2024-004 – Material Weakness and Noncompliance, Completeness and Accuracy of Schedule of Expenditures of Federal and State Awards (Repeat Finding 2023-004) U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Assistance Listing Number: 10.560 Program Name: State Administrative Expenses for Child Nutrition Assistance Listing Number: 10.649 Program Name: COVID-19 Pandemic Electronic Benefit (P-EBT) Administrative Costs Department of Homeland Security Passed through the State of Connecticut Emergency Management and Homeland Security Assistance Listing Number: 97.042 Program Name: Emergency Management Performance Grant U.S. Department of Education Passed through the State of Connecticut Department of Education Assistance Listing Number: 84.010 Program Name: Title I Grants to Local Education Agencies Special Education Cluster (IDEA) Assistance Listing Number: 84.027 Program Name: Special Education Grants to States Assistance Listing Number: 84.027 Program Name: COVID-19 Special Education Grants to States Assistance Listing Number: 84.173 Program Name: Special Education Preschool Grants Assistance Listing Number: 84.173 Program Name: COVID-19 Special Education Preschool Grants Assistance Listing Number: 84.048 Program Name: Career and Technical Education – Basic Grants to States Assistance Listing Number: 84.365 Program Name: English Language Acquisition to State Grants Assistance Listing Number: 84.367 Program Name: Supporting Effective Instruction State Grants Assistance Listing Number: 84.424 Program Name: Student Support and Academic Enrichment Program Education Stabilization Fund: Assistance Listing Number: 84.425D Program Name: COVID-19 Elementary and Secondary School Relief Fund (ESSER) Assistance Listing Number: 84.425U Program Name: COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) U.S. Department of Health and Human Services Passed through the State Department of Public Health Assistance Listing Number: 93.268 Program Name: Immunization Cooperative Agreements Assistance Listing Number: 93.323 Program Name: COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases U.S. Department of Treasury Passed through the State of Connecticut Department of Education and the State Office of Early Childhood Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery FundsCriteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state awards (SESA) includes the accuracy and completeness of the schedules. The SEFA and SESA balance should be reconciled to the basic financial statements which are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP).The Uniform Guidance (2 CFR 200.510 (b) requires the auditee (the Town) to prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Condition: We identified 16 federal programs and 9 state programs requiring adjustment to the reported expenditures. We identified 4 programs included on the SEFA under the incorrect oversight agency. We also identified 2 programs missing from the SEFA. The Town failed to adequately perform a reconciliation of the SEFA and SESA to the financial statements. In addition, during testing of allowable costs, we discovered $98,252 of costs pertaining to FY2023 transactions that were included in the FY2024 SEFA, with a projected total error of $185,755. Cause: Grant management and reporting is not centralized within the Town and are left to the individual departments. Underlying accounting records are maintained on a budgetary basis until year end-reporting. Additionally, management as well as department heads are unfamiliar with grant accounting in accordance with U.S. GAAP. Effect or potential effect: This can result in an inaccurate amount reported in the SEFA, SESA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. Additionally, an inaccurate SEFA/SESA can result in incorrect identification of major programs leading to further delays and inefficiencies in the audit. Recommendation: We recommend that Town management, in coordination with the departments; establish policy and procedures to help to make certain all federal and state expended funds are captured timely and appropriately in the correct fiscal year in the SEFA and SESA. Questioned costs: None Context: See condition above. Repeat finding: This is a repeat of finding 2023-001. View of responsible official: We agree with the finding. See corrective action plan.
2024-004 – Material Weakness and Noncompliance, Completeness and Accuracy of Schedule of Expenditures of Federal and State Awards (Repeat Finding 2023-004) U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Assistance Listing Number: 10.560 Program Name: State Administrative Expenses for Child Nutrition Assistance Listing Number: 10.649 Program Name: COVID-19 Pandemic Electronic Benefit (P-EBT) Administrative Costs Department of Homeland Security Passed through the State of Connecticut Emergency Management and Homeland Security Assistance Listing Number: 97.042 Program Name: Emergency Management Performance Grant U.S. Department of Education Passed through the State of Connecticut Department of Education Assistance Listing Number: 84.010 Program Name: Title I Grants to Local Education Agencies Special Education Cluster (IDEA) Assistance Listing Number: 84.027 Program Name: Special Education Grants to States Assistance Listing Number: 84.027 Program Name: COVID-19 Special Education Grants to States Assistance Listing Number: 84.173 Program Name: Special Education Preschool Grants Assistance Listing Number: 84.173 Program Name: COVID-19 Special Education Preschool Grants Assistance Listing Number: 84.048 Program Name: Career and Technical Education – Basic Grants to States Assistance Listing Number: 84.365 Program Name: English Language Acquisition to State Grants Assistance Listing Number: 84.367 Program Name: Supporting Effective Instruction State Grants Assistance Listing Number: 84.424 Program Name: Student Support and Academic Enrichment Program Education Stabilization Fund: Assistance Listing Number: 84.425D Program Name: COVID-19 Elementary and Secondary School Relief Fund (ESSER) Assistance Listing Number: 84.425U Program Name: COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) U.S. Department of Health and Human Services Passed through the State Department of Public Health Assistance Listing Number: 93.268 Program Name: Immunization Cooperative Agreements Assistance Listing Number: 93.323 Program Name: COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases U.S. Department of Treasury Passed through the State of Connecticut Department of Education and the State Office of Early Childhood Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery FundsCriteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state awards (SESA) includes the accuracy and completeness of the schedules. The SEFA and SESA balance should be reconciled to the basic financial statements which are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP).The Uniform Guidance (2 CFR 200.510 (b) requires the auditee (the Town) to prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Condition: We identified 16 federal programs and 9 state programs requiring adjustment to the reported expenditures. We identified 4 programs included on the SEFA under the incorrect oversight agency. We also identified 2 programs missing from the SEFA. The Town failed to adequately perform a reconciliation of the SEFA and SESA to the financial statements. In addition, during testing of allowable costs, we discovered $98,252 of costs pertaining to FY2023 transactions that were included in the FY2024 SEFA, with a projected total error of $185,755. Cause: Grant management and reporting is not centralized within the Town and are left to the individual departments. Underlying accounting records are maintained on a budgetary basis until year end-reporting. Additionally, management as well as department heads are unfamiliar with grant accounting in accordance with U.S. GAAP. Effect or potential effect: This can result in an inaccurate amount reported in the SEFA, SESA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. Additionally, an inaccurate SEFA/SESA can result in incorrect identification of major programs leading to further delays and inefficiencies in the audit. Recommendation: We recommend that Town management, in coordination with the departments; establish policy and procedures to help to make certain all federal and state expended funds are captured timely and appropriately in the correct fiscal year in the SEFA and SESA. Questioned costs: None Context: See condition above. Repeat finding: This is a repeat of finding 2023-001. View of responsible official: We agree with the finding. See corrective action plan.
