on two federal programs during 2023. A detailed breakout follows: See the notes to the SEFA for chart/table instead.
Title: Note 4. Major Programs Accounting Policies: Note 1. Basis of Presentation The Schedule of Expenditures of Federal Awards (“the Schedule”) includes the federal grant activity of CVFiber (the District), under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance. Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the District. Note 2. Basis of Accounting Expenditures reported on the Schedule are presented on the same basis of accounting as the District’s financial statements. The District uses the accrual basis of accounting. Expenditures represent only the federally funded portions of the program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Note 3. Program Costs The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs could be more than shown. Such expenditures are recognized following, as applicable, the cost principles in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements, wherein certain types of expenditures are not allowable or are limited to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The District expended on two federal programs during 2023. A detailed breakout follows: Federal Pass-Through Assistance Listing Identifying December 31, Number Number 2023 21.027 02240-FY22-Act71PreC-02 $ 2,766,359 21.027 02240-FY22-Act71Const-03 8,591,261 Total federal expenditures $ 11,357,620 Note 4. Major Programs In accordance with OMB Uniform Guidance, major programs are determined using a risk-based approach. Programs in the accompanying Schedule are determined by the independent auditor to be major programs.Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Note 6. Subrecipients No amounts expended and reported within the Schedule of Federal Awards were passed through to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. In accordance with OMB Uniform Guidance, major programs are determined using a risk-based approach. Programs in the accompanying Schedule are determined by the independent auditor to be major programs.
Title: Note 5. Indirect Cost Rate Accounting Policies: Note 1. Basis of Presentation The Schedule of Expenditures of Federal Awards (“the Schedule”) includes the federal grant activity of CVFiber (the District), under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance. Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the District. Note 2. Basis of Accounting Expenditures reported on the Schedule are presented on the same basis of accounting as the District’s financial statements. The District uses the accrual basis of accounting. Expenditures represent only the federally funded portions of the program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Note 3. Program Costs The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs could be more than shown. Such expenditures are recognized following, as applicable, the cost principles in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements, wherein certain types of expenditures are not allowable or are limited to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The District expended on two federal programs during 2023. A detailed breakout follows: Federal Pass-Through Assistance Listing Identifying December 31, Number Number 2023 21.027 02240-FY22-Act71PreC-02 $ 2,766,359 21.027 02240-FY22-Act71Const-03 8,591,261 Total federal expenditures $ 11,357,620 Note 4. Major Programs In accordance with OMB Uniform Guidance, major programs are determined using a risk-based approach. Programs in the accompanying Schedule are determined by the independent auditor to be major programs.Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Note 6. Subrecipients No amounts expended and reported within the Schedule of Federal Awards were passed through to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Note 6. Subrecipients Accounting Policies: Note 1. Basis of Presentation The Schedule of Expenditures of Federal Awards (“the Schedule”) includes the federal grant activity of CVFiber (the District), under programs of the federal government for the year ended December 31, 2023. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget (OMB) Uniform Guidance. Because the schedule presents only a selected portion of the operations of the District, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the District. Note 2. Basis of Accounting Expenditures reported on the Schedule are presented on the same basis of accounting as the District’s financial statements. The District uses the accrual basis of accounting. Expenditures represent only the federally funded portions of the program. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. Note 3. Program Costs The amounts shown as current year expenditures represent only the federal grant portion of the program costs. Entire program costs could be more than shown. Such expenditures are recognized following, as applicable, the cost principles in the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, Audit Requirements, wherein certain types of expenditures are not allowable or are limited to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The District expended on two federal programs during 2023. A detailed breakout follows: Federal Pass-Through Assistance Listing Identifying December 31, Number Number 2023 21.027 02240-FY22-Act71PreC-02 $ 2,766,359 21.027 02240-FY22-Act71Const-03 8,591,261 Total federal expenditures $ 11,357,620 Note 4. Major Programs In accordance with OMB Uniform Guidance, major programs are determined using a risk-based approach. Programs in the accompanying Schedule are determined by the independent auditor to be major programs.Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Note 6. Subrecipients No amounts expended and reported within the Schedule of Federal Awards were passed through to subrecipients. De Minimis Rate Used: N Rate Explanation: Note 5. Indirect Cost Rate The Organization has not elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. No amounts expended and reported within the Schedule of Federal Awards were passed through to subrecipients.

