CAP for Finding: 2022-103 Auditor Recommendation: Further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is adjusting expenditures for all prior-year transfers of expenditures in the current year. Pl...
CAP for Finding: 2022-103 Auditor Recommendation: Further evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards and ensure it is adjusting expenditures for all prior-year transfers of expenditures in the current year. Planned Corrective Action: The Wisconsin Department of Administration (DOA or Department) Bureau of Financial Management (BFM) will evaluate federal grant expenditures reported in the STAR General Ledger as it prepares its schedule of expenditures of federal awards (SEFA) and ensure it is adjusting expenditures for material prior-year transfers of expenditures in the current year in a manner consistent with requirements of the Office of Management and Budget Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance or Guidance) and additional guidance, if any, provided by the Department?s State Controller?s Office (SCO). The Uniform Guidance requires the preparation of a SEFA for the period covered by the State's financial statements that includes total federal awards expended [ref. 2 CFR 200.510 (b)]; the determination of when a federal award is expended to be based on when the activity related to the federal award occurs [ref. 2 CFR 200.502]; and that the financial statements and SEFA are for the same audit period [ref. 2 CFR 200.514]. As the auditors noted, in preparing DOA?s SEFA, DOA BFM sought to reflect the amount of federal awards expended for DOA?s grant programs based on the amounts reported in the STAR general ledger. Together with reporting negative expenditures resulting from the transfers of FY 2019-20 and FY 2020-21 expenditures within the Notes to the SEFA, which are an integral part of the SEFA and required by 2 CFR 200.510 (b)(6), and absent OMB guidance that prescribes a uniform method for reporting a transfer of prior year grant expenditures, DOA BFM believed its approach was consistent with the requirements of 2 CFR 200.502 and 2 CFR 200.510 (b), more generally. DOA BFM later modified its SEFA to exclude negative expenditures resulting from the transfers of FY 2019-20 and FY 2020-21 expenditures consistent with the manner in which a prior period adjustment would be reflected within current-year activity in financial statements prepared in accordance with generally accepted accounting principles (GAAP), as described in the criteria and recommended by the auditors. The increased expenditures for the Coronavirus Relief Fund (Assistance Listing number 21.019) and Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing number 21.027) in the SEFA of $241.3 million and $192.1 million, respectively, together with any future exclusions of negative expenditures resulting from the transfer of prior-year expenditures, will cause the lifetime expenditures on the SEFA schedule for these programs to reflect more expenditures than federal funding received. The Notes to the SEFA were also modified to indicate that the SEFA does not reflect a reduction for the prior year transferred expenditures. Anticipated Completion Date: Concurrent with the submission of the FY 2022-23 SEFA, which is anticipated to be November 2023 Auditor Recommendation: Carefully assess the transfer of prior-year expenditures in the current year to determine any potential effects on the total federal expenditures for the prior-year and the effect on the major program expenditures. Planned Corrective Action: DOA BFM will assess the transfer of prior-year expenditures in the current year to determine any potential effects on the total federal expenditures for the prior-year and the effect on the major program expenditures. It has been the practice of DOA BFM to assess the transfer of prior year expenditures in the current year and DOA BFM will continue to prioritize decisions with respect to the same to allow the Department to maximize the availability of federal funding for the purposes intended. Anticipated Completion Date: June 30, 2023 Person responsible for corrective action: Colleen Holtan, Director Bureau of Financial Management Division of Enterprise Operations colleen.holtan@wisconsin.gov