2024-011 Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters)
Federal Financial Assistance Listing Number: 97.036
Federal Grantor: U.S. Department of Homeland Security
Pass Through: California Office of Emergency Services
Award No. and Year: 059-00000
Compliance Requireme...
2024-011 Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters)
Federal Financial Assistance Listing Number: 97.036
Federal Grantor: U.S. Department of Homeland Security
Pass Through: California Office of Emergency Services
Award No. and Year: 059-00000
Compliance Requirements: Other - Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) - Schedule of Expenditures of Federal Awards
Type of Finding: Material Weakness in Internal Control Over Compliance
Criteria:
In accordance with the 2024 OMB Compliance Supplement, nonfederal entities must record expenditures on the Schedule of Expenditures of Federal Awards (SEFA) when (1) FEMA has approved the nonfederal entity’s Project, and (2) the nonfederal entity has incurred the eligible expenditures. FEMA’s approval of a subaward is indicated when FEMA obligates the federal share of the eligible project cost to the recipient. Federal awards expended in years subsequent to the fiscal year in which the Project is approved are to be recorded on the nonfederal entity’s SEFA in those subsequent years.
In addition, section 200.303 of the Uniform Guidance states that recipients and subrecipients must establish effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts.
Condition:
During our audit procedures performed over the Schedule of Expenditures of Federal Awards and expenditures reported for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) we noted the County reported expenditures totaling $5,820,436 that should have been reported on the FY 2023 SEFA, as the granting agency approved the expenditures in FY 2023 and the County incurred the expenditures prior to June 30, 2023.
Cause:
The County lacks adequate internal controls to ensure the SEFA is completely and accurately stated.
Effect:
The initial FY 2024 SEFA provided was overstated by $5,820,436. However, we noted these expenditures would not have had a material effect on the FY 2023 SEFA.
Questioned Costs:
No questioned costs were identified as a result of our procedures.
Context/Sampling:
No sampling was used. Program expenditures on the SEFA were reconciled to supporting records.
Repeat Finding from Prior Years:
No.
Recommendation:
We the recommend that the County establish policies and implement internal controls to ensure
that expenditures are reported on the SEFA in accordance with program requirements.
Management Response and Corrective Action:
1. Person Responsible: Trevor Richardson, OCPW Emergency Manager
2. Corrective Action Plan:
Due to the change in reporting guidance, we will now report the full amount of the award in the fiscal year it is approved, based on the obligation letter, instead of on a cash basis.
3. Anticipated Implementation date: Effective immediately for FY24-25.