Finding 2023-003: Error in the 2022 SEFA (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), an entity is
required to prepare appropriate financial statements, including the Schedule of Expenditures of
Federal Awards (SEFA).
Condition: Management noted that the 2022 SEFA was understated by $146,051. No issues were
noted during the audit regarding the 2023 expenditures reported on the SEFA for the year ended
December 31, 2023. Therefore, this compliance finding is not considered to be a material weakness.
Cause: While the total expenses reported in the 2022 financial statements was correct, $146,051 of
the Federal expenditures were not clearly or properly classified as Federal in the 2022 general
ledger. As a result, expenses totaling $146,051 were not included on the 2022 SEFA.
Effect or Potential Effect: As a result of the understatement of expenditures reported on the 2022
SEFA, a material misstatement of the 2022 financial statements occurred. In addition, the 2023
SEFA includes the unreported 2022 costs of $146,051.
Questioned Costs: None.
Repeat Finding: See Finding 2022-006.
Recommendation: We recommend that management implement procedures to easily segregate
Federal expenditures so that an accurate SEFA can be prepared on a consistent basis.
Finding 2023-004: Procurement, Suspension, and Debarment (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: 2 CFR Section 200.318 requires that the non-Federal entity
must have and use documented procurement procedures, consistent with State, local, and tribal
laws and regulations and the standards of this section, for the acquisition of property or services
required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In
addition, 2 CFR Section 200.214 requires that, for covered transactions, a non-Federal entity must
verify that entities are not suspended, debarred or otherwise excluded. This verification may be
accomplished by checking the System for Award Management (SAM) website maintained by the
General Services Administration.
Condition: FCE did not have a documented procurement policy until January 2024. In addition, for
all disbursements tested, FCE did not verify, prior to payment, that the vendors were not suspended,
debarred or otherwise excluded. However, FCE provided documentation of the verification that
occurred after the payments had been made and no exclusion issues were noted with the vendors.
Cause: Prior to the implementation of a formal procurement policy in January 2024, FCE did not
require that evidence of SAM checks be maintained in its vendor files. However, FCE performed a
search after the payments had been made. In this way, FCE was able to verify that the vendors or
individuals in our sample were not suspended, debarred or otherwise excluded.Effect or Potential Effect: FCE was not in compliance with the procurement policy and
documentation requirements of the Uniform Guidance until January 2024.
Questioned Costs: None.
Repeat Finding: See Findings 2022-002 and 2022-003.
Recommendation: FCE established internal controls in January 2024 to ensure proper
documentation is maintained as evidence to support that it performed the required suspension and
debarment searches on the SAM website.
Finding 2023-005: Cash Management and Reporting (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: 2 CFR Section 200.303 requires auditees to establish and
maintain effective internal control over Federal awards that provides reasonable assurance that the
non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations,
and the terms and conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government” issued by the
Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: FCE did not maintain documentary evidence of the review and approval of either its
requests for cash draw downs or its performance reports in accordance with the internal control
requirements for the first three quarters in 2023. However, internal controls were implemented during
the fourth quarter of 2023 and no issues were noted with approvals in the fourth quarter. In addition,
the requests for cash draw downs were not submitted in a timely manner during the year ended
December 31, 2023.
Cause: Until the fourth quarter of 2023, the review and approval was performed verbally and was
not documented. As a result, FCE was not able to provide adequate support to document the review
and approval of either its requests for cash draw downs or its performance reports for the first three
quarters of 2023. In addition, as FCE was experiencing transition in the finance team, the requests
for cash draw downs were not submitted in a timely manner.
Effect or Potential Effect: FCE was not able to provide evidence of the implementation of internal
controls related to review and approval for cash draw downs and performance reports for the first
three quarters of 2023 and FCE did not timely submit its requests for cash draw downs.
Questioned Costs: None.
Repeat Finding: See Finding 2022-005.
Recommendation: FCE should retain documentary evidence of its review and approval process,
which should occur prior to submission of the requests for cash draw downs and performance
reports. FCE should endeavor to timely submit its requests for cash draw downs.
