Federal grants received by ABID are subject to review and audit by grantor agencies. ABID’s management believes that the results of such audits will not have a material effect on the Schedule.
Finding Reference: 2024-002 - Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Expenditures Federal Agency: Department of the Treasury Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Arts and Culture District Program Grant Award: ABID-22-2022 Condition: Certain program expenditures reported on the initial SEFA provided during the audit changed as a result of the final reconciliation and determination of grant activities. The SEFA was updated with reconciled expenditures. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Cause: Management did not implement adequate procedures to identify the federal expenditures prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements. This could result in noncompliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants expenditures are fully identified and recorded before the preparation of the SEFA.
Finding Reference: 2024-003 - Single Audit Report Was Not Submitted Timely Federal Agency: Department of the Treasury Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Arts and Culture District Program Grant Award: ABID-22-2022 Condition/Context: The single audit report was not submitted to the Office Management and Budget in accordance with the reporting requirement. Criteria: COSO/Internal Control Framework defines control activities as “policies and procedures that help ensures management’s directives are carried out” This would include preparation of the Schedule of Expenditures of Federal Awards and the related Data Collection Form in a timely manner. Uniform Guidance 2 CFR 200.501 states that the audit shall be completed, and the data collection form shall be submitted within the earlier of 30 days after the receipt of the auditor’s report, or nine months after the end of the audit period. Accordingly, the audit for the nine months ending September 30, 2024 would be due on June 30, 2025. Cause: The Single Audit Report was not submitted within the required timeframe due to delays in completing the reconciliation of financial schedules and the Schedule of Expenditures of Federal Awards (SEFA). Effect: As a result, management was unable to finalize the financial information necessary for the timely completion and submission of the audit report. Questioned Costs: None Recommendation: We believe that the year-end closing process could proceed in a timely manner by adhering to a closing schedule and maintaining timely account reconciliations. Progress should be monitored by management to determine that due dates are being met and required reports are submitted to regulatory agencies within the compliance time frame.