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.
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.
Finding 2024-001: Preparation of the Schedule of Expenditures of Federal Awards Material weakness/other matter noncompliance Identification of federal programs: • ALN 98.001: USAID Foreign Assistance for Programs Overseas awarded by the U.S Agency for International Development, specifically contract 72061522CA00003 for fiscal year 2024. • ALN 19.705: Trans-National Crime awarded by the U.S. Department of State Bureau of International Narcotics and Law Enforcement Affairs, specifically contract SINLEC21GR3379, and the indirect award passed though the Humane Society of the United States for fiscal year 2024. Criteria: The Uniform Guidance (2 CFR 200.510b) requires that the auditee (typically a non-federal entity receiving federal funds) must prepare a Schedule of Expenditures of Federal Awards for the period covered by its financial statements which must include the total Federal Awards expended as determined in accordance with 2 CFR 200.502. Condition: The Schedule of Expenditures of Federal Awards for the year ended June 30, 2024 improperly excluded the awards provided to sub-recipients from the total expenditures reported for the federal awards for ALN 98.001 USAID Foreign Assistance for Programs Overseas and ALN 19.705 Trans-National Crime. Cause: There was an error in the formula that linked the supporting schedule to the schedule of expenditures of federal awards. Effect: Not in compliance with the Uniform Guidance (2 CFR 200.510b). There could be impacts on future funding. Questioned costs: None. Context: Total federal awards for ALN 98.001 USAID Foreign Assistance for Programs Overseas improperly excluded subrecipient awards from the total in the amount of $143,937. Total federal awards for ALN 19.705 Trans-National Crime improperly excluded subrecipient awards from the total in the amount of $166,877. Repeat Finding: No Recommendation: We recommend that the Organization review the schedule of expenditures of federal awards prior to issuance. Views of responsible officials and planned corrective actions: Management agrees with the finding. See corrective action plan.
Finding 2024-001: Preparation of the Schedule of Expenditures of Federal Awards Material weakness/other matter noncompliance Identification of federal programs: • ALN 98.001: USAID Foreign Assistance for Programs Overseas awarded by the U.S Agency for International Development, specifically contract 72061522CA00003 for fiscal year 2024. • ALN 19.705: Trans-National Crime awarded by the U.S. Department of State Bureau of International Narcotics and Law Enforcement Affairs, specifically contract SINLEC21GR3379, and the indirect award passed though the Humane Society of the United States for fiscal year 2024. Criteria: The Uniform Guidance (2 CFR 200.510b) requires that the auditee (typically a non-federal entity receiving federal funds) must prepare a Schedule of Expenditures of Federal Awards for the period covered by its financial statements which must include the total Federal Awards expended as determined in accordance with 2 CFR 200.502. Condition: The Schedule of Expenditures of Federal Awards for the year ended June 30, 2024 improperly excluded the awards provided to sub-recipients from the total expenditures reported for the federal awards for ALN 98.001 USAID Foreign Assistance for Programs Overseas and ALN 19.705 Trans-National Crime. Cause: There was an error in the formula that linked the supporting schedule to the schedule of expenditures of federal awards. Effect: Not in compliance with the Uniform Guidance (2 CFR 200.510b). There could be impacts on future funding. Questioned costs: None. Context: Total federal awards for ALN 98.001 USAID Foreign Assistance for Programs Overseas improperly excluded subrecipient awards from the total in the amount of $143,937. Total federal awards for ALN 19.705 Trans-National Crime improperly excluded subrecipient awards from the total in the amount of $166,877. Repeat Finding: No Recommendation: We recommend that the Organization review the schedule of expenditures of federal awards prior to issuance. Views of responsible officials and planned corrective actions: Management agrees with the finding. See corrective action plan.
Finding 2024-001: Preparation of the Schedule of Expenditures of Federal Awards Material weakness/other matter noncompliance Identification of federal programs: • ALN 98.001: USAID Foreign Assistance for Programs Overseas awarded by the U.S Agency for International Development, specifically contract 72061522CA00003 for fiscal year 2024. • ALN 19.705: Trans-National Crime awarded by the U.S. Department of State Bureau of International Narcotics and Law Enforcement Affairs, specifically contract SINLEC21GR3379, and the indirect award passed though the Humane Society of the United States for fiscal year 2024. Criteria: The Uniform Guidance (2 CFR 200.510b) requires that the auditee (typically a non-federal entity receiving federal funds) must prepare a Schedule of Expenditures of Federal Awards for the period covered by its financial statements which must include the total Federal Awards expended as determined in accordance with 2 CFR 200.502. Condition: The Schedule of Expenditures of Federal Awards for the year ended June 30, 2024 improperly excluded the awards provided to sub-recipients from the total expenditures reported for the federal awards for ALN 98.001 USAID Foreign Assistance for Programs Overseas and ALN 19.705 Trans-National Crime. Cause: There was an error in the formula that linked the supporting schedule to the schedule of expenditures of federal awards. Effect: Not in compliance with the Uniform Guidance (2 CFR 200.510b). There could be impacts on future funding. Questioned costs: None. Context: Total federal awards for ALN 98.001 USAID Foreign Assistance for Programs Overseas improperly excluded subrecipient awards from the total in the amount of $143,937. Total federal awards for ALN 19.705 Trans-National Crime improperly excluded subrecipient awards from the total in the amount of $166,877. Repeat Finding: No Recommendation: We recommend that the Organization review the schedule of expenditures of federal awards prior to issuance. Views of responsible officials and planned corrective actions: Management agrees with the finding. See corrective action plan.
2024 – 002: Schedule of Expenditure of Federal Awards (SEFA) Preparation Type of Finding: • Material Weakness in Internal Control Over Financial Reporting Condition: During testing, it was noted the School’s prepared SEFA did not properly reconcile to the underlying School records, which required additional adjustments of approximately $583,000. Criteria or specific requirement: 2 CFR 200.510(b) states: Schedule of expenditures of federal awards. 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 § 200.502 Basis for determining federal awards expended. 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. For example, when a federal program has multiple federal award years, the auditee may list the amount of federal awards expended for each federal award year separately. At a minimum, the schedule must: • List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services. • For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. • Provide total Federal awards expended for each individual Federal program and the Assistance Listing number or other identifying number when the Assistance Listing information is not available. For a cluster of programs also provide the total for the cluster. • Include the total amount provided to subrecipients from each Federal program. • For loan or loan guarantee programs described in §200.502 Basis for determining federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. • Include notes that describe that significant accounting policies used in preparing the schedule, and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. Effect: Without a proper system of internal controls in place that operated effectively, material misstatements of the SEFA remained undetected. Cause: Management had not established an effective system of internal controls that would have ensured proper reporting of the SEFA. Repeat finding: Yes – 2023-004. Recommendation: We recommend the school implement internal controls over the SEFA including a reconciliation and review process before submission. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.