Finding 2023-003: Error in the 2022 SEFA (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), an entity is
required to prepare appropriate financial statements, including the Schedule of Expenditures of
Federal Awards (SEFA).
Condition: Management noted that the 2022 SEFA was understated by $146,051. No issues were
noted during the audit regarding the 2023 expenditures reported on the SEFA for the year ended
December 31, 2023. Therefore, this compliance finding is not considered to be a material weakness.
Cause: While the total expenses reported in the 2022 financial statements was correct, $146,051 of
the Federal expenditures were not clearly or properly classified as Federal in the 2022 general
ledger. As a result, expenses totaling $146,051 were not included on the 2022 SEFA.
Effect or Potential Effect: As a result of the understatement of expenditures reported on the 2022
SEFA, a material misstatement of the 2022 financial statements occurred. In addition, the 2023
SEFA includes the unreported 2022 costs of $146,051.
Questioned Costs: None.
Repeat Finding: See Finding 2022-006.
Recommendation: We recommend that management implement procedures to easily segregate
Federal expenditures so that an accurate SEFA can be prepared on a consistent basis.
Finding 2023-004: Procurement, Suspension, and Debarment (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: 2 CFR Section 200.318 requires that the non-Federal entity
must have and use documented procurement procedures, consistent with State, local, and tribal
laws and regulations and the standards of this section, for the acquisition of property or services
required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In
addition, 2 CFR Section 200.214 requires that, for covered transactions, a non-Federal entity must
verify that entities are not suspended, debarred or otherwise excluded. This verification may be
accomplished by checking the System for Award Management (SAM) website maintained by the
General Services Administration.
Condition: FCE did not have a documented procurement policy until January 2024. In addition, for
all disbursements tested, FCE did not verify, prior to payment, that the vendors were not suspended,
debarred or otherwise excluded. However, FCE provided documentation of the verification that
occurred after the payments had been made and no exclusion issues were noted with the vendors.
Cause: Prior to the implementation of a formal procurement policy in January 2024, FCE did not
require that evidence of SAM checks be maintained in its vendor files. However, FCE performed a
search after the payments had been made. In this way, FCE was able to verify that the vendors or
individuals in our sample were not suspended, debarred or otherwise excluded.Effect or Potential Effect: FCE was not in compliance with the procurement policy and
documentation requirements of the Uniform Guidance until January 2024.
Questioned Costs: None.
Repeat Finding: See Findings 2022-002 and 2022-003.
Recommendation: FCE established internal controls in January 2024 to ensure proper
documentation is maintained as evidence to support that it performed the required suspension and
debarment searches on the SAM website.
Finding 2023-005: Cash Management and Reporting (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: 2 CFR Section 200.303 requires auditees to establish and
maintain effective internal control over Federal awards that provides reasonable assurance that the
non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations,
and the terms and conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government” issued by the
Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: FCE did not maintain documentary evidence of the review and approval of either its
requests for cash draw downs or its performance reports in accordance with the internal control
requirements for the first three quarters in 2023. However, internal controls were implemented during
the fourth quarter of 2023 and no issues were noted with approvals in the fourth quarter. In addition,
the requests for cash draw downs were not submitted in a timely manner during the year ended
December 31, 2023.
Cause: Until the fourth quarter of 2023, the review and approval was performed verbally and was
not documented. As a result, FCE was not able to provide adequate support to document the review
and approval of either its requests for cash draw downs or its performance reports for the first three
quarters of 2023. In addition, as FCE was experiencing transition in the finance team, the requests
for cash draw downs were not submitted in a timely manner.
Effect or Potential Effect: FCE was not able to provide evidence of the implementation of internal
controls related to review and approval for cash draw downs and performance reports for the first
three quarters of 2023 and FCE did not timely submit its requests for cash draw downs.
Questioned Costs: None.
Repeat Finding: See Finding 2022-005.
Recommendation: FCE should retain documentary evidence of its review and approval process,
which should occur prior to submission of the requests for cash draw downs and performance
reports. FCE should endeavor to timely submit its requests for cash draw downs.