2024-004 – Material Weakness and Noncompliance, Completeness and Accuracy of Schedule of Expenditures of Federal and State Awards (Repeat Finding 2023-004) U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Assistance Listing Number: 10.560 Program Name: State Administrative Expenses for Child Nutrition Assistance Listing Number: 10.649 Program Name: COVID-19 Pandemic Electronic Benefit (P-EBT) Administrative Costs Department of Homeland Security Passed through the State of Connecticut Emergency Management and Homeland Security Assistance Listing Number: 97.042 Program Name: Emergency Management Performance Grant U.S. Department of Education Passed through the State of Connecticut Department of Education Assistance Listing Number: 84.010 Program Name: Title I Grants to Local Education Agencies Special Education Cluster (IDEA) Assistance Listing Number: 84.027 Program Name: Special Education Grants to States Assistance Listing Number: 84.027 Program Name: COVID-19 Special Education Grants to States Assistance Listing Number: 84.173 Program Name: Special Education Preschool Grants Assistance Listing Number: 84.173 Program Name: COVID-19 Special Education Preschool Grants Assistance Listing Number: 84.048 Program Name: Career and Technical Education – Basic Grants to States Assistance Listing Number: 84.365 Program Name: English Language Acquisition to State Grants Assistance Listing Number: 84.367 Program Name: Supporting Effective Instruction State Grants Assistance Listing Number: 84.424 Program Name: Student Support and Academic Enrichment Program Education Stabilization Fund: Assistance Listing Number: 84.425D Program Name: COVID-19 Elementary and Secondary School Relief Fund (ESSER) Assistance Listing Number: 84.425U Program Name: COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) U.S. Department of Health and Human Services Passed through the State Department of Public Health Assistance Listing Number: 93.268 Program Name: Immunization Cooperative Agreements Assistance Listing Number: 93.323 Program Name: COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases U.S. Department of Treasury Passed through the State of Connecticut Department of Education and the State Office of Early Childhood Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery FundsCriteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state awards (SESA) includes the accuracy and completeness of the schedules. The SEFA and SESA balance should be reconciled to the basic financial statements which are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP).The Uniform Guidance (2 CFR 200.510 (b) requires the auditee (the Town) to prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Condition: We identified 16 federal programs and 9 state programs requiring adjustment to the reported expenditures. We identified 4 programs included on the SEFA under the incorrect oversight agency. We also identified 2 programs missing from the SEFA. The Town failed to adequately perform a reconciliation of the SEFA and SESA to the financial statements. In addition, during testing of allowable costs, we discovered $98,252 of costs pertaining to FY2023 transactions that were included in the FY2024 SEFA, with a projected total error of $185,755. Cause: Grant management and reporting is not centralized within the Town and are left to the individual departments. Underlying accounting records are maintained on a budgetary basis until year end-reporting. Additionally, management as well as department heads are unfamiliar with grant accounting in accordance with U.S. GAAP. Effect or potential effect: This can result in an inaccurate amount reported in the SEFA, SESA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. Additionally, an inaccurate SEFA/SESA can result in incorrect identification of major programs leading to further delays and inefficiencies in the audit. Recommendation: We recommend that Town management, in coordination with the departments; establish policy and procedures to help to make certain all federal and state expended funds are captured timely and appropriately in the correct fiscal year in the SEFA and SESA. Questioned costs: None Context: See condition above. Repeat finding: This is a repeat of finding 2023-001. View of responsible official: We agree with the finding. See corrective action plan.
2024-004 – Material Weakness and Noncompliance, Completeness and Accuracy of Schedule of Expenditures of Federal and State Awards (Repeat Finding 2023-004) U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Assistance Listing Number: 10.560 Program Name: State Administrative Expenses for Child Nutrition Assistance Listing Number: 10.649 Program Name: COVID-19 Pandemic Electronic Benefit (P-EBT) Administrative Costs Department of Homeland Security Passed through the State of Connecticut Emergency Management and Homeland Security Assistance Listing Number: 97.042 Program Name: Emergency Management Performance Grant U.S. Department of Education Passed through the State of Connecticut Department of Education Assistance Listing Number: 84.010 Program Name: Title I Grants to Local Education Agencies Special Education Cluster (IDEA) Assistance Listing Number: 84.027 Program Name: Special Education Grants to States Assistance Listing Number: 84.027 Program Name: COVID-19 Special Education Grants to States Assistance Listing Number: 84.173 Program Name: Special Education Preschool Grants Assistance Listing Number: 84.173 Program Name: COVID-19 Special Education Preschool Grants Assistance Listing Number: 84.048 Program Name: Career and Technical Education – Basic Grants to States Assistance Listing Number: 84.365 Program Name: English Language Acquisition to State Grants Assistance Listing Number: 84.367 Program Name: Supporting Effective Instruction State Grants Assistance Listing Number: 84.424 Program Name: Student Support and Academic Enrichment Program Education Stabilization Fund: Assistance Listing Number: 84.425D Program Name: COVID-19 Elementary and Secondary School Relief Fund (ESSER) Assistance Listing Number: 84.425U Program Name: COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) U.S. Department of Health and Human Services Passed through the State Department of Public Health Assistance Listing Number: 93.268 Program Name: Immunization Cooperative Agreements Assistance Listing Number: 93.323 Program Name: COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases U.S. Department of Treasury Passed through the State of Connecticut Department of Education and the State Office of Early Childhood Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery FundsCriteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state awards (SESA) includes the accuracy and completeness of the schedules. The SEFA and SESA balance should be reconciled to the basic financial statements which are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP).The Uniform Guidance (2 CFR 200.510 (b) requires the auditee (the Town) to prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Condition: We identified 16 federal programs and 9 state programs requiring adjustment to the reported expenditures. We identified 4 programs included on the SEFA under the incorrect oversight agency. We also identified 2 programs missing from the SEFA. The Town failed to adequately perform a reconciliation of the SEFA and SESA to the financial statements. In addition, during testing of allowable costs, we discovered $98,252 of costs pertaining to FY2023 transactions that were included in the FY2024 SEFA, with a projected total error of $185,755. Cause: Grant management and reporting is not centralized within the Town and are left to the individual departments. Underlying accounting records are maintained on a budgetary basis until year end-reporting. Additionally, management as well as department heads are unfamiliar with grant accounting in accordance with U.S. GAAP. Effect or potential effect: This can result in an inaccurate amount reported in the SEFA, SESA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. Additionally, an inaccurate SEFA/SESA can result in incorrect identification of major programs leading to further delays and inefficiencies in the audit. Recommendation: We recommend that Town management, in coordination with the departments; establish policy and procedures to help to make certain all federal and state expended funds are captured timely and appropriately in the correct fiscal year in the SEFA and SESA. Questioned costs: None Context: See condition above. Repeat finding: This is a repeat of finding 2023-001. View of responsible official: We agree with the finding. See corrective action plan.
