Audit 377775

Specific Requirements: 2 CFR 200.302(b) requires non-Federal entities to provide the following – 1) identification, in its accounts, of all Federal awards received and expended; 2) accurate, current, and complete disclosure of the financial results of each Federal award program; 3) records that identify adequately the source and application of funds for federally-funded activities; 4) effective controls over, and accountability for all funds, property, and other assets; 5) comparison of expenditures with budget amounts for each Federal award; 6) written procedures to implement the requirements of the Federal payment section of Uniform Guidance (200.305); 7) written procedures for determining the allowability of costs in accordance with the cost principles as listed in Uniform Guidance. Best practices under generally accepted accounting principles require an organization to establish internal controls over financial reporting over federal awards, which includes tracking of federal dollars within the detailed general ledger by federal programs. Condition: We noted that internal controls over tracking federal funds in the general ledger by federal programs was not being executed to clearly identify which expenditures were for the federal program. Program expenses included both federal and non-federal dollars which made it difficult to ensure the expenditures for federal programs were accurately presented on the SEFA and to identify the specific expenditure to test for compliance. Cause: For the second year the accounting department had significant turnover and went through a software conversion in the current year. The software was not set up to track the expenditures by Federal grant. Effect or Potential Effect: Lack of controls over coding federal programs in detailed general ledger may result in either overstating or understating federal expenditures which could cause a material misstatement of the financial statements and SEFA. Repeat Finding: No Recommendation: We recommend the Organization update its coding process in their financial system. Begin including Project codes for expenses for all federal programs. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.