2024-003 – Material Weakness – Internal Control
Material Weakness in Internal Control: The following errors were noted and corrected as a result of auditing procedures on the SEFA:
• CRA program federal expenditures (CFDA #14.228) were understated by $23,893.
• ACL Independent Living State Grants f...
2024-003 – Material Weakness – Internal Control
Material Weakness in Internal Control: The following errors were noted and corrected as a result of auditing procedures on the SEFA:
• CRA program federal expenditures (CFDA #14.228) were understated by $23,893.
• ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation.
• Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards.
Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement.
Responsible Person for Corrective Action: Thomas Newman, Executive Director
Corrective Action to be Taken: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process.
To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit.
Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
The anticipated completion date for this corrective action is 6/30/2025.