2024-004 – Material Weakness and Noncompliance, Completeness and Accuracy of Schedule of Expenditures of Federal and State Awards (Repeat Finding 2023-004) U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Assistance Listing Number: 10.560 Program Name: State Administrative Expenses for Child Nutrition Assistance Listing Number: 10.649 Program Name: COVID-19 Pandemic Electronic Benefit (P-EBT) Administrative Costs Department of Homeland Security Passed through the State of Connecticut Emergency Management and Homeland Security Assistance Listing Number: 97.042 Program Name: Emergency Management Performance Grant U.S. Department of Education Passed through the State of Connecticut Department of Education Assistance Listing Number: 84.010 Program Name: Title I Grants to Local Education Agencies Special Education Cluster (IDEA) Assistance Listing Number: 84.027 Program Name: Special Education Grants to States Assistance Listing Number: 84.027 Program Name: COVID-19 Special Education Grants to States Assistance Listing Number: 84.173 Program Name: Special Education Preschool Grants Assistance Listing Number: 84.173 Program Name: COVID-19 Special Education Preschool Grants Assistance Listing Number: 84.048 Program Name: Career and Technical Education – Basic Grants to States Assistance Listing Number: 84.365 Program Name: English Language Acquisition to State Grants Assistance Listing Number: 84.367 Program Name: Supporting Effective Instruction State Grants Assistance Listing Number: 84.424 Program Name: Student Support and Academic Enrichment Program Education Stabilization Fund: Assistance Listing Number: 84.425D Program Name: COVID-19 Elementary and Secondary School Relief Fund (ESSER) Assistance Listing Number: 84.425U Program Name: COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) U.S. Department of Health and Human Services Passed through the State Department of Public Health Assistance Listing Number: 93.268 Program Name: Immunization Cooperative Agreements Assistance Listing Number: 93.323 Program Name: COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases U.S. Department of Treasury Passed through the State of Connecticut Department of Education and the State Office of Early Childhood Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery FundsCriteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state awards (SESA) includes the accuracy and completeness of the schedules. The SEFA and SESA balance should be reconciled to the basic financial statements which are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP).The Uniform Guidance (2 CFR 200.510 (b) requires the auditee (the Town) to prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Condition: We identified 16 federal programs and 9 state programs requiring adjustment to the reported expenditures. We identified 4 programs included on the SEFA under the incorrect oversight agency. We also identified 2 programs missing from the SEFA. The Town failed to adequately perform a reconciliation of the SEFA and SESA to the financial statements. In addition, during testing of allowable costs, we discovered $98,252 of costs pertaining to FY2023 transactions that were included in the FY2024 SEFA, with a projected total error of $185,755. Cause: Grant management and reporting is not centralized within the Town and are left to the individual departments. Underlying accounting records are maintained on a budgetary basis until year end-reporting. Additionally, management as well as department heads are unfamiliar with grant accounting in accordance with U.S. GAAP. Effect or potential effect: This can result in an inaccurate amount reported in the SEFA, SESA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. Additionally, an inaccurate SEFA/SESA can result in incorrect identification of major programs leading to further delays and inefficiencies in the audit. Recommendation: We recommend that Town management, in coordination with the departments; establish policy and procedures to help to make certain all federal and state expended funds are captured timely and appropriately in the correct fiscal year in the SEFA and SESA. Questioned costs: None Context: See condition above. Repeat finding: This is a repeat of finding 2023-001. View of responsible official: We agree with the finding. See corrective action plan.
2024-004 – Material Weakness and Noncompliance, Completeness and Accuracy of Schedule of Expenditures of Federal and State Awards (Repeat Finding 2023-004) U.S. Department of Agriculture Passed through State of Connecticut Department of Education Child Nutrition Cluster Assistance Listing Number: 10.553 Program Name: School Breakfast Program Assistance Listing Number: 10.555 Program Name: National School Lunch Program Assistance Listing Number: 10.560 Program Name: State Administrative Expenses for Child Nutrition Assistance Listing Number: 10.649 Program Name: COVID-19 Pandemic Electronic Benefit (P-EBT) Administrative Costs Department of Homeland Security Passed through the State of Connecticut Emergency Management and Homeland Security Assistance Listing Number: 97.042 Program Name: Emergency Management Performance Grant U.S. Department of Education Passed through the State of Connecticut Department of Education Assistance Listing Number: 84.010 Program Name: Title I Grants to Local Education Agencies Special Education Cluster (IDEA) Assistance Listing Number: 84.027 Program Name: Special Education Grants to States Assistance Listing Number: 84.027 Program Name: COVID-19 Special Education Grants to States Assistance Listing Number: 84.173 Program Name: Special Education Preschool Grants Assistance Listing Number: 84.173 Program Name: COVID-19 Special Education Preschool Grants Assistance Listing Number: 84.048 Program Name: Career and Technical Education – Basic Grants to States Assistance Listing Number: 84.365 Program Name: English Language Acquisition to State Grants Assistance Listing Number: 84.367 Program Name: Supporting Effective Instruction State Grants Assistance Listing Number: 84.424 Program Name: Student Support and Academic Enrichment Program Education Stabilization Fund: Assistance Listing Number: 84.425D Program Name: COVID-19 Elementary and Secondary School Relief Fund (ESSER) Assistance Listing Number: 84.425U Program Name: COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief Fund (ARP ESSER) U.S. Department of Health and Human Services Passed through the State Department of Public Health Assistance Listing Number: 93.268 Program Name: Immunization Cooperative Agreements Assistance Listing Number: 93.323 Program Name: COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases U.S. Department of Treasury Passed through the State of Connecticut Department of Education and the State Office of Early Childhood Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery FundsCriteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state awards (SESA) includes the accuracy and completeness of the schedules. The SEFA and SESA balance should be reconciled to the basic financial statements which are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP).The Uniform Guidance (2 CFR 200.510 (b) requires the auditee (the Town) to prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Condition: We identified 16 federal programs and 9 state programs requiring adjustment to the reported expenditures. We identified 4 programs included on the SEFA under the incorrect oversight agency. We also identified 2 programs missing from the SEFA. The Town failed to adequately perform a reconciliation of the SEFA and SESA to the financial statements. In addition, during testing of allowable costs, we discovered $98,252 of costs pertaining to FY2023 transactions that were included in the FY2024 SEFA, with a projected total error of $185,755. Cause: Grant management and reporting is not centralized within the Town and are left to the individual departments. Underlying accounting records are maintained on a budgetary basis until year end-reporting. Additionally, management as well as department heads are unfamiliar with grant accounting in accordance with U.S. GAAP. Effect or potential effect: This can result in an inaccurate amount reported in the SEFA, SESA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. Additionally, an inaccurate SEFA/SESA can result in incorrect identification of major programs leading to further delays and inefficiencies in the audit. Recommendation: We recommend that Town management, in coordination with the departments; establish policy and procedures to help to make certain all federal and state expended funds are captured timely and appropriately in the correct fiscal year in the SEFA and SESA. Questioned costs: None Context: See condition above. Repeat finding: This is a repeat of finding 2023-001. View of responsible official: We agree with the finding. See corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name 21.011, U.S. Department of the Treasury Capital Magnet Fund Federal Award Identification Number and Year Year ended June 30, 2024 Pass through Entity Ohio Department of Development Supportive Housing Program Finding Type Significant deficiency Repeat Finding No Criteria Per 2 CFR Section 200.510(b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended determined in accordance with Section 200.502. Condition The expenditures were reported for the Capital Magnet Fund throughout the award period from the year ended June 30, 2019 to the year ended June 30, 2024 on the schedule of expenditures of federal awards (SEFA) but did not accurately report the amount of administrative expenditures incurred during the performance period, and, therefore, the SEFA was not complete and accurate for the year ended June 30, 2019 to the year ended June 30, 2024. Questioned Costs None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs were Undetermined or Otherwise Could Not be Reported N/A Identification of How Questioned Costs Were Computed N/A Context The Organization did not accurately report the administration costs on the SEFA. The Organization incorrectly omitted $375,000 of administration costs that were incurred during the year ended June 30, 2019; however, management implemented controls during the year ended June 30, 2024 that discovered the error, and, therefore, the $375,000 of omitted costs were included on the SEFA during the year ended June 30, 2024. Cause and Effect The Organization did not review all previously reported expenditures on the schedule of expenditures of federal awards for the Capital Magnet Program over the award period and omitted $375,000 of expenditures related to funding received from the Capital Magnet Fund for administrative costs. Recommendation We recommend the Organization implement a process and controls to have additional review of the SEFA compared to the Capital Magnet Performance Report to ensure the expenditures on the SEFA are complete and accurate and any errors are discovered and corrected timely. Views of Responsible Officials and Corrective Action Plan Management has implemented procedures and controls to ensure reports are reviewed prior to submission and distributed funds are reported properly and in the correct period.