Finding Details

Finding 2023-001
Finding Type: Material weakness in internal controls over financial reporting. Criteria: Management is responsible for the preparation of the financial statements and the Schedule of Expenditures of Federal Awards (SEFA). The District is responsible for maintaining complete and accurate financial records and the Schedule of Expenditures of Federal Awards should be prepared directly from those records. Conditions and context: The Schedule of Expenditures of Federal Awards presented for audit required multiple drafts. It was noted that accrued expenditures reported in the 2022 SEFA were included in the 2023 SEFA as well. Additionally, during testing it was noted expenditures that were accrued in 2023 were not included in the SEFA as they should be. This led to two material adjustments to the financial statements. During the audit it was noted that there were refunds for make ready expenses received during the year. Of these refunds, $10,499 pertained to costs previously reported on the 2022 SEFA. The total of $93,616 refunds received in 2023 were recorded as grant income rather than offsetting the appropriate 2023 expenses and were improperly recorded on the SEFA. Final reports to the governing agency did not tie to internal records as the District did not include these refunds in the reporting. Of the $93,616, approximately, $60,000 of refunds received had initially been expended under a grant that was fully expended during 2023. Instead of applying those refunds to the original grant, the District applied them to an open grant that was currently being expended. The District is required to receive written permission from the governing agency on the proper treatment of these funds. There was no permission noted during the audit. Cause of condition: The District does not have effective internal control over the preparation of the financial statements and the Schedule of Expenditures of Federal Awards. Effect of Condition: Potential understatement or overstatement of expenditures could exist in the financial statements and Schedule of Expenditures of Federal Awards and would not be detected and corrected. The District could receive refunds of federally awarded dollars and not use them for allowable expenditures under grant agreements. Recommendation: It is recommended that the District establish additional policies and procedures to ensure that all Federal awards are identified and reported accurately on the SEFA and are recorded in the correct period. There should be additional review after the preparation of the SEFA. It is recommended that the District receive documentation from the grantor on the best practices for the treatment of credits and refunds for federal expenditures. View of Responsible Officials and Planned Corrective Action: The SEFA was modified several times as a result of receiving vendor invoices up to May, 2024 for work completed in the audit period. In addition, vendors refunded make-ready costs which had been invoiced to a closed grant. We sought guidance from the grantor regarding proper accounting treatment of those refunds and, receiving none, recognized those refunds as revenue to be tracked against grant expenses. Corrective action includes approving invoices through the audit period and submitting the SEFA based on this information. Planned Implementation Date of Corrective Action: Ongoing Person Responsible for Corrective Action: Jennille Smith, Executive Director
Finding 2023-002
Finding Type: Significant deficiency in internal controls over financial reporting. Criteria: Management is responsible for maintain its accounting records in accordance with generally accepted accounting principles (GAAP). Conditions and context: It is important to perform a physical inventory count on a regular basis to confirm that recorded balances in the detailed inventory account reflect items actually on hand. On at least an annual basis, the District performs a physical inventory count. However, there are no written procedures documenting how inventory count should be performed. Cause of condition: The condition was caused by lack of oversight and misunderstanding around the inventory process. Effect of Condition: As a result of this condition, the District lacks internal controls over inventory. Recommendation: To ensure that the count is performed properly, and to use as a training tool for new staff, we recommend the District formalize and document procedures for performing a physical count of its inventory. View of Responsible Officials and Planned Corrective Action: Our inventory was tracked and managed by an outside consultant. Corrective action includes implementing an integrated inventory and accounting system and performing reconciliations of inventory reports to actual physical counts annually. Planned Implementation Date of Corrective Action: We are prepared for a year end reconciliation and physical count of inventory. These steps were put in place within the first quarter of 2024. Person Responsible for Corrective Action: Jennille Smith, Executive Director