Finding 2024-003 - Material Weakness in Internal Control over Compliance and Material Noncompliance (Qualified Opinion) - Inadequate Tracking of Expenditures and Retention of Documentation: Activities Allowed or Unallowed: Allowable Costs/Cost Principles and Reporting (A/B/L) for Assistance Listing Number 19.510 and 93.567 Criteria: The Code of Federal Regulations (CFR) Section 200.510(b) states in part, “The auditee must also prepare a schedule of federal expenditures for the period covered by the auditee’s consolidated 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(b) - Financial Management, the auditees financial management system must provide 1) identification of all federal awards received and expended; 2) accurate, current, and complete disclosure of the financial results of each federal award or program; 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; 5) comparison of expenditures with budget amounts for each Federal award; 6) written procedures to implement the requirements of section 200.305 and; 7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the Federal award. Recipients of federal awards must submit accurate, complete and timely financial and performance reports. The Organization should have internal controls designed to ensure compliance with those provisions. The Organization should retain sufficient documentation such as invoice and allocation support for expenditures to retain documentation for audit purposes. Condition: During detail testing of expenditures, it was noted that the Organization did not maintain adequate documentation to support how certain costs were allocated to the federal program. Several transactions lacked sufficient detail, such as invoice or expense reimbursement form. Several expenditures selected for testing did not obtain sufficient approval by an individual at the Organization. There was one instance of employee compensation being processed at an approved pay rate and the Center could not provide any supporting documentation such as an offer letter, to substantiate the rate paid. It was noted that quarterly reports provided to the federal program were not reviewed by an individual at the Organization prior to submission to ensure accurate report of expenditures. 2 of the 8 monthly reports sampled were not submitted timely to the grantor. Cause: The Organization does not have an adequate system in place to ensure quarterly reports have sufficient supporting documentation, proper approval/review, and accurate reporting prior to submission. Responsibilities for expenditure tracking were not clearly assigned, and there was no formal review process in place. The Organization is not following their Document Retention Policy. Effect: The effect of this condition increases the possibility that quarterly financial reports are misstated or inaccurate and increase the risk of noncompliance with federal requirements. The effect of this condition also increases the risk that expenditures are unallowable per the grant, federal regulations, or cost principles due to the insufficient support of proper approval retained. Questioned costs: None Repeat Finding: Yes - 2023-003 Recommendation: Policies and procedures should be in place to ensure quarterly financial reports are properly supported, accurately reported, and adequately approved and reviewed. A formal review process should be established to ensure compliance. The Organization should follow the Document Retention Policy that was put in place and required by law and submit the required reporting documentation timely to the grantor to ensure compliance. Views of Responsible Officials: Management agrees with this finding and their response is included in the Corrective Action Plan.
Federal Expenditures Not Reported in the Schedule of Federal Expenditures of Federal Awards and State Financial Assistance (“SEFA”) Federal Program: Coronavirus State and Local Fiscal Recovery Funds CFDA / Assistance Listing Number: 21.027 Federal Agency: U. S. Department of Treasury Pass-Through Entity: Tennessee Department of Environment and Conservation Fiscal Year Ended June 30, 2024 Criteria Per 2 CFR §200.510(b) and 2 CFR §200.502, entities expending federal awards must accurately identify all federal awards expended during the period and prepare a complete and accurate SEFA that is consistent with amounts recorded in the financial statements. Condition and Context During a subsequent audit, it was identified that federal expenditures totaling $867,515 were not recorded as federal grant revenue or accounts receivable in the financial statements and were also omitted from the SEFA. The amounts were material to total federal expenditures reported under the Uniform Guidance. Cause The omission occurred due to oversight in year-end closing and grant reconciliation procedures, which did not capture the unrecorded federal expenditures at fiscal year-end. Effect The SEFA originally issued was incomplete and understated total federal expenditures by $867,515. As a result, the fiscal year 2024 financial statements were reissued to include the omitted federal expenditures and to present an accurate SEFA in accordance with the Uniform Guidance. Questioned Costs None. Recommendation Management should strengthen year-end grant reconciliation and review procedures to ensure that all federal expenditures are properly recorded and included in the SEFA prior to issuance. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.
FINDING 2024-225 Amounts reported as provided to subrecipients by financial services on the Schedule of Expenditures of Federal Assistance (SEFA) are not properly supported. Type of Finding: Significant Deficiency, SEFA Misstatement Related to Prior Finding: 2023-208; 2022-211; 2021-206 AL Title: Special Supplemental Nutrition Program for Women, Infants, and Children, Temporary Assistance for Needy Families, Child Care and Development Block Grant, Child Care Mandatory and Matching Funds of the Child Care and Development Fund AL Number: 10.557, 93.558, 93.575, 93.596 Federal Award Number: Various Program Year: Various Federal Agency: Department of Health and Human Services Requirement: Code of Federal Regulations (CFR) 2 CFR 200.510(b) Questioned Costs: None Criteria: The U.S. Code of Federal Regulations (CFR), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) included in 2 CFR Section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. The Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) identifies control activities that help ensure management directives are carried out and risks are mitigated. These activities include approvals, authorizations, verifications, reconciliations, and segregation of duties. Management objectives should include the preparation and fair presentation of the SEFA in relation to the basic financial statements as a whole and in compliance with requirements contained in 2 CFR 200.510(b), which states, in part, it must include: • Total federal awards expended as determined in accordance with 2 CFR 200.502, and • Total amount provided to subrecipients from each federal program (2 CFR 200.510(b)(4)) The Office of the State Controller (Office) requires agencies to complete the SEFA closing package and uses the reported information to compile the statewide SEFA. Condition: Amounts reported on the SEFA closing package as expenditures to subrecipients did not agree to amounts provided by program staff to auditors for testing purposes. The following programs had discrepancies between what was reported on the SEFA closing package and what was retained by program personnel: • An overstatement of $4,503,700 for the Child Care and Development Block Grant (Assistance Listing Number (AL) 93.575) • An overstatement of $29,079 for the Child Care and Development Block Grant (AL 93.596) • An understatement of $1,014,475 for the Temporary Assistance for Needy Families (AL 93.558) • An understatement of $362,470 for the Special Supplemental Nutrition Program for Women, Infants, and Children (AL 10.557) Cause: Contradicting information was provided by financial services personnel and program personnel related to expenditures to subrecipients reported on the Schedule of Expenditures of Federal Awards (SEFA) closing package for three major programs. A new statewide accounting system (Luma) was implemented in July 2023. The Office provided guidance to the Department on how to code expenditures to subrecipients, using specific account codes. According to financial services personnel, some expenditures to subrecipients were incorrectly coded causing incorrect amounts to be included on the SEFA. The Department has a review process in place for closing packages that is intended to detect and correct errors. However, the review of the fiscal year 2024 SEFA closing package was not completed at a level of detail sufficient to properly identify and correct errors. In addition, Department financial services personnel and program personnel are not communicating effectively to discover and resolve any discrepancies related to expenditures to subrecipients reported on the SEFA. Effect: The amounts provided to subrecipients were misstated in the Department’s SEFA closing package as detailed in the condition section above. The net overstatement is a combination of over and under statements that total $3,155,834 in the Department’s SEFA closing package. Recommendation: We recommend that the Department improve the process of gathering information to prepare the SEFA closing package and review for accuracy at a level of detail sufficient to detect and correct errors in the SEFA closing package. In addition, we recommend that the Department improve training of program personnel regarding the proper coding of the expenditures to subrecipients. Management’s View: The Department Agrees with this finding. Corrective Action: For major grants, Financial Services staff will send a summary of transactions coded as subrecipient payments to the program manager to review prior to inclusion in the SEFA closing package. The review will be requested to be twofold: to ensure that everything that should be included as a subrecipient payment is and to ensure that nothing that should not be considered a subrecipient payment is included. This process helps to identify that we are reporting the accurate amount of expenditures for each subrecipient. Auditor’s Concluding Remarks: We thank the Department for its cooperation and assistance throughout the audit.