Finding 2023-003: Error in the 2022 SEFA (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), an entity is
required to prepare appropriate financial statements, including the Schedule of Expenditures of
Federal Awards (SEFA).
Condition: Management noted that the 2022 SEFA was understated by $146,051. No issues were
noted during the audit regarding the 2023 expenditures reported on the SEFA for the year ended
December 31, 2023. Therefore, this compliance finding is not considered to be a material weakness.
Cause: While the total expenses reported in the 2022 financial statements was correct, $146,051 of
the Federal expenditures were not clearly or properly classified as Federal in the 2022 general
ledger. As a result, expenses totaling $146,051 were not included on the 2022 SEFA.
Effect or Potential Effect: As a result of the understatement of expenditures reported on the 2022
SEFA, a material misstatement of the 2022 financial statements occurred. In addition, the 2023
SEFA includes the unreported 2022 costs of $146,051.
Questioned Costs: None.
Repeat Finding: See Finding 2022-006.
Recommendation: We recommend that management implement procedures to easily segregate
Federal expenditures so that an accurate SEFA can be prepared on a consistent basis.
Finding 2023-004: Procurement, Suspension, and Debarment (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: 2 CFR Section 200.318 requires that the non-Federal entity
must have and use documented procurement procedures, consistent with State, local, and tribal
laws and regulations and the standards of this section, for the acquisition of property or services
required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In
addition, 2 CFR Section 200.214 requires that, for covered transactions, a non-Federal entity must
verify that entities are not suspended, debarred or otherwise excluded. This verification may be
accomplished by checking the System for Award Management (SAM) website maintained by the
General Services Administration.
Condition: FCE did not have a documented procurement policy until January 2024. In addition, for
all disbursements tested, FCE did not verify, prior to payment, that the vendors were not suspended,
debarred or otherwise excluded. However, FCE provided documentation of the verification that
occurred after the payments had been made and no exclusion issues were noted with the vendors.
Cause: Prior to the implementation of a formal procurement policy in January 2024, FCE did not
require that evidence of SAM checks be maintained in its vendor files. However, FCE performed a
search after the payments had been made. In this way, FCE was able to verify that the vendors or
individuals in our sample were not suspended, debarred or otherwise excluded.Effect or Potential Effect: FCE was not in compliance with the procurement policy and
documentation requirements of the Uniform Guidance until January 2024.
Questioned Costs: None.
Repeat Finding: See Findings 2022-002 and 2022-003.
Recommendation: FCE established internal controls in January 2024 to ensure proper
documentation is maintained as evidence to support that it performed the required suspension and
debarment searches on the SAM website.
Finding 2023-005: Cash Management and Reporting (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: 2 CFR Section 200.303 requires auditees to establish and
maintain effective internal control over Federal awards that provides reasonable assurance that the
non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations,
and the terms and conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government” issued by the
Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: FCE did not maintain documentary evidence of the review and approval of either its
requests for cash draw downs or its performance reports in accordance with the internal control
requirements for the first three quarters in 2023. However, internal controls were implemented during
the fourth quarter of 2023 and no issues were noted with approvals in the fourth quarter. In addition,
the requests for cash draw downs were not submitted in a timely manner during the year ended
December 31, 2023.
Cause: Until the fourth quarter of 2023, the review and approval was performed verbally and was
not documented. As a result, FCE was not able to provide adequate support to document the review
and approval of either its requests for cash draw downs or its performance reports for the first three
quarters of 2023. In addition, as FCE was experiencing transition in the finance team, the requests
for cash draw downs were not submitted in a timely manner.
Effect or Potential Effect: FCE was not able to provide evidence of the implementation of internal
controls related to review and approval for cash draw downs and performance reports for the first
three quarters of 2023 and FCE did not timely submit its requests for cash draw downs.
Questioned Costs: None.
Repeat Finding: See Finding 2022-005.
Recommendation: FCE should retain documentary evidence of its review and approval process,
which should occur prior to submission of the requests for cash draw downs and performance
reports. FCE should endeavor to timely submit its requests for cash draw downs.