Finding 2023-003
Federal Agency: U.S. Department of Treasury Award Name: Coronavirus State and Local Fiscal Recovery Funds Program Year: 2023 Assistance Listing Number: 21.027 Compliance: Activities Allowed and Unallowed and Allowable Costs/Costs Principles Finding Type: Material weakness in internal controls over compliance.Criteria: Management is responsible for maintaining its accounting records in accordance with generally accepted accounting principles (GAAP). Condition: During compliance testing, it was noted that expenditures were recorded in the incorrect period. Context: There were 17 transactions noted from 2022 that were included in the 2023 Schedule of Expenditures of Federal Awards. The 17 transactions totaled approximately $165,000 which had previously been included in the 2022 audited SEFA. The costs were appropriately not included in final reporting to the State. Cause of condition: Accrued expenditures from 2022 were not identified when preparing the 2023 Schedule of Expenditures of Federal Awards. Effect of Condition: As a result of this condition, the District had internal controls over compliance issues and the 2023 SEFA were initially misstated by amounts that were material to the financial statements. Recommendation: It is recommended that the District establish additional policies and procedures to ensure that all Federal awards are identified and reported accurately on the SEFA and are recorded in the correct period. There should be additional review after the preparation of the SEFA. View of Responsible Officials and Planned Corrective Action: The SEFA was modified several times as a result of receiving vendor invoices up to May, 2024 for work completed in the audit period. In addition, vendors refunded make-ready costs which had been invoiced to a closed grant. We sought guidance from the grantor regarding proper accounting treatment of those refunds and, receiving none, recognized those refunds as revenue to be tracked against grant expenses. Corrective action includes approving invoices through the audit period and submitting the SEFA based on this information. Planned Implementation Date of Corrective Action: Ongoing Person Responsible for Corrective Action: Jennille Smith, Executive Director.
Finding 2023-001
Finding Type: Material weakness in internal controls over financial reporting. Criteria: Management is responsible for the preparation of the financial statements and the Schedule of Expenditures of Federal Awards (SEFA). The District is responsible for maintaining complete and accurate financial records and the Schedule of Expenditures of Federal Awards should be prepared directly from those records. Conditions and context: The Schedule of Expenditures of Federal Awards presented for audit required multiple drafts. It was noted that accrued expenditures reported in the 2022 SEFA were included in the 2023 SEFA as well. Additionally, during testing it was noted expenditures that were accrued in 2023 were not included in the SEFA as they should be. This led to two material adjustments to the financial statements. During the audit it was noted that there were refunds for make ready expenses received during the year. Of these refunds, $10,499 pertained to costs previously reported on the 2022 SEFA. The total of $93,616 refunds received in 2023 were recorded as grant income rather than offsetting the appropriate 2023 expenses and were improperly recorded on the SEFA. Final reports to the governing agency did not tie to internal records as the District did not include these refunds in the reporting. Of the $93,616, approximately, $60,000 of refunds received had initially been expended under a grant that was fully expended during 2023. Instead of applying those refunds to the original grant, the District applied them to an open grant that was currently being expended. The District is required to receive written permission from the governing agency on the proper treatment of these funds. There was no permission noted during the audit. Cause of condition: The District does not have effective internal control over the preparation of the financial statements and the Schedule of Expenditures of Federal Awards. Effect of Condition: Potential understatement or overstatement of expenditures could exist in the financial statements and Schedule of Expenditures of Federal Awards and would not be detected and corrected. The District could receive refunds of federally awarded dollars and not use them for allowable expenditures under grant agreements. Recommendation: It is recommended that the District establish additional policies and procedures to ensure that all Federal awards are identified and reported