Finding 2024-004 – Material Weakness Award No.: Various Federal Grantor: Various Compliance Requirement: Other compliance requirements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was not complete, and expenditures reported on the SEFA were revised during the single audit. Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.502 states, “The auditee should prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee’s financial statements.” Internal controls over the SEFA should be in place to ensure accrual basis expenses incurred under the federal program are properly reported as expenses on the SEFA and are properly reported as revenue in the financial statements prior to the start of the single audit. Cause: The SEFA was not fully reconciled and finalized until after the single audit began. Effect: The expenses included on the SEFA were revised during the single audit, which could have resulted in the auditor not selecting the correct major program or expenses for testing and could have resulted in the single audit not satisfying the requirements of the Uniform Guidance. Recommendation: We recommend additional review procedures be implemented to ensure the SEFA is complete and accurate when the single audit begins and that the schedule is reconciled to the revenue recorded in the general ledger. Views of Responsible Officials and Planned Corrective Action: We agree with the finding and the Town is implementing a comprehensive corrective action plan focused on stabilizing Finance staffing, improving processes, and strengthening internal controls to ensure the Town can prepare accurate financial statements and the SEFA in a timely manner and meet all federal reporting deadlines going forward.
Reference Number: 2024-024 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Refugee and Entrant Assistance State Administered Programs Assistance Listing Number: 93.566 Award Number and Year: 2201MDRSSS (10/1/2021 – 9/30/2024) 2301MDRSSS (10/1/2022 – 9/30/2026) 2301MDRCMA (10/1/2022 – 9/30/2024) 2401MDRCMA (10/1/2023 – 9/30/2025) Compliance Requirement: SEFA Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F, §200.510(b) requires that auditees 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 §200.502. Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: A material error was made by the Department of Human Services (Department) in the amount reported for the program on the Schedule of Expenditures of Federal Awards (SEFA). Context: The Department made a late adjustment to their SEFA reporting for the program which reduced total expenditures by $3.77 million, or approximately 10%. Cause: The General Accounting Department consulted with Department to “reasonably” determine the current year federal program expenditures. However, the Department incorrectly accounted for and reported the federal program expenditures as part of their closing reporting package and subsequently reduced expenditures by approximately 10%. Effect: The SEFA was not prepared in accordance with OMB requirements which could impact the major program risk assessment. Questioned costs: None noted. Recommendation: We recommend that the Department review and enhance its reporting procedures and internal controls to ensure that expenditures reported on the SEFA are accurate. Views of responsible officials: Management agrees with the finding.
2024-001 SEFA REPORTING Federal Program Information: Federal Agency and Program Name U.S. Department of Health and Human Services Every Student Succeeds Act/Preschool Development Grants Grant Award G240352 Federal Assistance Listing Number 93.434 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.510(b) states that “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 2 CFR 200.502.” Condition: The Organization’s internal controls are not adequate to ensure that the schedule of expenditures of Federal awards (SEFA) accurately reports Federal assistance. The Organization did not identify its expenditures under Assistance Listing 93.434 in fiscal year 2024. Questioned Costs: $0 Context: Total federal expenditures for Assistance Listing 93.434 were $2,860,000 for the year ended June 30, 2024. Cause: The Organization does not have adequate internal controls in place to ensure the accuracy of the SEFA. Effect: The Organization is not reporting accurate financial information in its SEFA. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization implement additional controls over financial reporting, including the SEFA, to ensure accuracy of financial data. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
Finding 2024-001: Preparation of the Schedule of Expenditures of Federal Awards Material weakness/other matter noncompliance Federal Agency: U.S. Department of Homeland Security Program Name: Transit Security Grant Programs ALN Number: 97.075 Award Number: 97.075 Award Year: 2024 Criteria: The Uniform Guidance (2 CFR 200.510b) requires that the auditee (typically a non-federal entity receiving federal funds) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by its financial statements which must include the total Federal Awards expended as determined in accordance with 2 CFR 200.502. Condition: The SEFA for the year ended June 30, 2024 excluded $2,385,715 in expenditures incurred from the total expenditures reported for the federal awards for ALN 97.075 Rail and Transit Security Grant Program. Cause: The existing internal control procedures for processing funding source reclassifications are not structured to fully support the SEFA reporting cutoff deadline. While a process is in place, it does not fully incorporate all necessary stakeholders early enough in the cycle to ensure timely communication, coordinated review, and approval of reclassifications leading to eligible expenditures being omitted. Effect: Not in compliance with the Uniform Guidance (2 CFR 200.510b). There could be impacts on future funding. Context: As a result of the omission of eligible expenditures, total federal awards for ALN 97.075, Rail and Transit Security Grant Program, were understated by $2,385,715 due to the exclusion of expenditures. This understatement caused the major program determination to be improperly calculated and resulted in a missed major program. Question Costs: None Repeat Finding: No Recommendation: We recommend that the Organization review the schedule of expenditures of federal awards prior to issuance. Views of responsible officials and planned corrective actions: Management agrees with the finding and acknowledges that internal control procedures should be strengthened to ensure adherence to the SEFA reporting cutoff deadline. To address this issue, Management will implement a verification checklist as required supporting documentation for all funding source reclassification journal entries and vouchers, ensuring that all relevant departments have reviewed and approved the entries prior to being posted. The Authority will also establish a cutoff date for Program Offices to submit current year reclassification requests, allowing adequate time for eligibility review and fiscal yearend reporting. In addition, Accounting Policies and Procedures Manual will be updated to include guidelines limiting reclassifications of expenditures incurred in prior fiscal years. The Authority will communicate policy updates incorporate these changes to ensure consistent application across departments.
Assistance Listing, Federal Agency, and Program Name ALN 21.027, Department of the Treasury, COVID 19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year SLFRP 0127 2024 Pass through Entity EHDMMWJY1735 Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Per 2 CFR 200.510, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Per 2 CFR 200.502(a)(1), expenditure/expense transactions associated with grants, cooperative agreements, cost reimbursement contracts under the FAR, compacts with Indian Tribes, and direct appropriations are included. Condition The City did not report certain federal expenditures on the Schedule of Expenditures of Federal Awards (SEFA). Questioned Costs None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported Not applicable Identification of How Questioned Costs Were Computed Not applicable Context The City is utilizing several sources of funding to improve their utility systems. The amount expended was not orginally classified as a federal expenditure for the year ended June 30, 2024, and therefore was not included on the SEFA. However, it should have been reported as an expenditure of ARPA funds. Cause and Effect The City did not have a control to place to properly identifiy expenditures of federal awards on the SEFA. As a result, the orginal expenditures for APRA were understated by $1,180,649. Recommendation We recommend that the City review award agreements and track expenditures associated with awards for proper inclusion on SEFA. Views of Responsible Officials and Planned Corrective Actions The City will ensure that all future expenditures are tracked and reported to the proper periods and recorded appropriately.