2 CFR 200.328 states, in part, (c) the recipient or subrecipient must submit financial reports as required by the Federal award. Reports submitted annually by the recipient or subrecipient must be due no later than 90 calendar days after the reporting period. Reports submitted quarterly or semiannually must be due no later than 30 calendar days after the reporting period. (d) The final financial report submitted by the recipient must be due no later than 120 calendar days after the conclusion of the period of performance. A subrecipient must submit a final financial report to a pass-through entity no later than 90 calendar days after the conclusion of the period of performance. See also § 200.344. The Federal agency or pass-through entity may extend the due date for any financial report with justification from the recipient or subrecipient. Further, 2 CFR 200.502(a) states that the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. We noted that the District filed its FY23 final expenditure report by the required deadline. However, the District claimed $476,752 more in expenditures on the final expenditure report than they had identified in eligible expenditures for the program. The District reclassified $476,752 in ESSER expenditures from the general fund into the ESSER fund after the reporting deadline. We noted that this determination was made after the obligation period had ended and without an extension request being made to the pass-through agency, Ohio Department of Education and Workforce (ODEW) to extend the due date. Further, the ESSER expenditures adjusted from the general fund did not align with the object codes budgeted with ODEW through the Comprehensive Continuous Improvement Plan and reported on the final expenditure report. Additionally, system reports originally filed with ODEW along with the final expenditure report did not accurately reflect the expenditures ultimately claimed for the program. We recommend that the District adopt proper procedures to ensure that reported expenditures on the final expenditure report are accurate and obligated by the appropriate deadline. Requests to extend the due date of the reporting requirement should be made when necessary. Further, expenditures should only be made for objects budgeted and approved by ODEW. In instances where reclassifications are made to program expenditures, the District should ensure that revisions to previously submitted reports are made, when necessary.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria 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) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria 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) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria 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) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria 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) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria 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) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
2024-001 – Reporting - Preparation of the Schedule of Expenditures of Federal Awards Identification of the Federal Program – Department of Housing and Urban Development - 14.128 Mortgage Insurance Hospitals - FHA Section 242 Mortgage Insurance Program Loan Criteria – CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards (Schedule) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502”. Also, in accordance with CFR Section §200.302, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. Condition – We noted that there were adjustments needed to the Schedule to include initial debt issuance costs incurred and drawn during the period in connection with the new HUD mortgage secured during January 2024. Cause – Internal controls over review of the completeness of the Schedule were not properly implemented during the period of additional mortgages secured. Such internal controls were designed to require timely review of the completeness of the Schedule by appropriate personnel. Effect – The Schedule for the year ended June 30, 2024 inappropriately excluded $845,273 of related expenditures against the latest HUD mortgage established during January 2024. Questioned costs – none Context – Internal controls did not operate as intended to ensure the Schedule captured nonrecurring expenditures. In connection with securing the January 2024 HUD mortgage, certain debt issuance costs were charged against the mortgage upon closing. These expenditures were not part of the routine expenditure and draw processes and controls in place at the Authority due to their unique nature and infrequency. Therefore, management did not identify such initial closing costs for capture on the Schedule. Repeat finding – No Recommendation – We recommend the Schedule to be reviewed timely and with sufficient precision by the appropriate level of personnel and reconciliation of new HUD mortgage closing documents. View of Responsible Officials - Management agrees with the Federal Award Finding regarding the determination of when a Federal award is expended. As part of the Corrective Action Plan, management will validate mortgage activity against HUD mortgage provided information.
2024-003 Subrecipient Monitoring Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per 2 CFR sections 200.332(d) through (f), a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves the performance goals. Per 2 CFR section 200.502(a), the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs which is generally expenditure/expense transactions associated with awards. Condition: Subrecipients were not monitored timely enough to perform the necessary evaluation on subrecipient activities or to report expenditures on the schedule of expenditures of federal awards in the appropriate fiscal year. Cause: UAS did not receive invoices for certain subrecipients until after year-end close and for amounts covering an entire fiscal year and no amounts were accrued. Effect: Activities of the subrecipient could not be reviewed timely to ensure authorized use or for allowability with grant terms and conditions. Subrecipient expenditures on the schedule of expenditures of federal awards were understated by $344,948. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Context: Although subrecipient invoices were submitted after year-end close, UAS grant personnel reviewed expenses submitted for allowability and did not identify any disallowed costs. Repeat Finding: No. Recommendation: Establish a timeline for subrecipients to provide required reports to UAS in order to receive information during the fiscal year for monitoring during the post-award process. Review grant and subrecipient activity at year-end to evaluate whether all activity has been submitted and recorded. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.
2024-003 Subrecipient Monitoring Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per 2 CFR sections 200.332(d) through (f), a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves the performance goals. Per 2 CFR section 200.502(a), the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs which is generally expenditure/expense transactions associated with awards. Condition: Subrecipients were not monitored timely enough to perform the necessary evaluation on subrecipient activities or to report expenditures on the schedule of expenditures of federal awards in the appropriate fiscal year. Cause: UAS did not receive invoices for certain subrecipients until after year-end close and for amounts covering an entire fiscal year and no amounts were accrued. Effect: Activities of the subrecipient could not be reviewed timely to ensure authorized use or for allowability with grant terms and conditions. Subrecipient expenditures on the schedule of expenditures of federal awards were understated by $344,948. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Context: Although subrecipient invoices were submitted after year-end close, UAS grant personnel reviewed expenses submitted for allowability and did not identify any disallowed costs. Repeat Finding: No. Recommendation: Establish a timeline for subrecipients to provide required reports to UAS in order to receive information during the fiscal year for monitoring during the post-award process. Review grant and subrecipient activity at year-end to evaluate whether all activity has been submitted and recorded. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.
2024-003 Subrecipient Monitoring Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per 2 CFR sections 200.332(d) through (f), a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves the performance goals. Per 2 CFR section 200.502(a), the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs which is generally expenditure/expense transactions associated with awards. Condition: Subrecipients were not monitored timely enough to perform the necessary evaluation on subrecipient activities or to report expenditures on the schedule of expenditures of federal awards in the appropriate fiscal year. Cause: UAS did not receive invoices for certain subrecipients until after year-end close and for amounts covering an entire fiscal year and no amounts were accrued. Effect: Activities of the subrecipient could not be reviewed timely to ensure authorized use or for allowability with grant terms and conditions. Subrecipient expenditures on the schedule of expenditures of federal awards were understated by $344,948. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Context: Although subrecipient invoices were submitted after year-end close, UAS grant personnel reviewed expenses submitted for allowability and did not identify any disallowed costs. Repeat Finding: No. Recommendation: Establish a timeline for subrecipients to provide required reports to UAS in order to receive information during the fiscal year for monitoring during the post-award process. Review grant and subrecipient activity at year-end to evaluate whether all activity has been submitted and recorded. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.
2024-003 Subrecipient Monitoring Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per 2 CFR sections 200.332(d) through (f), a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves the performance goals. Per 2 CFR section 200.502(a), the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs which is generally expenditure/expense transactions associated with awards. Condition: Subrecipients were not monitored timely enough to perform the necessary evaluation on subrecipient activities or to report expenditures on the schedule of expenditures of federal awards in the appropriate fiscal year. Cause: UAS did not receive invoices for certain subrecipients until after year-end close and for amounts covering an entire fiscal year and no amounts were accrued. Effect: Activities of the subrecipient could not be reviewed timely to ensure authorized use or for allowability with grant terms and conditions. Subrecipient expenditures on the schedule of expenditures of federal awards were understated by $344,948. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Context: Although subrecipient invoices were submitted after year-end close, UAS grant personnel reviewed expenses submitted for allowability and did not identify any disallowed costs. Repeat Finding: No. Recommendation: Establish a timeline for subrecipients to provide required reports to UAS in order to receive information during the fiscal year for monitoring during the post-award process. Review grant and subrecipient activity at year-end to evaluate whether all activity has been submitted and recorded. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.
