Audit 389883

Finding No. 2024-001: Financial Reporting – Material Weakness Criteria An accounting system and effective internal control environment should support the preparation of the financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”) and grant reports in accordance with federal compliance requirements, including a robust financial close process at year end. Condition In fiscal year 2024, SERC’s accounting processes and internal controls over financial reporting were not functioning timely to support generating complete and accurate financial information. The books and records were not closed and finalized timely. Numerous adjustments to the trial balances were made, necessitating revisions to account reconciliations, and grant schedules. Cause SERC experienced staffing shortages and related difficulties during the fiscal year. Effect The books and records were not closed and finalized until several months after year end. Context SERC’s accounting processes and internal controls over financial reporting were not functioning properly. Recommendation We recommend that SERC maintain appropriately trained and experienced personnel. This will help ensure that the accounting processes and internal controls over financial reporting will function properly, and that the financial close process will be complete, accurate, and timely. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.

Finding No. 2024-002: Annual Audit Submission – Significant Deficiency Assistance Listing Program Title and Number: All Federal Agency: All Criteria As per the Code of Federal Regulations, Section 200.512 - Report Submission, the audit must be completed and the Data Collection Form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditors’ report, or nine months after the end of the audit period. The due date for the audit and reporting package submission was March 31, 2025. Condition The audit, Data Collection Form and reporting package were not submitted by the due date March 31, 2025. Cause SERC experienced staffing shortages and related difficulties during the fiscal year. As such, SERC was not able to timely prepare for the audit in order for the Uniform Guidance, Data Collection Form and reporting package to be filed by the due date. Effect The audit, Data Collection Form and federal reporting package were not filed on time. Questioned Costs Unknown Context SERC was unable to complete the financial statements and Federal Single Audit by the due date. Recommendation We recommend that all necessary efforts be taken to ensure timely submission of the audit, Data Collection Form and reporting package. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.