Finding Reference: 2024-004 – Other finding – SEFA Preparation Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award Periods: July 1, 2023 – December 31, 2026 Description: Preparation of Schedule of Expenditures of Federal Awards Criteria The Uniform Guidance 2 CFR section 200.303 states, “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Uniform Guidance 2 CFR section 200.510 states, “(b) Schedule of expenditures of Federal awards. The auditee must also prepare 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 §200.502 Basis for determining Federal awards expended.” Condition The Corporation did not have appropriately designed internal controls in place to determine the correct amount of federal expenditures to be included on the Schedule. The Corporation omitted the expenditures related to the Assistance Listing Number 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds as well as expenditures related to seven other assistance listing numbers. Cause The Corporation did not design internal controls to completely and accurately report expenditures within the Schedule. Effect or potential effect The Schedule prepared by the Corporation was misstated but was subsequently corrected. A misstated Schedule could result in the improper selection of federal award major programs or an incorrect percentage of coverage being calculated resulting in a restatement of a previously issued Uniform Guidance report. Questioned costs None. Identification of a repeat finding This is a repeat finding of Finding 2023-002. Context Expenditures for Assistance Listing 21.027 of approximately $339,000 were excluded from the Schedule. In addition, expenditures totaling approximately $261,000 for seven other assistance listing numbers were also excluded from the Schedule. Recommendation The Corporation should update its policies and procedures and internal controls to ensure accurate reporting of the Schedule as required by the Uniform Guidance. View of responsible officials There is no disagreement with the audit finding.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Temporary Assistance for Needy Families, Child Care and Development Fund (CCDF) Cluster ALN and Program Expenditures: 93.558 ($583,126,272), 93.575/93.596 ($747,612,292) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: Cannot be determined Compliance Requirement: Activities Allowed/Unallowed, Allowable Costs/Cost Principles Finding 2024-006: Inadequate Process for Monitoring Interagency Program Expenditures Condition Found: IDHS does not have an adequate process for monitoring interagency expenditures claimed under or used to meet maintenance of effort (MOE) requirements of the Temporary Assistance for Needy Families (TANF) and CCDF Cluster (CCDF) programs. Federal and State expenditures under the TANF and CCDF Cluster programs are comprised of programs operated by various State agencies. As the State agency responsible for administering these programs, IDHS has executed interagency agreements with each of the State agencies expending federal and/or State program funds. The interagency agreements require periodic reporting of a summary of the agency’s “allowable” expenditures to IDHS for preparation of the financial reports required for each program. As the State agencies expending program funds do not determine under which program IDHS reports their expenditures, IDHS is responsible for establishing procedures to ensure the expenditures reported by the expending State agencies meet the specific requirements applicable to the federal program. During the year ended June 30, 2024, IDHS reported expenditures from other agencies that were claimed for reimbursement or used to meet MOE requirements as follows: "See Table in the Audit Report" IDHS’ procedures to monitor other State agencies expending program funds reported by IDHS include the following: • Interagency agreements were reviewed and updated (where necessary) to include all State programs claimed under or used to meet MOE requirements of the TANF and CCDF Cluster programs in its interagency agreement. • Program questionnaires were updated where necessary and distributed to each of the State agencies to assist in documenting the nature of the expenditures provided to IDHS and the internal controls established to ensure compliance with the applicable federal regulations. • Quarterly certification reports were collected from each of the State agencies to support amounts reported in the federal reports required for each federal program. • Expenditure details were obtained from each of the State agencies and were reconciled to the quarterly certifications. However, during our test work over the documentation of the monitoring procedures discussed above, we noted the following deficiencies: • Program questionnaires describing internal control procedures for the CCDF program were not obtained by IDHS from the Illinois Student Assistance Commission, Illinois Board of Higher Education, and Illinois Community College Board. Rather, a more limited questionnaire was obtained in the State's Grant Accountability and Transparency Act (GATA) Audit Report Review Management System (ARRMS) which is used to complete risk assessments procedures for the State’s subrecipients. • Quarterly certification reports were not prepared during the period for the CCDF program by the Illinois Student Assistance Commission, Illinois Board of Higher Education, and Illinois Community College Board. IDHS did not perform a detailed review of costs claimed from expenditures reported by any of the other State agencies to ensure they met the specific program requirements. The other State agencies do not necessarily know which federal program or maintenance of effort requirement the costs they are providing to IDHS will be claimed or used and are not able to assess whether the costs are allowable. Further, IDHS did not assess whether the expenditures reported by other State agencies were paid during State fiscal year 2024 to ensure the amounts reported to the Illinois Office of Comptroller (IOC) and used to prepare the schedule of expenditures of federal awards (SEFA) were cash basis expenditures. • During our detailed testing over CCDF funds expended by the Illinois Student Assistance Commission and Illinois Community College Board, we noted the amounts passed through to ISAC that were initially reported on the final expenditure questionnaire received for audit did not reconcile to the amount of expenditures on a cash basis for SEFA reporting. Further, we noted the amounts were reported as subrecipient expenditures, however, ultimately were reclassified as beneficiary payments, resulting in a SEFA error. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statement which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated the current monitoring process was not adequate to ensure interagency expenditures and MOE of federal monies from other State agencies met applicable program regulations as they relate to TANF and CCDF. Possible Asserted Effect: Failure to properly monitor interagency expenditures may result in claiming of expenditures that are inconsistent with the objectives of the federal program and federal funds being expended for unallowable purposes. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2023-017. (Finding Code 2024-006, 2023-017) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS review its current process for identifying and reporting interagency expenditures and implement monitoring procedures to ensure that federal and state expenditures expended by other State agencies meet the applicable program regulations. Views of IDHS Officials: IDHS accepts the recommendation. IDHS will establish additional controls to ensure expenditures related to federal grants (including those made by other agencies and those made to subrecipients) are accurately reported. IDHS will implement additional monitoring procedures over interagency expenditures to include sampling and review of supporting documentation to ensure the expenditures meet federal program requirements.
State Agency: Illinois Department of Human Services (IDHS) Federal Agency: U.S. Department of Agriculture (USDA), U.S. Department of Health and Human Services (USDHHS) Program Name: Supplemental Nutrition Assistance Program Cluster, Special Supplemental Nutrition Program for Women, Infants, and Children, Food Distribution Cluster, Rehabilitation Services – Vocational Rehabilitation, Temporary Assistance for Needy Families Child Care and Development Fund (CCDF) Cluster, Social Services Block Grant, Block Grants for Prevention and Treatment of Substance Abuse, Disability Insurance/SSI Cluster ALN and Program Expenditures: 10.551/10.561 ($4,687,993,367), 10.557 ($181,526,312), 10.565/10.568/10.569 ($67,875,839), 84.126A ($138,992,957), 93.558 ($583,126,272), 93.575/93.596 ($747,612,292), 93.667 ($55,634,435), 93.959 ($114,897,412), 96.001/96.006 ($75,260,007) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: None Finding 2024-014: Inaccurate Reporting of Federal Expenditures Condition Found: IDHS did not accurately report Federal expenditures, including amounts provided to subrecipients, under the Supplemental Nutrition Assistance (SNAP) Cluster, Supplemental Nutrition for Women, Infants, and Children (WIC) programs, Food Distribution Cluster (FDC), Vocational Rehabilitation (VR), Temporary Assistance for Needy Families (TANF), Child Care Development Funds (CCDF) Cluster, Social Services Block Grants (SSBG), Block Grants for Prevention and Treatment of Substance Abuse (SAPT), and Disability Insurance/SSI (SSDI) Cluster.Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDHS’ financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by IDHS and the SEFA amounts reported to the IOC for each program for the year ended June 30, 2024: "See Table in the Audit Report" The following differences were also identified relative to amounts provided to subrecipients for the following major programs: "See Table in the Audit Report" Additionally, we noted the cash basis expenditures provided by IDHS for our audit procedures included accrued (not paid) expenditures. We also noted these same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted expenditures that were not paid as of June 30, 2024, were erroneously reported as cash basis expenditures for the year ended June 30, 2024: "See Table in the Audit Report" We also noted the interagency expenditures provided by IDHS for our audit procedures included out of period expenditures. These same amounts were reported to the IOC and were used to prepare the SEFA. Specifically, we noted TANF Emergency Assistance (EA) payments which were claimed in fiscal year 2024 but reported in fiscal year 2023 totaling $14,275,633, and we noted EA payments which were claimed in fiscal year 2025 but were reported in fiscal year 2024 totaling $14,742,262. The net impact is an overstatement of TANF expenditures of $466,629 for the year ended June 30, 2024. Finally, we noted IDHS’ controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statement which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with IDHS officials, management stated that the differences in the amounts of federal expenditures in IDHS’ records compared to the IDHS SEFA were due to inclusion of accrued expenditures in IDHS’ records and some slight differences related to vouchers in transit at the end of the fiscal year. Differences in the amounts passed through to subrecipients were also related to vouchers in transit at the end of the fiscal year, and IDHS’ records for one federal grant program did not initially include non-cash expenditures which had been included on the IDHS SEFA. Possible Asserted Effect: Failure to accurately report federal expenditures hinders the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal fund Repeat Finding: A similar finding was reported in the prior year audit as finding number 2023-012. (Finding Code 2024-014, 2023-012, 2022-010) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDHS establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of IDHS Officials: The Department accepts the recommendation. IDHS will establish additional procedures to ensure federal expenditures (including subrecipient expenditures) are accurately reported.