Program Name: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Federal loans are required to be reported on the Schedule of Expenditures of Federal Awards. (Section 200.502(b) of 2 CFR Part 200). Condition: The Organization had a federal loan of $500,000 received in a prior year that was not originally included on the Organization’s Schedule of Expenditures of Federal Awards (SEFA). This is a repeat finding of item 2023‐001. Cause of Condition: The Organization failed to properly identify the loan as needing to be reflected on the SEFA. Potential Effect of Condition: The Organization’s federal loan not being included in the audited SEFA. Recommendation: The Organization should establish policies and procedures to carefully review loans and consider whether they should be included on the SEFA. Views of Responsible Officials: Management has acknowledged that this should be included in the Schedule of Expenditures of Federal Awards and will include it as required in any applicable year. Management will implement federal grant and loan management policies and procedures and provide training to staff responsible for completing the Schedule of Expenditure of Federal Awards (SEFA) to ensure all federal grants and loans are included in the SEFA (pursuant to Section 200.502(b) of 2 CFR Part 200). Additionally, management will create and maintain an electronic repository of relevant federal grant and loan information that contains key information relating to each federal program to assist in preparing the SEFA.
Program Name: 14.239 Home Investment Partnership Program Criteria: Federal loans are required to be reported on the Schedule of Expenditures of Federal Awards. (Section 200.502(b) of 2 CFR Part 200). Condition: The Organization had a federal loan of $210,000 received in a prior year that was not originally included on the Organization’s Schedule of Expenditures of Federal Awards (SEFA). This is a repeat finding of item 2023‐002. Cause of Condition: The Organization failed to properly identify the loan as needing to be reflected on the Schedule of Expenditures of Federal Awards. Potential Effect of Condition: The Organization’s federal loan not being included in the audited Schedule of Expenditures of Federal Awards. Recommendation: The Organization should establish policies and procedures to carefully review loans and consider whether they should be included on the Schedule of Expenditures of Federal Awards. Views of Responsible Officials: Management has acknowledged that this should be included in the Schedule of Expenditures of Federal Awards and will include it as required in any applicable year. Management will implement federal grant and loan management policies and procedures and provide training to staff responsible for completing the Schedule of Expenditure of Federal Awards (SEFA) to ensure all federal grants and loans are included in the SEFA (pursuant to Section 200.502(b) of 2 CFR Part 200). Additionally, management will create and maintain an electronic repository of relevant federal grant and loan information that contains key information relating to each federal program to assist in preparing the SEFA.
Criteria: 2 CFR section 200.510(b) requires the auditee to prepare a Schedule of Expenditures of Federal Awards (“SEFA”) that must contain all federal awards expended during the period. 2 CFR section 200.502 requires proper tracking and accounting of federal expenditures incurred under the same basis of accounting as the basic financial statements to ensure proper cutoff and reporting. Condition: The School failed to timely prepare a complete and accurate SEFA. Cause: The School did not have an adequate process to track expenditures of federal awards for which purchases were made on the School’s behalf by the pass-through grantor. This resulted in the School’s initial draft of their SEFA not including all federal expenditures made by the School. Effect: Failure to adequately track all expenditures of federal awards could result in the SEFA being prepared inaccurately or in an untimely manner. Recommendation: Marshall Jones recommends that the School establish a process to track the expenditures of federal awards during the year, including awards for which purchases are made on the School’s behalf by the pass-through grantor. This will better enable the School to timely prepare a complete and accurate SEFA. Views of Responsible Officials: Management of the School concurs with the finding. Please refer to the Corrective Action Plan.
Criteria: 2 CFR 200.510 (b) requires an entity to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 (a), which states that determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Condition: During the FY2024 Uniform Guidance audit, we noted that there were $1.2 million of funds from this program that had underlying transaction dates from FY2023. These expenditures were not reported on the FY2023 SEFA but rather were included in the FY2024 SEFA. The omission in the prior year did not result in a change to the major program determination for the 2023 or 2024 audits. Cause: In April 2023, Drexel received a subaward for the SNAP Cluster and a new active fund account was created in the accounting system to track expenses after the subaward was signed. This was set up as a new active award in the system, however there was already an existing advance fund account set up in pre-award status prior to the subaward being executed. The FY2023 expenditures were recorded in pre-award fund account and not the new active fund account. Management included the new active fund account in the population for FY2023 SEFA reporting which had no expenditures and excluded the pre-award fund account with the $1.2 million of charges. This accounting for the FY2023 expenditures was corrected in July 2023 (FY2024) but not in time for SEFA reporting purposes. Effect: FY2023 SEFA expenditures for the SNAP cluster were understated by $1.2 million. This amount has been reported in the FY2024 SEFA. Questioned Costs: None; Recommendation: Management should enhance the control in place to perform a more precise review of award status and other reconciling items when preparing and reviewing the SEFA reconciliation to the financial statements. Management's View and Corrective Action Plan: Management agrees with the finding. Refer to the Management Corrective Action Plan on page 81.
Criteria: 2 CFR 200.510 (b) requires an entity to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 (a), which states that determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Condition: During the FY2024 Uniform Guidance audit, we noted that there were $1.2 million of funds from this program that had underlying transaction dates from FY2023. These expenditures were not reported on the FY2023 SEFA but rather were included in the FY2024 SEFA. The omission in the prior year did not result in a change to the major program determination for the 2023 or 2024 audits. Cause: In April 2023, Drexel received a subaward for the SNAP Cluster and a new active fund account was created in the accounting system to track expenses after the subaward was signed. This was set up as a new active award in the system, however there was already an existing advance fund account set up in pre-award status prior to the subaward being executed. The FY2023 expenditures were recorded in pre-award fund account and not the new active fund account. Management included the new active fund account in the population for FY2023 SEFA reporting which had no expenditures and excluded the pre-award fund account with the $1.2 million of charges. This accounting for the FY2023 expenditures was corrected in July 2023 (FY2024) but not in time for SEFA reporting purposes. Effect: FY2023 SEFA expenditures for the SNAP cluster were understated by $1.2 million. This amount has been reported in the FY2024 SEFA. Questioned Costs: None; Recommendation: Management should enhance the control in place to perform a more precise review of award status and other reconciling items when preparing and reviewing the SEFA reconciliation to the financial statements. Management's View and Corrective Action Plan: Management agrees with the finding. Refer to the Management Corrective Action Plan on page 81.
Criteria: 2 CFR 200.510 (b) requires an entity to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 (a), which states that determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Condition: During the FY2024 Uniform Guidance audit, we noted that there were $1.2 million of funds from this program that had underlying transaction dates from FY2023. These expenditures were not reported on the FY2023 SEFA but rather were included in the FY2024 SEFA. The omission in the prior year did not result in a change to the major program determination for the 2023 or 2024 audits. Cause: In April 2023, Drexel received a subaward for the SNAP Cluster and a new active fund account was created in the accounting system to track expenses after the subaward was signed. This was set up as a new active award in the system, however there was already an existing advance fund account set up in pre-award status prior to the subaward being executed. The FY2023 expenditures were recorded in pre-award fund account and not the new active fund account. Management included the new active fund account in the population for FY2023 SEFA reporting which had no expenditures and excluded the pre-award fund account with the $1.2 million of charges. This accounting for the FY2023 expenditures was corrected in July 2023 (FY2024) but not in time for SEFA reporting purposes. Effect: FY2023 SEFA expenditures for the SNAP cluster were understated by $1.2 million. This amount has been reported in the FY2024 SEFA. Questioned Costs: None; Recommendation: Management should enhance the control in place to perform a more precise review of award status and other reconciling items when preparing and reviewing the SEFA reconciliation to the financial statements. Management's View and Corrective Action Plan: Management agrees with the finding. Refer to the Management Corrective Action Plan on page 81.
