2023-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal Agency: All presented in the Schedule of Expenditures of Federal Awards.
Program Name: All presented in the Schedule of Expenditures of Federal Awards.
Assistance Listing Nos. and Program Expenditures: All presente...
2023-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal Agency: All presented in the Schedule of Expenditures of Federal Awards.
Program Name: All presented in the Schedule of Expenditures of Federal Awards.
Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards.
Award Number and Program Award Year: All presented in Schedule of Expenditures of Federal Awards.
Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Statement of Condition
During our audit, we reviewed the Coalition’s federal grants report for the fiscal year and identified the federal grants, Assistance Listing #s (AL#s) and the amounts of the federal expenditures and all of the other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). We then had the finance staff of the Coalition confirm the correctness of the SEFA. Despite the confirmation of accuracy, additional federal expenditures and grouping of grant expenditures were identified after several reviews of the SEFA.Criteria
2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, the determination of when a federal award is expended should be based on when the activity related to the federal award occurs. Generally, the activity pertains to events that require the non-federal entity to comply with federal statutes, regulations, and the terms and conditions of federal awards, such as expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards.
Effect
Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, the errors could result in improper selections of major program(s) for the single audit and a substandard single audit.
Cause
Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided.
Recommendation
We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger.
The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2024 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information.
Corrective Action Plan Timeline: Completed by December 13, 2024 (Final copy of the SEFA will not be given to the auditors until requested for the 2024 Audit)
Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct.
Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards.
Questioned Costs: None