State Agency: Illinois Student Assistance Commission (ISAC) Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: Child Care and Development Fund (CCDF) Cluster ALN and Program Expenditures: 93.575/93.596 ($747,612,292) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: None Finding 2024-028: Inaccurate Reporting of Federal Expenditures Condition Found: ISAC did not accurately report Federal expenditures, including amounts passed-through to subrecipients, under the CCDF Cluster. Federal expenditures, including amounts provided to subrecipients, reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA), did not agree to ISAC’s financial records provided for audit. Specifically, we noted the following differences between amounts provided for audit by ISAC and the amounts passed through to subrecipients of the CCDF Cluster program reported to the IOC for the SEFA for the year ended June 30, 2024: "See Table in the Audit Report" Finally, we noted ISAC’s controls over reporting federal expenditures, including amounts passed-through to subrecipients, were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Among other things required by 2 CFR 200.510(b), the SEFA must include the total amount provided to subrecipients from each Federal program.Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures, including amounts passed-through to subrecipients, are accurately reported on the SEFA and to other State agencies, where applicable. Cause: In discussing these conditions with ISAC management, they stated they presented these beneficiary payments as amounts passed through to subrecipients in accordance with guidance provided by parties responsible for the State’s financial reporting process. Possible Asserted Effect: Failure to accurately report federal expenditures impedes the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was not reported in the prior year audit. (Finding Code 2024-028) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend ISAC establish procedures to accurately report federal expenditures (including subrecipient expenditures) used to prepare the SEFA to the IOC. Views of ISAC Officials: ISAC accepts the finding. During the year ended June 30, 2024, payments totaling $79,103,694 were made to educational institutions for the direct benefit of eligible beneficiaries, as reflected in ISAC’s internal accounting records for the same fiscal year. ISAC believes federal expenditures were appropriately made to beneficiaries who were determined to have qualified under the program and that the amount of the total expenditures was correct. The classification of these amounts on the SEFA for the year ended June 30, 2024, was done using the same methodology applied in the prior fiscal year based on reporting guidance received for that fiscal year. ISAC maintained the established reporting framework, in preparing the SEFA for the fiscal year ended June 30, 2024. ISAC agrees that the amounts should not have been reported as payments to subrecipients on the SEFA for the fiscal year ended June 30, 2024. ISAC continues to maintain adequate internal controls designed to ensure federal expenditures are accurately recorded in its accounting records and are properly presented in accordance with the applicable guidance within 2 CFR 200.
State Agency: Illinois Department of Employment Security (IDES) Federal Agency: U.S. Department of Labor (USDOL) Program Name: Unemployment Insurance Program ALN and Program Expenditures: 17.225 ($2,329,354,603) Award Numbers: Various – see table of award numbers Federal Award Year: Various – see table of award numbers Questioned Costs: None Compliance Requirement: None Finding 2024-033: Inaccurate Reporting of Federal Expenditures Condition Found: IDES did not accurately report Federal expenditures under the Unemployment Insurance (UI) program. Federal expenditures reported to the Illinois Office of Comptroller (IOC) which were used to prepare the schedule of expenditure of federal awards (SEFA) did not agree to IDES’s financial records provided for audit. Specifically, we noted the following difference between amounts provided for audit by IDES and the SEFA amounts reported to the IOC for the Unemployment Insurance program for the year ended June 30, 2024: "See Table in the Audit Report" Finally, we noted IDES’s controls over reporting federal expenditures were not designed at a sufficient level of precision to ensure complete and accurate reporting in a timely manner. Criteria or Requirement: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the SEFA. Cause: In discussing these conditions with IDES officials, they stated the cause of the difference was the result of a large audit adjustment related to return of debit cards from a third party bank who sopped serving the program in December 2021. Possible Asserted Effect: Failure to accurately report federal expenditures inhibits the completion of an audit in accordance with the Uniform Guidance which may result in the suspension of federal funding. Repeat Finding: A similar finding was reported in prior year audit as finding number 2023-042. (Finding Code 2024-033, 2023-042) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDES establish procedures to accurately report federal expenditure used to prepare the SEFA to the IOC. Views of IDES Officials: The Agency accepts the recommendation and will adjust for returned debit cards in accordance with the final resolution determined in consultation with the Comptroller and financial statement auditors for State fiscal year 2024 if this situation should arise again.
US Department of the Treasury Passed through Missouri Department of Higher Education and Workforce Development Program Name: Coronavirus State and Local Fiscal Recovery Fund / American Rescue Plan Act / MoExcels Grant Assistance Listing #: 21.027 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the College initially failed to include $768,053 of Coronavirus State and Local Fiscal Recovery Fund (ARPA) funding received from the State of Missouri on the Schedule of Expenditures of Federal Awards. Additionally, the College incorrectly included $78,539 of 2024-25 SEOG funding that was drawn but not expended in the 2023-24 SEFA, resulting in an overstatement of SEOG expenditures. These errors were identified subsequent to the issuance of the report and require a re-issuance of the related audit reports. The internal control system did not prevent or detect these errors during the SEFA preparation process. Cause: The College's procedures for identifying and reporting federal expenditures were insufficient. The MoExcels grant application was submitted outside of the finance office without early communication to finance personnel regarding the federal funding source. Since the College rarely receives federal funding beyond routine Student Financial Aid programs, finance personnel were initially unaware that the MoExcels funding originated from a federal source and therefore required inclusion on the SEFA. Additionally, the College lacked adequate cutoff procedures to ensure federal expenditures were reported in the correct period based on when costs were incurred rather than when funds were drawn down from federal systems. The absence of formal communication protocols between program staff and the finance staff who prepared the SEFA, combined with insufficient review procedures for year-end federal drawdown cutoff, contributed to these oversights. Effect: The initial errors resulted in an understatement of federal expenditures on the originally issued SEFA by $768,053 for ARPA funds and an overstatement by $78,539 for SEOG funds, for a net understatement of $689,514. While these errors have been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the College implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all grant agreements to identify federal funding sources; (2) establishing regular communication between program and finance departments to identify all federal awards received; (3) maintaining a master listing of all grants that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (4) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are drawn down from federal systems; and (5) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against grant documentation and proper period reporting. We note that the College's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the College's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The College has implemented immediate corrective actions including development of a comprehensive grant tracking spreadsheet and establishment of regular meetings between program and finance staff. Additionally, effective immediately, all grant applications must be reviewed and approved by the Controller prior to submission to ensure proper identification of funding sources and compliance requirements. The College will also implement cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred. The Controller will review all G5 drawdowns near year-end to verify proper period reporting. Formal written procedures for SEFA preparation will be implemented by October 15, 2025. The Controller will maintain the master grant listing and review all grant agreements to determine federal funding sources. Beginning with fiscal year 2026 SEFA preparation, the CFO will perform an independent review for completeness and accuracy, including verification of proper period reporting for all federal expenditures.
