Criteria: The Uniform Guidance requires the auditee to prepare a SEFA for the period covered by the auditee's financial statement. It is the responsibility of the auditee's management to design and implement internal controls that provide reasonable assurance over the completeness and accuracy of th...
Criteria: The Uniform Guidance requires the auditee to prepare a SEFA for the period covered by the auditee's financial statement. It is the responsibility of the auditee's management to design and implement internal controls that provide reasonable assurance over the completeness and accuracy of the SEFA. The SEFA is the basis for the auditor's identification of major programs.
Condition: The City's initial SEFA provided for the audit was incomplete and contained inaccurate program expenditure amounts. In particular, there were multiple federal programs that were not identified, or had inaccurate amounts reported, on the initial SEFA for the year under audit:
ALN 16.554 National Criminal History Improvement Program (NCHIP)
ALN 20.600 State and Community Highway Safety
ALN 66.458 Capitalization Grants for Clean Water State Revolving Funds
ALN 93.568 Low-Income Home Energy Assistance
ALN 97.044 Assistance to Firefighters Grant
ALN 97.067 Homeland Security Grant Program
Cause: The City does not have a method to accurately track the related expenditures for reporting.
Effect or Potential Effect: A Uniform Guidance compliance audit is based on the premise that management must comply with federal statutes, regulations and the terms and conditions of the federal awards it received. Without identifying the funds as federal, the auditee may not have complied with those requirements. In addition, there is increased risk regarding the accurate reporting of grant expenditures and noncompliance with policies and procedures surrounding the recording of federal awards.
Questioned Costs: None
Context: The City was aware of the requirement to prepare a SEFA prior to the audit; however, they were not able to accumulate the appropriate records to correctly identify the source of funding for all ongoing projects. In addition, management was unable to accurately determine the amounts to be reported on the SEFA in accordance with 2 CFR §200.502. The adjustments to the SEFA amounted to an increase in Total Federal Expenditures reported of $892,160.
Repeat Finding: This is a repeat finding; it was previously finding 2021-006 and 2021-007.
Recommendation: We recommend the City develop and implement procedures to ensure that information related to all federal awards is accumulated to assist in the preparation of the SEFA. In addition, we recommend management of the City verify the completeness and accuracy of the amounts reported on the SEFA.
Response: The City agrees with the finding, and will develop a method for accurately tracking federal expenditures.
Anticipated Completed Date: June 30, 2025
Responsible Contact Person:
Elizabeth Greenwood, Director of Administration & Finance
City of Cortland, 25 Court Street, Cortland, NY 13045
(607) 758-8373