Finding 2024-004 U.S. Department of Treasury Federal Award Year Ending June 30, 2024 COVID-19: Coronavirus State and Local Fiscal Recovery Funds Lack of internal controls over the preparation of the Schedule of Expenditures of Federal Awards Criteria: In accordance with 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal awards 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. Condition: The Schedule of Expenditures for Federal Awards for the year ended June 30, 2024, was initially overstated by $529,900 due to an improper subrecipient verses beneficiary determination for a grant. Cause: While this original grant agreement specified that the Foundation was a subrecipient, the Foundation did not timely review a 2024 grant amendment or obtain further correspondence from the granter that updated the initial subrecipient determination to now identify the Foundation as a beneficiary, resulting in the removal of $529,900 from the Schedule of Expenditures for Federal Awards. Effect or potential effect: Improper reporting of federal expenditures results in errors on the Schedule of Expenditures for Federal Awards and can lead to inaccurate major program determination. In this instance, the error did result in an update to the major program determination. Questioned costs: None. Context: During the audit, we reviewed a July 2024 grant amendment from the grantor that removed a number of the original grant requirements and reclassified the Foundation as a “grantee.” Upon further inquiry with the grantor, it was discovered that the Foundation is no longer considered a subrecipient. Thus, the Foundation is a beneficiary, which resulted in the removal of incurred costs of $529,900 from the Schedule of Expenditures of Federal Awards. Recommendation: To ensure accuracy of the Schedule of Expenditures of Federal Awards, the Foundation should improve the processes and controls around timely identification of potential federal awards, which includes enhancing the review of any grant amendments and timely contacting passthrough entities to verify potential updates to the subrecipient verses beneficiary determination. Views of responsible officials of the auditee: The Foundation agrees with the above finding, and its response is included in the corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name 84.425D, U.S. Department of Education, Education Stabilization Fund COVID 19 ESSER II Formula Fund II and 98c Learning Loss, and 84.425U, COVID 19 ESSER Education Equity Fund III Federal Award Identification Number and Year 213712, 213782, 213713, 2023 Pass through Entity Michigan Department of Education Finding Type Material weakness Criteria Per 2 CFR 200.510(b) and Section 500.508(b) of Title 2, Subtitle A, Chapter II, Part 200, Subpart F, auditees must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with Section 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition The schedule of expenditures of federal awards (SEFA) contained inaccuracies and incomplete information that was identified during the audit. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context Multiple grants were presented inaccurately from the SEFA prepared by management in federal payments received and expenditures reported, which was identified by the auditor during the annual audit and subsequently corrected on the SEFA. The inaccuracies was a combination of amounts recorded in the School District's ledger that were incorrectly reflected on the SEFA, and amounts that required adjustment in the School District's ledger and also on the SEFA that was identified in the course of the audit. Cause and Effect The School District did not have sufficient controls in place to properly reconcile federal revenue to the federal expenditures reflected on the SEFA to validate that all federal grants awarded and expended were included in the SEFA and presented accurately. Recommendation The School District should implement a process to ensure that the SEFA is prepared timely and that all grant expenditures are included accurately. Views of Responsible Officials and Corrective Action Plan The School District will develop a SEFA checklist to help ensure all federal expenditures are properly reported. Additional processes will be put in place by management to review the SEFA in advance of the annual audit to effectively meet audit report timelines and help ensure completeness, validity, and accuracy of the final SEFA reporting.
Assistance Listing Number, Federal Agency, and Program Name 84.425D, U.S. Department of Education, Education Stabilization Fund COVID 19 ESSER II Formula Fund II and 98c Learning Loss, and 84.425U, COVID 19 ESSER Education Equity Fund III Federal Award Identification Number and Year 213712, 213782, 213713, 2023 Pass through Entity Michigan Department of Education Finding Type Material weakness Criteria Per 2 CFR 200.510(b) and Section 500.508(b) of Title 2, Subtitle A, Chapter II, Part 200, Subpart F, auditees must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with Section 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition The schedule of expenditures of federal awards (SEFA) contained inaccuracies and incomplete information that was identified during the audit. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context Multiple grants were presented inaccurately from the SEFA prepared by management in federal payments received and expenditures reported, which was identified by the auditor during the annual audit and subsequently corrected on the SEFA. The inaccuracies was a combination of amounts recorded in the School District's ledger that were incorrectly reflected on the SEFA, and amounts that required adjustment in the School District's ledger and also on the SEFA that was identified in the course of the audit. Cause and Effect The School District did not have sufficient controls in place to properly reconcile federal revenue to the federal expenditures reflected on the SEFA to validate that all federal grants awarded and expended were included in the SEFA and presented accurately. Recommendation The School District should implement a process to ensure that the SEFA is prepared timely and that all grant expenditures are included accurately. Views of Responsible Officials and Corrective Action Plan The School District will develop a SEFA checklist to help ensure all federal expenditures are properly reported. Additional processes will be put in place by management to review the SEFA in advance of the annual audit to effectively meet audit report timelines and help ensure completeness, validity, and accuracy of the final SEFA reporting.
Assistance Listing Number, Federal Agency, and Program Name 84.425D, U.S. Department of Education, Education Stabilization Fund COVID 19 ESSER II Formula Fund II and 98c Learning Loss, and 84.425U, COVID 19 ESSER Education Equity Fund III Federal Award Identification Number and Year 213712, 213782, 213713, 2023 Pass through Entity Michigan Department of Education Finding Type Material weakness Criteria Per 2 CFR 200.510(b) and Section 500.508(b) of Title 2, Subtitle A, Chapter II, Part 200, Subpart F, auditees must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with Section 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition The schedule of expenditures of federal awards (SEFA) contained inaccuracies and incomplete information that was identified during the audit. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context Multiple grants were presented inaccurately from the SEFA prepared by management in federal payments received and expenditures reported, which was identified by the auditor during the annual audit and subsequently corrected on the SEFA. The inaccuracies was a combination of amounts recorded in the School District's ledger that were incorrectly reflected on the SEFA, and amounts that required adjustment in the School District's ledger and also on the SEFA that was identified in the course of the audit. Cause and Effect The School District did not have sufficient controls in place to properly reconcile federal revenue to the federal expenditures reflected on the SEFA to validate that all federal grants awarded and expended were included in the SEFA and presented accurately. Recommendation The School District should implement a process to ensure that the SEFA is prepared timely and that all grant expenditures are included accurately. Views of Responsible Officials and Corrective Action Plan The School District will develop a SEFA checklist to help ensure all federal expenditures are properly reported. Additional processes will be put in place by management to review the SEFA in advance of the annual audit to effectively meet audit report timelines and help ensure completeness, validity, and accuracy of the final SEFA reporting.