US Department of the Treasury Passed through Missouri Department of Higher Education and Workforce Development Program Name: Coronavirus State and Local Fiscal Recovery Fund / American Rescue Plan Act / MoExcels Grant Assistance Listing #: 21.027 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the College initially failed to include $768,053 of Coronavirus State and Local Fiscal Recovery Fund (ARPA) funding received from the State of Missouri on the Schedule of Expenditures of Federal Awards. Additionally, the College incorrectly included $78,539 of 2024-25 SEOG funding that was drawn but not expended in the 2023-24 SEFA, resulting in an overstatement of SEOG expenditures. These errors were identified subsequent to the issuance of the report and require a re-issuance of the related audit reports. The internal control system did not prevent or detect these errors during the SEFA preparation process. Cause: The College's procedures for identifying and reporting federal expenditures were insufficient. The MoExcels grant application was submitted outside of the finance office without early communication to finance personnel regarding the federal funding source. Since the College rarely receives federal funding beyond routine Student Financial Aid programs, finance personnel were initially unaware that the MoExcels funding originated from a federal source and therefore required inclusion on the SEFA. Additionally, the College lacked adequate cutoff procedures to ensure federal expenditures were reported in the correct period based on when costs were incurred rather than when funds were drawn down from federal systems. The absence of formal communication protocols between program staff and the finance staff who prepared the SEFA, combined with insufficient review procedures for year-end federal drawdown cutoff, contributed to these oversights. Effect: The initial errors resulted in an understatement of federal expenditures on the originally issued SEFA by $768,053 for ARPA funds and an overstatement by $78,539 for SEOG funds, for a net understatement of $689,514. While these errors have been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the College implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all grant agreements to identify federal funding sources; (2) establishing regular communication between program and finance departments to identify all federal awards received; (3) maintaining a master listing of all grants that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (4) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are drawn down from federal systems; and (5) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against grant documentation and proper period reporting. We note that the College's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the College's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The College has implemented immediate corrective actions including development of a comprehensive grant tracking spreadsheet and establishment of regular meetings between program and finance staff. Additionally, effective immediately, all grant applications must be reviewed and approved by the Controller prior to submission to ensure proper identification of funding sources and compliance requirements. The College will also implement cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred. The Controller will review all G5 drawdowns near year-end to verify proper period reporting. Formal written procedures for SEFA preparation will be implemented by October 15, 2025. The Controller will maintain the master grant listing and review all grant agreements to determine federal funding sources. Beginning with fiscal year 2026 SEFA preparation, the CFO will perform an independent review for completeness and accuracy, including verification of proper period reporting for all federal expenditures.
III – Findings and questioned costs for Federal awards US Department of the Treasury Passed through Missouri Department of Higher Education and Workforce Development Program Name: Coronavirus State and Local Fiscal Recovery Fund / American Rescue Plan Act / MoExcels Grant Assistance Listing #: 21.027 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the College initially failed to include $768,053 of Coronavirus State and Local Fiscal Recovery Fund (ARPA) funding received from the State of Missouri on the Schedule of Expenditures of Federal Awards. Additionally, the College incorrectly included $78,539 of 2024-25 SEOG funding that was drawn but not expended in the 2023-24 SEFA, resulting in an overstatement of SEOG expenditures. These errors were identified subsequent to the issuance of the report and require a re-issuance of the related audit reports. The internal control system did not prevent or detect these errors during the SEFA preparation process. Cause: The College's procedures for identifying and reporting federal expenditures were insufficient. The MoExcels grant application was submitted outside of the finance office without early communication to finance personnel regarding the federal funding source. Since the College rarely receives federal funding beyond routine Student Financial Aid programs, finance personnel were initially unaware that the MoExcels funding originated from a federal source and therefore required inclusion on the SEFA. Additionally, the College lacked adequate cutoff procedures to ensure federal expenditures were reported in the correct period based on when costs were incurred rather than when funds were drawn down from federal systems. The absence of formal communication protocols between program staff and the finance staff who prepared the SEFA, combined with insufficient review procedures for year-end federal drawdown cutoff, contributed to these oversights. Effect: The initial errors resulted in an understatement of federal expenditures on the originally issued SEFA by $768,053 for ARPA funds and an overstatement by $78,539 for SEOG funds, for a net understatement of $689,514. While these errors have been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the College implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all grant agreements to identify federal funding sources; (2) establishing regular communication between program and finance departments to identify all federal awards received; (3) maintaining a master listing of all grants that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (4) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are drawn down from federal systems; and (5) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against grant documentation and proper period reporting. We note that the College's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the College's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The College has implemented immediate corrective actions including development of a comprehensive grant tracking spreadsheet and establishment of regular meetings between program and finance staff. Additionally, effective immediately, all grant applications must be reviewed and approved by the Controller prior to submission to ensure proper identification of funding sources and compliance requirements. The College will also implement cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred. The Controller will review all G5 drawdowns near year-end to verify proper period reporting. Formal written procedures for SEFA preparation will be implemented by October 15, 2025. The Controller will maintain the master grant listing and review all grant agreements to determine federal funding sources. Beginning with fiscal year 2026 SEFA preparation, the CFO will perform an independent review for completeness and accuracy, including verification of proper period reporting for all federal expenditures.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federa expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: Yes Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management agrees with the auditor's finding and has developed a corrective action plan. See last pages of this report.
Finding 2024-001--Reporting of the Schedule of Expenditure of Federal Awards Federal Agency: U.S. Department of Health and Human Services Federal Program: ALN 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) – Passed through Health Research, Inc. Grant Period: Year ended April 30, 2024 Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Condition: The Organization’s internal controls did not identify amounts expended under the ELC program as federal expenditures. The related grant was inadvertently identified as a state grant and was initially excluded from the schedule of expenditures of federal awards (SEFA). As a result, the Organization should have reported ELC expenditures totaling $1,167,015 on the SEFA for the year ended April 30, 2024. Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the recipient’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. In addition, 2 CFR 200.303 requires non-Federal entities receiving federal awards to establish and maintain internal controls designated to reasonably ensure compliance with federal laws, regulations and program compliance. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Cause: The grant was originally coded as a state grant was overlooked when management prepared the SEFA. Effect: The SEFA was understated by $1,167,015. In addition, the inaccurate preparation of the SEFA may prevent the Organization from completing an audit in accordance with the timelines established in the Uniform Guidance. Questioned Costs: Not applicable Statistical Sampling: Not appliable Repeat Finding: No Recommendation: We recommend that the Organization implement additional processes and procedures to ensure that the SEFA is complete and accurate. Views of Responsible Officials: We agree with the finding noted above. Although the grant income was federally sourced, our contract was with a state department and was classified as such in our books and records. As soon as the error was realized, we notified the auditors so the necessary corrections could be made. This incident is isolated and not recurring. The grant for which this finding is associated was a temporary grant that has since ended. To prevent future errors from occurring, all new contracts will be reviewed prior to submitting the summary of federal awards to the auditor to ensure that any federally sourced funding is properly identified regardless of grantor. CARES of NY, Inc. will implement a check and balance procedure where the grants director will review the listing prior to audit submission for accuracy.