accurately on the SEFA and are recorded in the correct period. There should be additional review after the preparation of the SEFA. It is recommended that the District receive documentation from the grantor on the best practices for the treatment of credits and refunds for federal expenditures. View of Responsible Officials and Planned Corrective Action: The SEFA was modified several times as a result of receiving vendor invoices up to May, 2024 for work completed in the audit period. In addition, vendors refunded make-ready costs which had been invoiced to a closed grant. We sought guidance from the grantor regarding proper accounting treatment of those refunds and, receiving none, recognized those refunds as revenue to be tracked against grant expenses. Corrective action includes approving invoices through the audit period and submitting the SEFA based on this information. Planned Implementation Date of Corrective Action: Ongoing Person Responsible for Corrective Action: Jennille Smith, Executive Director
Finding 2023-002
Finding Type: Significant deficiency in internal controls over financial reporting. Criteria: Management is responsible for maintain its accounting records in accordance with generally accepted accounting principles (GAAP). Conditions and context: It is important to perform a physical inventory count on a regular basis to confirm that recorded balances in the detailed inventory account reflect items actually on hand. On at least an annual basis, the District performs a physical inventory count. However, there are no written procedures documenting how inventory count should be performed. Cause of condition: The condition was caused by lack of oversight and misunderstanding around the inventory process. Effect of Condition: As a result of this condition, the District lacks internal controls over inventory. Recommendation: To ensure that the count is performed properly, and to use as a training tool for new staff, we recommend the District formalize and document procedures for performing a physical count of its inventory. View of Responsible Officials and Planned Corrective Action: Our inventory was tracked and managed by an outside consultant. Corrective action includes implementing an integrated inventory and accounting system and performing reconciliations of inventory reports to actual physical counts annually. Planned Implementation Date of Corrective Action: We are prepared for a year end reconciliation and physical count of inventory. These steps were put in place within the first quarter of 2024. Person Responsible for Corrective Action: Jennille Smith, Executive Director
Finding 2023-003
Federal Agency: U.S. Department of Treasury Award Name: Coronavirus State and Local Fiscal Recovery Funds Program Year: 2023 Assistance Listing Number: 21.027 Compliance: Activities Allowed and Unallowed and Allowable Costs/Costs Principles Finding Type: Material weakness in internal controls over compliance.Criteria: Management is responsible for maintaining its accounting records in accordance with generally accepted accounting principles (GAAP). Condition: During compliance testing, it was noted that expenditures were recorded in the incorrect period. Context: There were 17 transactions noted from 2022 that were included in the 2023 Schedule of Expenditures of Federal Awards. The 17 transactions totaled approximately $165,000 which had previously been included in the 2022 audited SEFA. The costs were appropriately not included in final reporting to the State. Cause of condition: Accrued expenditures from 2022 were not identified when preparing the 2023 Schedule of Expenditures of Federal Awards. Effect of Condition: As a result of this condition, the District had internal controls over compliance issues and the 2023 SEFA were initially misstated by amounts that were material to the financial statements. Recommendation: It is recommended that the District establish additional policies and procedures to ensure that all Federal awards are identified and reported accurately on the SEFA and are recorded in the correct period. There should be additional review after the preparation of the SEFA. View of Responsible Officials and Planned Corrective Action: The SEFA was modified several times as a result of receiving vendor invoices up to May, 2024 for work completed in the audit period. In addition, vendors refunded make-ready costs which had been invoiced to a closed grant. We sought guidance from the grantor regarding proper accounting treatment of those refunds and, receiving none, recognized those refunds as revenue to be tracked against grant expenses. Corrective action includes approving invoices through the audit period and submitting the SEFA based on this information. Planned Implementation Date of Corrective Action: Ongoing Person Responsible for Corrective Action: Jennille Smith, Executive Director.