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires 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 section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-008: Allowable Costs Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239); COVID-19 - Emergency Rental Assistance (ALN 21.023); COVID-19—Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Compliance Finding and Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR 200.502 which states, “The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs.” The Agency is also required to comply with 2 CFR 200.403 which indicates that allowable costs must be determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Appendix VII to 2 CFR 200—State/Local Government and Indian Tribe-Wide Central Service Cost Allocation Plans 2 states, “Indirect cost rates will be reviewed, negotiated, and approved by the cognizant agency on a timely basis. Once a rate has been agreed upon, it will be accepted and used by all Federal agencies unless prohibited or limited by statute. Where a Federal awarding agency has reason to believe that special operating factors affecting its Federal awards necessitate special indirect cost rates, the funding agency will, prior to the time the rates are negotiated, notify the cognizant agency for indirect costs.” Condition: We noted the Agency charged $119,169 of direct and indirect costs from fiscal year 2021 and 2022, and direct costs from fiscal year 2023 to COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) in fiscal year 2024. We noted the Agency charged $426,504 of direct costs from fiscal year 2021 through 2023 to COVID-19 - Emergency Rental Assistance (ALN 21.023). We noted the Agency charged $1,153,427 of direct costs from fiscal year 2021 through 2023 to COVID-19—Homeowner Assistance Fund Program (ALN 21.026) in fiscal year 2024. These costs do not meet the allowable cost criteria as they were not determined in accordance with GAAP which requires expenses to be recorded when incurred. The Agency had an approved indirect cost rate which allowed them to charge the indirect costs in those previous fiscal years. Cause: The Agency incorrectly charged direct and indirect costs in fiscal year 2024 that were incurred in previous fiscal years for the programs noted above. Effect: The Agency inappropriately charged the above federal programs for direct and indirect costs in fiscal year 2024. During the audit, the Agency reevaluated its direct and indirect costs incurred in previous years that were charged in fiscal year 2024. The Agency identified additional direct and indirect costs incurred in fiscal year 2024 that were eligible to be charged to ALN 14.239, ALN 21.023, and ALN 21.026 which were not previously charged to the program to offset a portion of the errors identified above. This resulted in the expenditures charged to ALN 14.239, ALN 21.023, and ALN 21.026 being overstated by $99,928, $0, and $403,795, respectively. Questioned Costs: ALN 14.239 – $119,169; ALN 21.023 – $426,504; ALN 21.026 – $1,153,427; Total – $1,699,100 Context: The Agency’s expenditures of federal awards charged to ALN 14.239, ALN 21.023 and ALN 21.026 were overstated $119,169, $426,504, and $1,153,427, respectively. During the audit, the Agency identified additional direct and indirect costs incurred in fiscal year 2024 that were eligible to be charged to ALN 14.239, ALN 21.023, and ALN 21.026 which were not previously charged to the program which resulted in the expenditures charged to ALN 14.239, ALN 21.023, and ALN 21.026 being overstated by $99,928, $0, and $403,795, respectively. The total expenditures for ALN 14.239, ALN 21.023, and ALN 21.026 are $81,364,920, $41,673,294, and $14,339,711, respectively. Repeat Finding?: No Recommendation: The Agency should charge direct and indirect costs to federal programs in the year the costs are incurred and using its approved indirect cost rate. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires 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 section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-008: Allowable Costs Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239); COVID-19 - Emergency Rental Assistance (ALN 21.023); COVID-19—Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Compliance Finding and Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR 200.502 which states, “The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs.” The Agency is also required to comply with 2 CFR 200.403 which indicates that allowable costs must be determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Appendix VII to 2 CFR 200—State/Local Government and Indian Tribe-Wide Central Service Cost Allocation Plans 2 states, “Indirect cost rates will be reviewed, negotiated, and approved by the cognizant agency on a timely basis. Once a rate has been agreed upon, it will be accepted and used by all Federal agencies unless prohibited or limited by statute. Where a Federal awarding agency has reason to believe that special operating factors affecting its Federal awards necessitate special indirect cost rates, the funding agency will, prior to the time the rates are negotiated, notify the cognizant agency for indirect costs.” Condition: We noted the Agency charged $119,169 of direct and indirect costs from fiscal year 2021 and 2022, and direct costs from fiscal year 2023 to COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) in fiscal year 2024. We noted the Agency charged $426,504 of direct costs from fiscal year 2021 through 2023 to COVID-19 - Emergency Rental Assistance (ALN 21.023). We noted the Agency charged $1,153,427 of direct costs from fiscal year 2021 through 2023 to COVID-19—Homeowner Assistance Fund Program (ALN 21.026) in fiscal year 2024. These costs do not meet the allowable cost criteria as they were not determined in accordance with GAAP which requires expenses to be recorded when incurred. The Agency had an approved indirect cost rate which allowed them to charge the indirect costs in those previous fiscal years. Cause: The Agency incorrectly charged direct and indirect costs in fiscal year 2024 that were incurred in previous fiscal years for the programs noted above. Effect: The Agency inappropriately charged the above federal programs for direct and indirect costs in fiscal year 2024. During the audit, the Agency reevaluated its direct and indirect costs incurred in previous years that were charged in fiscal year 2024. The Agency identified additional direct and indirect costs incurred in fiscal year 2024 that were eligible to be charged to ALN 14.239, ALN 21.023, and ALN 21.026 which were not previously charged to the program to offset a portion of the errors identified above. This resulted in the expenditures charged to ALN 14.239, ALN 21.023, and ALN 21.026 being overstated by $99,928, $0, and $403,795, respectively. Questioned Costs: ALN 14.239 – $119,169; ALN 21.023 – $426,504; ALN 21.026 – $1,153,427; Total – $1,699,100 Context: The Agency’s expenditures of federal awards charged to ALN 14.239, ALN 21.023 and ALN 21.026 were overstated $119,169, $426,504, and $1,153,427, respectively. During the audit, the Agency identified additional direct and indirect costs incurred in fiscal year 2024 that were eligible to be charged to ALN 14.239, ALN 21.023, and ALN 21.026 which were not previously charged to the program which resulted in the expenditures charged to ALN 14.239, ALN 21.023, and ALN 21.026 being overstated by $99,928, $0, and $403,795, respectively. The total expenditures for ALN 14.239, ALN 21.023, and ALN 21.026 are $81,364,920, $41,673,294, and $14,339,711, respectively. Repeat Finding?: No Recommendation: The Agency should charge direct and indirect costs to federal programs in the year the costs are incurred and using its approved indirect cost rate. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires 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 section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires 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 section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-008: Allowable Costs Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239); COVID-19 - Emergency Rental Assistance (ALN 21.023); COVID-19—Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Compliance Finding and Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR 200.502 which states, “The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs.” The Agency is also required to comply with 2 CFR 200.403 which indicates that allowable costs must be determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Appendix VII to 2 CFR 200—State/Local Government and Indian Tribe-Wide Central Service Cost Allocation Plans 2 states, “Indirect cost rates will be reviewed, negotiated, and approved by the cognizant agency on a timely basis. Once a rate has been agreed upon, it will be accepted and used by all Federal agencies unless prohibited or limited by statute. Where a Federal awarding agency has reason to believe that special operating factors affecting its Federal awards necessitate special indirect cost rates, the funding agency will, prior to the time the rates are negotiated, notify the cognizant agency for indirect costs.” Condition: We noted the Agency charged $119,169 of direct and indirect costs from fiscal year 2021 and 2022, and direct costs from fiscal year 2023 to COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) in fiscal year 2024. We noted the Agency charged $426,504 of direct costs from fiscal year 2021 through 2023 to COVID-19 - Emergency Rental Assistance (ALN 21.023). We noted the Agency charged $1,153,427 of direct costs from fiscal year 2021 through 2023 to COVID-19—Homeowner Assistance Fund Program (ALN 21.026) in fiscal year 2024. These costs do not meet the allowable cost criteria as they were not determined in accordance with GAAP which requires expenses to be recorded when incurred. The Agency had an approved indirect cost rate which allowed them to charge the indirect costs in those previous fiscal years. Cause: The Agency incorrectly charged direct and indirect costs in fiscal year 2024 that were incurred in previous fiscal years for the programs