Criteria or Specific Requirement: Under 2 CFR Part 200.502, the auditee must prepare the Schedule of Federal Awards to cover the appropriate audit period and to include all applicable federal expenditures expended during the audit period. Condition: The City has not historically created or provided a Schedule of Federal Awards for audit purposes and did not include all federa expenditures as required under 2 CFR Part 200.502. Context: The City did not have all federal expenditures recorded in their trial balance, and did not have accurate records of all expenditures spent during the audit period. In addition, they did not have all of the necessary information or training to create the Schedule of Federal Awards. Questioned Costs: None Effect: The City was unable to provide auditors with a complete Schedule of Federal Awards, and could not verify the completeness of expenditures recorded in their financial statements as provided for the audit. Cause: The City does not have processes in place to track all grant spending. Repeat: Yes Auditor's Recommendation: We recommend that the City create processes and procedures that capture all federal funding received, and track applicable expenditures. This report should be reconciled regularly (at least monthly) when requests for reimbursement are made, and should include all applicable information necessary to identify the funding agency, assistance listing number, and any other pertinent passthrough information. With this process in place, the City will be better able to track and monitor grant funding, plan future projects or future funding needs, and prepare for the annual audit. View of Responsible Officials: Management agrees with the auditor's finding and has developed a corrective action plan. See last pages of this report.
Finding 2024-001--Reporting of the Schedule of Expenditure of Federal Awards Federal Agency: U.S. Department of Health and Human Services Federal Program: ALN 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) – Passed through Health Research, Inc. Grant Period: Year ended April 30, 2024 Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Condition: The Organization’s internal controls did not identify amounts expended under the ELC program as federal expenditures. The related grant was inadvertently identified as a state grant and was initially excluded from the schedule of expenditures of federal awards (SEFA). As a result, the Organization should have reported ELC expenditures totaling $1,167,015 on the SEFA for the year ended April 30, 2024. Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the recipient’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. In addition, 2 CFR 200.303 requires non-Federal entities receiving federal awards to establish and maintain internal controls designated to reasonably ensure compliance with federal laws, regulations and program compliance. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Cause: The grant was originally coded as a state grant was overlooked when management prepared the SEFA. Effect: The SEFA was understated by $1,167,015. In addition, the inaccurate preparation of the SEFA may prevent the Organization from completing an audit in accordance with the timelines established in the Uniform Guidance. Questioned Costs: Not applicable Statistical Sampling: Not appliable Repeat Finding: No Recommendation: We recommend that the Organization implement additional processes and procedures to ensure that the SEFA is complete and accurate. Views of Responsible Officials: We agree with the finding noted above. Although the grant income was federally sourced, our contract was with a state department and was classified as such in our books and records. As soon as the error was realized, we notified the auditors so the necessary corrections could be made. This incident is isolated and not recurring. The grant for which this finding is associated was a temporary grant that has since ended. To prevent future errors from occurring, all new contracts will be reviewed prior to submitting the summary of federal awards to the auditor to ensure that any federally sourced funding is properly identified regardless of grantor. CARES of NY, Inc. will implement a check and balance procedure where the grants director will review the listing prior to audit submission for accuracy.
Federal Agency: United States Department of the Treasury Federal Program: COVID-19 – State Small Business Credit Initiative Technical Assistance Grant Program (21.031) Federal Award Number: SSBCI-21031-0037 Federal Award Year: 2024 State Agency: Department of Economic Development and Office of the State Comptroller Reference: 2024-002 Criteria Reporting In accordance with Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 200.510(b), 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 section 200.502. For reporting purposes, State Small Business Credit Initiative (SSBCI) capital funds are not considered federal financial assistance. The SSBCI statute, 12 U.S.C. section 5702(c)(5), specifically states that capital funds transferred to jurisdictions are not considered federal financial assistance for the purposes of 31 U.S.C. subtitle V. Funds given to provide technical assistance, however, are considered federal financial assistance. Internal controls Lastly, 2 CFR 200.303(a) states the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Office of the State Comptroller (OSC) is responsible for the preparation of the schedule of expenditures of federal awards (SEFA). Annually, OSC provides the New York State agencies with a proposed SEFA with their respective expenditures by assistance listing number and each agency is charged with reviewing and providing adjustments and feedback. The proposed agency SEFA subschedule for State fiscal year 2024 provided to the Department of Economic Development (DED) did not include the expenditures for the SSBCI program. Upon DED review of the proposed agency SEFA subschedule, DED did not identify and report any expenditures for the SBBCI program that had been disbursed by DED. OSC utilized information in the Statewide Financial System (SFS) to populate the SEFA and which included expenditures totaling $154,792,221 for the SSBCI program. The amount was comprised of $151,191,199 related to capital funds and $3,601,022 of technical assistance funds. In accordance with 12 U.S.C. § 5702(c)(5), capital funds are not considered Federal financial assistance and therefore for reporting purposes should not be included on the SEFA. The preliminary SEFA including SBBCI expenditures of $154,792,221 was provided to the auditors and the SBBCI program was selected as a high-risk B program to be audited as a major program for State fiscal year 2024. Upon audit inquiry, it was determined that $151,191,199 related to capital funds and should not have been included on the SEFA. OSC appropriately adjusted the SEFA prior to finalizing the audit. DED did not properly review and report expenditures related to the SSBCI program on their SEFA subschedule. The communication between the Agencies was not sufficient to uncover the improper reporting on the SEFA. Cause DED did not properly review and report expenditures related to the SSBCI program to OSC. Possible Asserted Effect The effect was the incorrect reporting of federal expenditures, which necessitated adjustments on the SEFA during the audit process and highlighted potential compliance and oversight issues. Questioned Costs None Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation To address the identified issues and prevent future occurrences of improper reporting on the SEFA, we recommend that DED thoroughly review and report federal expenditures on their SEFA subschedule. We also recommend OSC review and enhance its guidelines provided to the Agencies to specifically highlight the Agencies responsibility to communicate to OSC any specific requirements of the programs, and the classification and reporting of different types of funds, such as capital funds and technical assistance funds, in accordance with relevant statutes and regulations. By implementing these recommendations, the State can enhance the accuracy and reliability of SEFA reporting, ensure compliance with federal regulations, and improve overall internal controls and communication between the Agencies.