Finding 2023-003: Error in the 2022 SEFA (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), an entity is
required to prepare appropriate financial statements, including the Schedule of Expenditures of
Federal Awards (SEFA).
Condition: Management noted that the 2022 SEFA was understated by $146,051. No issues were
noted during the audit regarding the 2023 expenditures reported on the SEFA for the year ended
December 31, 2023. Therefore, this compliance finding is not considered to be a material weakness.
Cause: While the total expenses reported in the 2022 financial statements was correct, $146,051 of
the Federal expenditures were not clearly or properly classified as Federal in the 2022 general
ledger. As a result, expenses totaling $146,051 were not included on the 2022 SEFA.
Effect or Potential Effect: As a result of the understatement of expenditures reported on the 2022
SEFA, a material misstatement of the 2022 financial statements occurred. In addition, the 2023
SEFA includes the unreported 2022 costs of $146,051.
Questioned Costs: None.
Repeat Finding: See Finding 2022-006.
Recommendation: We recommend that management implement procedures to easily segregate
Federal expenditures so that an accurate SEFA can be prepared on a consistent basis.
Finding 2023-004: Procurement, Suspension, and Debarment (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: 2 CFR Section 200.318 requires that the non-Federal entity
must have and use documented procurement procedures, consistent with State, local, and tribal
laws and regulations and the standards of this section, for the acquisition of property or services
required under a Federal award or subaward. The non-Federal entity's documented procurement
procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In
addition, 2 CFR Section 200.214 requires that, for covered transactions, a non-Federal entity must
verify that entities are not suspended, debarred or otherwise excluded. This verification may be
accomplished by checking the System for Award Management (SAM) website maintained by the
General Services Administration.
Condition: FCE did not have a documented procurement policy until January 2024. In addition, for
all disbursements tested, FCE did not verify, prior to payment, that the vendors were not suspended,
debarred or otherwise excluded. However, FCE provided documentation of the verification that
occurred after the payments had been made and no exclusion issues were noted with the vendors.
Cause: Prior to the implementation of a formal procurement policy in January 2024, FCE did not
require that evidence of SAM checks be maintained in its vendor files. However, FCE performed a
search after the payments had been made. In this way, FCE was able to verify that the vendors or
individuals in our sample were not suspended, debarred or otherwise excluded.Effect or Potential Effect: FCE was not in compliance with the procurement policy and
documentation requirements of the Uniform Guidance until January 2024.
Questioned Costs: None.
Repeat Finding: See Findings 2022-002 and 2022-003.
Recommendation: FCE established internal controls in January 2024 to ensure proper
documentation is maintained as evidence to support that it performed the required suspension and
debarment searches on the SAM website.
Finding 2023-005: Cash Management and Reporting (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: 2 CFR Section 200.303 requires auditees to establish and
maintain effective internal control over Federal awards that provides reasonable assurance that the
non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations,
and the terms and conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government” issued by the
Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: FCE did not maintain documentary evidence of the review and approval of either its
requests for cash draw downs or its performance reports in accordance with the internal control
requirements for the first three quarters in 2023. However, internal controls were implemented during
the fourth quarter of 2023 and no issues were noted with approvals in the fourth quarter. In addition,
the requests for cash draw downs were not submitted in a timely manner during the year ended
December 31, 2023.
Cause: Until the fourth quarter of 2023, the review and approval was performed verbally and was
not documented. As a result, FCE was not able to provide adequate support to document the review
and approval of either its requests for cash draw downs or its performance reports for the first three
quarters of 2023. In addition, as FCE was experiencing transition in the finance team, the requests
for cash draw downs were not submitted in a timely manner.
Effect or Potential Effect: FCE was not able to provide evidence of the implementation of internal
controls related to review and approval for cash draw downs and performance reports for the first
three quarters of 2023 and FCE did not timely submit its requests for cash draw downs.
Questioned Costs: None.
Repeat Finding: See Finding 2022-005.
Recommendation: FCE should retain documentary evidence of its review and approval process,
which should occur prior to submission of the requests for cash draw downs and performance
reports. FCE should endeavor to timely submit its requests for cash draw downs.