noted above. Effect: The Agency inappropriately charged the above federal programs for direct and indirect costs in fiscal year 2024. During the audit, the Agency reevaluated its direct and indirect costs incurred in previous years that were charged in fiscal year 2024. The Agency identified additional direct and indirect costs incurred in fiscal year 2024 that were eligible to be charged to ALN 14.239, ALN 21.023, and ALN 21.026 which were not previously charged to the program to offset a portion of the errors identified above. This resulted in the expenditures charged to ALN 14.239, ALN 21.023, and ALN 21.026 being overstated by $99,928, $0, and $403,795, respectively. Questioned Costs: ALN 14.239 – $119,169; ALN 21.023 – $426,504; ALN 21.026 – $1,153,427; Total – $1,699,100 Context: The Agency’s expenditures of federal awards charged to ALN 14.239, ALN 21.023 and ALN 21.026 were overstated $119,169, $426,504, and $1,153,427, respectively. During the audit, the Agency identified additional direct and indirect costs incurred in fiscal year 2024 that were eligible to be charged to ALN 14.239, ALN 21.023, and ALN 21.026 which were not previously charged to the program which resulted in the expenditures charged to ALN 14.239, ALN 21.023, and ALN 21.026 being overstated by $99,928, $0, and $403,795, respectively. The total expenditures for ALN 14.239, ALN 21.023, and ALN 21.026 are $81,364,920, $41,673,294, and $14,339,711, respectively. Repeat Finding?: No Recommendation: The Agency should charge direct and indirect costs to federal programs in the year the costs are incurred and using its approved indirect cost rate. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires 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 section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-008: Allowable Costs Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239); COVID-19 - Emergency Rental Assistance (ALN 21.023); COVID-19—Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Compliance Finding and Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR 200.502 which states, “The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs.” The Agency is also required to comply with 2 CFR 200.403 which indicates that allowable costs must be determined in accordance with accounting principles generally accepted in the United States of America (GAAP). Appendix VII to 2 CFR 200—State/Local Government and Indian Tribe-Wide Central Service Cost Allocation Plans 2 states, “Indirect cost rates will be reviewed, negotiated, and approved by the cognizant agency on a timely basis. Once a rate has been agreed upon, it will be accepted and used by all Federal agencies unless prohibited or limited by statute. Where a Federal awarding agency has reason to believe that special operating factors affecting its Federal awards necessitate special indirect cost rates, the funding agency will, prior to the time the rates are negotiated, notify the cognizant agency for indirect costs.” Condition: We noted the Agency charged $119,169 of direct and indirect costs from fiscal year 2021 and 2022, and direct costs from fiscal year 2023 to COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) in fiscal year 2024. We noted the Agency charged $426,504 of direct costs from fiscal year 2021 through 2023 to COVID-19 - Emergency Rental Assistance (ALN 21.023). We noted the Agency charged $1,153,427 of direct costs from fiscal year 2021 through 2023 to COVID-19—Homeowner Assistance Fund Program (ALN 21.026) in fiscal year 2024. These costs do not meet the allowable cost criteria as they were not determined in accordance with GAAP which requires expenses to be recorded when incurred. The Agency had an approved indirect cost rate which allowed them to charge the indirect costs in those previous fiscal years. Cause: The Agency incorrectly charged direct and indirect costs in fiscal year 2024 that were incurred in previous fiscal years for the programs noted above. Effect: The Agency inappropriately charged the above federal programs for direct and indirect costs in fiscal year 2024. During the audit, the Agency reevaluated its direct and indirect costs incurred in previous years that were charged in fiscal year 2024. The Agency identified additional direct and indirect costs incurred in fiscal year 2024 that were eligible to be charged to ALN 14.239, ALN 21.023, and ALN 21.026 which were not previously charged to the program to offset a portion of the errors identified above. This resulted in the expenditures charged to ALN 14.239, ALN 21.023, and ALN 21.026 being overstated by $99,928, $0, and $403,795, respectively. Questioned Costs: ALN 14.239 – $119,169; ALN 21.023 – $426,504; ALN 21.026 – $1,153,427; Total – $1,699,100 Context: The Agency’s expenditures of federal awards charged to ALN 14.239, ALN 21.023 and ALN 21.026 were overstated $119,169, $426,504, and $1,153,427, respectively. During the audit, the Agency identified additional direct and indirect costs incurred in fiscal year 2024 that were eligible to be charged to ALN 14.239, ALN 21.023, and ALN 21.026 which were not previously charged to the program which resulted in the expenditures charged to ALN 14.239, ALN 21.023, and ALN 21.026 being overstated by $99,928, $0, and $403,795, respectively. The total expenditures for ALN 14.239, ALN 21.023, and ALN 21.026 are $81,364,920, $41,673,294, and $14,339,711, respectively. Repeat Finding?: No Recommendation: The Agency should charge direct and indirect costs to federal programs in the year the costs are incurred and using its approved indirect cost rate. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
2024-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Programs: Department of Housing and Urban Development Federal Assistance Listing Number: 14.218 Federal Assistance Listing Name: Community Development Block Grants/Entitlement Grants Grant Number: CV-2-8 Department of Health and Human Services Federal Assistance Listing Number: 93.566 Federal Assistance Listing Name: Refugee and Entrant Assistance - State-Administered Programs Grant Number: JA-FSA-RSS-2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
2024-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Programs: Department of Housing and Urban Development Federal Assistance Listing Number: 14.218 Federal Assistance Listing Name: Community Development Block Grants/Entitlement Grants Grant Number: CV-2-8 Department of Health and Human Services Federal Assistance Listing Number: 93.566 Federal Assistance Listing Name: Refugee and Entrant Assistance - State-Administered Programs Grant Number: JA-FSA-RSS-2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
2024-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Programs: Department of Housing and Urban Development Federal Assistance Listing Number: 14.218 Federal Assistance Listing Name: Community Development Block Grants/Entitlement Grants Grant Number: CV-2-8 Department of Health and Human Services Federal Assistance Listing Number: 93.566 Federal Assistance Listing Name: Refugee and Entrant Assistance - State-Administered Programs Grant Number: JA-FSA-RSS-2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
Finding 2024-00 – Preparation of Schedule of Expenditures of Federal Awards Federal Agency: United States Department of Health and Human Services Federal Program Name: Foster Care Title IV-E Assistance Listing Number: 93.658 Pass-Through Agency: Pennsylvania Department of Human Services Award Period: 7/1/2023 – 6/30/2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.510(a) states the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements. The schedule must include the total federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, the Organization receives funding from various counties across the state of Pennsylvania which consists of commingled federal, state, and local assistance with contract terms that stipulate it is the contractor’s responsibility to solicit the counties for purposes of determining the source of funding provided. Condition and Context: The expenditures included on the schedule of expenditures of federal awards (Schedule) initially prepared by the Organization included expenditures of state and local assistance. Questioned Costs: $-0- Cause: The Organization did not perform their responsibilities under the contract terms, which state it is their responsibility to solicit the counties for purposes of determining the source of funding provided during the fiscal year. Additionally, the Organization did not have adequate policies and procedures in place for accurately determining the breakdown of the commingled assistance received. Effect: The Schedule prepared by the Organization did not accurately present the federal awards expended during the fiscal year. Repeat finding: No Recommendation: We recommend the following: The Organization should establish policies and procedures to understand and ensure compliance with the Organization’s contractual obligations. The Organization should create and implement procedures to timely and accurately determine the source of funding received through various county contracts. The Organization should implement review procedures to ensure the Schedule is complete, accurate and prepared in accordance with the requirements set forth within 2 CFR 200.510. View of Responsible Officials: Management agrees with the finding and will take the necessary corrective actions.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.