Federal Agency: United States Department of the Treasury Federal Program: COVID-19 – State Small Business Credit Initiative Technical Assistance Grant Program (21.031) Federal Award Number: SSBCI-21031-0037 Federal Award Year: 2024 State Agency: Department of Economic Development and Office of the State Comptroller Reference: 2024-002 Criteria Reporting In accordance with Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 200.510(b), 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 section 200.502. For reporting purposes, State Small Business Credit Initiative (SSBCI) capital funds are not considered federal financial assistance. The SSBCI statute, 12 U.S.C. section 5702(c)(5), specifically states that capital funds transferred to jurisdictions are not considered federal financial assistance for the purposes of 31 U.S.C. subtitle V. Funds given to provide technical assistance, however, are considered federal financial assistance. Internal controls Lastly, 2 CFR 200.303(a) states the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Office of the State Comptroller (OSC) is responsible for the preparation of the schedule of expenditures of federal awards (SEFA). Annually, OSC provides the New York State agencies with a proposed SEFA with their respective expenditures by assistance listing number and each agency is charged with reviewing and providing adjustments and feedback. The proposed agency SEFA subschedule for State fiscal year 2024 provided to the Department of Economic Development (DED) did not include the expenditures for the SSBCI program. Upon DED review of the proposed agency SEFA subschedule, DED did not identify and report any expenditures for the SBBCI program that had been disbursed by DED. OSC utilized information in the Statewide Financial System (SFS) to populate the SEFA and which included expenditures totaling $154,792,221 for the SSBCI program. The amount was comprised of $151,191,199 related to capital funds and $3,601,022 of technical assistance funds. In accordance with 12 U.S.C. § 5702(c)(5), capital funds are not considered Federal financial assistance and therefore for reporting purposes should not be included on the SEFA. The preliminary SEFA including SBBCI expenditures of $154,792,221 was provided to the auditors and the SBBCI program was selected as a high-risk B program to be audited as a major program for State fiscal year 2024. Upon audit inquiry, it was determined that $151,191,199 related to capital funds and should not have been included on the SEFA. OSC appropriately adjusted the SEFA prior to finalizing the audit. DED did not properly review and report expenditures related to the SSBCI program on their SEFA subschedule. The communication between the Agencies was not sufficient to uncover the improper reporting on the SEFA. Cause DED did not properly review and report expenditures related to the SSBCI program to OSC. Possible Asserted Effect The effect was the incorrect reporting of federal expenditures, which necessitated adjustments on the SEFA during the audit process and highlighted potential compliance and oversight issues. Questioned Costs None Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation To address the identified issues and prevent future occurrences of improper reporting on the SEFA, we recommend that DED thoroughly review and report federal expenditures on their SEFA subschedule. We also recommend OSC review and enhance its guidelines provided to the Agencies to specifically highlight the Agencies responsibility to communicate to OSC any specific requirements of the programs, and the classification and reporting of different types of funds, such as capital funds and technical assistance funds, in accordance with relevant statutes and regulations. By implementing these recommendations, the State can enhance the accuracy and reliability of SEFA reporting, ensure compliance with federal regulations, and improve overall internal controls and communication between the Agencies.
2023-001 Internal Controls Over Compliance and Compliance with Reporting - Preparation of the Schedule of Expenditures of Federal Awards Information on the Major Federal Program - Federal Agency: Department of Health and Human Services Assistance Listing Number: 93.855 Assistance Listing Name: Research and Development Cluster Award Number: 1G20AI174721-01 Award Period: 09/16/2022 – 02/29/2024 Criteria: The Uniform Guidance in 2 CFR 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 2 CFR Section 200.502 Basis for determining Federal awards expended.” The Schedule must provide total Federal awards expended for each individual Federal program. Condition: Expenditures for a grant under the Department of Health and Human Services program of approximately $1.3 million were incurred in 2023, but improperly not included in the Schedule. These expenditures were incurred but not billed to the federal awarding agency at December 31, 2023. Cause: The internal controls established for the review and reconciliation of the Schedule to the underlying accounting records were not consistently followed to ensure accurate reporting of expenditures to the Schedule. Questioned Costs: None. Context: We reviewed the Schedule and found the exception as noted in the condition. Effect: Failure to properly review and support expenditures reported in the Schedule can result in inaccurate reporting and non-compliance with laws and regulations. Repeat Finding: This is not a repeat finding. Recommendation: Internal controls should be designed to prevent, detect and correct errors and/or omissions in a timely manner. Without adequate controls, the Organization cannot provide reasonable assurance that the Schedule is fairly presented. See management’s response for further details.
Identification of the federal programs 12.800 - Air Force Defense Research Sciences Program - FA8650-20-2-5506. Criteria or Specific Requirement Per 2 CFR Part 200 Subpart F section 200.502, amounts provided to subrecipients should be reported as expended when the disbursement is made to the subrecipient. Condition The Organization recorded disbursements made to subrecipients in the incorrect fiscal year period on the Schedule of Expenditures of Federal Awards. Cause The Organization recorded the expenses in accordance with GAAP rather than with the CFR compliance on the Schedule of Expenditures of Federal Awards. As such the Organization incorrectly incurred expenses in the wrong fiscal year period for the purposes of the single audit. Effect or potential effect Subrecipient expenditures are recorded in the incorrect year. Questioned Costs None noted. Context The condition noted above was identified during the audit procedures related to Subrecipient Monitoring. Identification as a Repeat Finding None Recommendation The Organization should have a formal process put in place to ensure subrecipient expenditures are being recorded in the proper period. Views of Responsible Officials Management concurs with the finding. The Organization revised its review procedures and controls so that subrecipient expenditures are recorded in the proper accounting fiscal year according to 2 CFR Part 200 Subpart F section 200.502, whereby amounts will be reported as expended when the disbursement is made to the subrecipient for single audit purposes. These steps should correct the deficiency.
Finding 2023-001: Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards – Other U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction (Federal-Aid Highway Program) – ALN 20.205 U.S. DEPARTMENT OF TREASURY COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, “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, Basis for determining Federal awards expended. Condition: Prior to correction, certain federal expenditures were not properly identified on the schedule of expenditures of federal awards (SEFA). During our audit, it was determined total federal expenditures for the Highway Planning and Construction program were overstated by approximately $481,000 and federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds program were understated by approximately $340,000 on the SEFA. Cause: Internal controls were not in place to ensure program related revenues (which are used to prepare the federal expenditures for the SEFA) were properly recorded for the Highway Planning and Construction program and that calculations for the Coronavirus State and Local Fiscal Recovery Funds program were reviewed for accuracy. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not accurately reflect the total amount of federal dollars expended during a particular year. Context: The SEFA was originally overstated by $481,000 for the Highway Planning and Construction program due to reporting $377,000 of expenditures as federal instead of local, reporting $120,000 of remaining encumbrances as 2023 expenditures, and excluding $16,000 of expenditures incurred as a result of recording retainage on a project. The Coronavirus State and Local Fiscal Recovery Funds program expenditures were originally understated on the SEFA by $340,000 due to a formula error relating to the calculation of total federal expenditures for the program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend staff review procedures related to revenue recognition of its highway construction programs to ensure amounts are properly reported on the SEFA, and that federal expenditure calculations are reviewed for accuracy. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in the City of Bloomington’s Corrective Action Plan.
Finding 2023-001: Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards – Other U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction (Federal-Aid Highway Program) – ALN 20.205 U.S. DEPARTMENT OF TREASURY COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, “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, Basis for determining Federal awards expended. Condition: Prior to correction, certain federal expenditures were not properly identified on the schedule of expenditures of federal awards (SEFA). During our audit, it was determined total federal expenditures for the Highway Planning and Construction program were overstated by approximately $481,000 and federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds program were understated by approximately $340,000 on the SEFA. Cause: Internal controls were not in place to ensure program related revenues (which are used to prepare the federal expenditures for the SEFA) were properly recorded for the Highway Planning and Construction program and that calculations for the Coronavirus State and Local Fiscal Recovery Funds program were reviewed for accuracy. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not accurately reflect the total amount of federal dollars expended during a particular year. Context: The SEFA was originally overstated by $481,000 for the Highway Planning and Construction program due to reporting $377,000 of expenditures as federal instead of local, reporting $120,000 of remaining encumbrances as 2023 expenditures, and excluding $16,000 of expenditures incurred as a result of recording retainage on a project. The Coronavirus State and Local Fiscal Recovery Funds program expenditures were originally understated on the SEFA by $340,000 due to a formula error relating to the calculation of total federal expenditures for the program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend staff review procedures related to revenue recognition of its highway construction programs to ensure amounts are properly reported on the SEFA, and that federal expenditure calculations are reviewed for accuracy. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in the City of Bloomington’s Corrective Action Plan.
PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.