District Response:
Corrective Action Plan: Fiscal Audit Finding 2023-004
Objective: To address the material weakness in internal control over federal awards related to the accuracy and completeness of the Schedule of Expenditures of Federal Awards (SEFA) and to prevent future discrepancies.
Respo...
District Response:
Corrective Action Plan: Fiscal Audit Finding 2023-004
Objective: To address the material weakness in internal control over federal awards related to the accuracy and completeness of the Schedule of Expenditures of Federal Awards (SEFA) and to prevent future discrepancies.
Responsible Officials:
● Director of Business and Finance
● Grant Accounting Manager
● Internal Audit Team
Timeline: The corrective action plan will be implemented immediately and completed within the next six months upon partnering with Yeo & Yeo or Plante Moran.
1. Immediate Steps:
1.1 Notification and Acknowledgment:
● Notify the relevant personnel, including the Director of Business and Finance and Grant Accounting Manager, about the audit finding.
● Acknowledge the importance of addressing the material weakness and its potential impact on SEFA accuracy.
1.2 Internal Review:
● Conduct an internal review of the SEFA, focusing on the accuracy of the federal awards reported.
● Identify any additional discrepancies or omissions in the SEFA.
1.3 Communication Plan:
● Develop a communication plan to inform key stakeholders (grantors, auditors, etc.) about the identified issue, the corrective action plan, and the steps being taken to address the material weakness.
2. Short-Term Corrective Actions (Within 3 Months):
2.1 Template Creation:
● Develop a standardized template to reconcile federal grant activity with the general ledger revenue, expenditure, and deferral balances.
● Ensure that the template includes provisions for capturing indirect costs, receivables, and deferrals for all federal awards.
2.2 Training:
● Provide training to relevant staff members, especially those involved in grant accounting, on the new reconciliation template and the importance of timely and accurate reporting.
2.3 Review and Update Processes:
● Review and update the monthly close process to ensure that reconciliations are completed in a timely manner.
● Establish clear procedures for handovers in case of personnel turnover.
3. Mid-Term Corrective Actions (Within 6 Months):
3.1 Implementation of Template:
● Implement the newly created reconciliation template for all federal awards.
● Ensure that the template is consistently used for all relevant financial reporting.
3.2 Monitoring and Oversight:
● Establish a system for ongoing monitoring and oversight of the reconciliation process.
● Conduct periodic reviews to ensure compliance with the new procedures.
3.3 Internal Controls Enhancement:
● Enhance internal controls related to federal awards by implementing additional checks and balances.
● Document these controls and communicate them to relevant personnel.
4. Long-Term Preventive Measures:
4.1 Succession Planning:
● Develop and implement a succession plan for critical financial positions, including the Director of Business and Finance.
● Ensure that key responsibilities are clearly defined and documented.
4.2 Continuous Improvement:
● Foster a culture of continuous improvement within the financial management team.
● Encourage regular feedback and evaluations to identify areas for improvement in processes and controls.
5. Monitoring and Reporting:
5.1 Progress Reports:
● Provide regular progress reports to senior management and the audit committee on the status of corrective actions.
● Highlight any challenges encountered and the steps taken to address them.
5.2 Follow-up Audits:
● Schedule follow-up audits to assess the effectiveness of the corrective actions taken.
● Use the results to make further improvements to internal controls and processes.