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 federal 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: No 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 concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
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 federal 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: No 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 concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
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 federal 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: No 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 concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
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 federal 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: No 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 concurs with the Auditor’s recommendation and will review with the third-party North Central Illinois Council of Governments (NCICG) to establish appropriate City monitoring and review. City will also review with prior City Auditors to ensure proper overall procedures are in place to ensure all grants in the aggregate are monitored.
Federal Agency: US Department of Housing and Urban Development Federal Program Title: Community Development Block Grants/Entitlement Grants ALN Number: 14.228 Award Periods: April 1, 2022 March 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance also reported as Other Noncompliance Criteria or specific requirement: 2 CFR Subpart D 200.302 (1) and 200.303 (a) stipulates that the auditee must identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal programs and award identification shall include, as applicable, the ALN title and number, Federal award identification number and year, name of Federal agency, and name of the pass-through entity; establish and maintain effective internal control over Federal award that provides reasonable assurance that the auditee is managing Federal awards in compliance with Federal statutes, regulation, 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 Controller General of the United States and the Internal Control Integrated Framework, issued by the Committee on Sponsoring Organizations of the Treadway Commission (COSO). In addition, 2 CFR 200.502(b) states that since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. Condition: The Authoritys schedule of expenditures of federal awards (SEFA) did not report loan balances on the SEFA as required by Uniform Guidance for federal program 14.228. Questioned costs: Not able to determine. Context: The Agency did not report loan balances on the SEFA. Cause: The Agency was not aware of the requirements to include loan balances on the SEFA. Effect: The SEFA omitted loan balances for federal program 14.228. Therefore, it was not in compliance with 2 CFR Subpart D 200.302 (1), 200.303 (a) and 200.502 (b). The Agencys program expenditures may be disallowed if the expenditures are not reported correctly on the SEFA. Recommendation: We recommend that the Agency review current procedures for creating the SEFA to ensure that it is accurately reporting loan balances and expenditures during the year under audit for all federal programs to ensure compliance with Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 66.458, Environmental Protection Agency. Capitalization Grants for Clean Water State Revolving Funds. Federal Award Identification Number and Year: 5749-01, Loan Period 06/18/2022-11/15/2024 Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy Finance Division - Water Infrastructure Financing Section Type: Material weakness in internal controls and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.510 (b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined with section 200.502. Condition: The Township did not identify that they were subject to an audit under the Uniform Guidance (U.G.) and a schedule of expenditures of federal awards (SEFA) was not prepared by management. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None Context: In fiscal year 2023, the Township had $1,072,983 in expenditures under three federal awards to report on the SEFA. The Capitalization Grants of Clean Water Revolving Funds was determined to have $980,228 in federal expenditures subject to audit under the U.G. Cause/Effect: The Township's controls were not adequate to ensure that they identify the requirement to have an audit under the Uniform Guidance and the preparation of an accurate and complete SEFA. As a result, management may fail to identify that an audit under the Uniform Guidance is required and that all federal dollars are included. Recommendation: We recommend the Township review federal, state, and local grants to determine if they are federally funded and, if federally funded, utilize the account number outlined in the State of Michigan chart of accounts to track federal funding. View of responsible officials and planned corrective action plan: See attached corrective action plan.
Federal Agency: US Department of Housing and Urban Development Federal Program Title: Community Development Block Grants/Entitlement Grants ALN Number: 14.228 Award Periods: April 1, 2022 March 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance also reported as Other Noncompliance Criteria or specific requirement: 2 CFR Subpart D 200.302 (1) and 200.303 (a) stipulates that the auditee must identify, in its accounts, all Federal awards received and expended and the Federal programs under which they were received. Federal programs and award identification shall include, as applicable, the ALN title and number, Federal award identification number and year, name of Federal agency, and name of the pass-through entity; establish and maintain effective internal control over Federal award that provides reasonable assurance that the auditee is managing Federal awards in compliance with Federal statutes, regulation, 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 Controller General of the United States and the Internal Control Integrated Framework, issued by the Committee on Sponsoring Organizations of the Treadway Commission (COSO). In addition, 2 CFR 200.502(b) states that since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of this section: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. Condition: The Authoritys schedule of expenditures of federal awards (SEFA) did not report loan balances on the SEFA as required by Uniform Guidance for federal program 14.228. Questioned costs: Not able to determine. Context: The Agency did not report loan balances on the SEFA. Cause: The Agency was not aware of the requirements to include loan balances on the SEFA. Effect: The SEFA omitted loan balances for federal program 14.228. Therefore, it was not in compliance with 2 CFR Subpart D 200.302 (1), 200.303 (a) and 200.502 (b). The Agencys program expenditures may be disallowed if the expenditures are not reported correctly on the SEFA. Recommendation: We recommend that the Agency review current procedures for creating the SEFA to ensure that it is accurately reporting loan balances and expenditures during the year under audit for all federal programs to ensure compliance with Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 66.458, Environmental Protection Agency. Capitalization Grants for Clean Water State Revolving Funds. Federal Award Identification Number and Year: 5749-01, Loan Period 06/18/2022-11/15/2024 Pass-through Entity: Michigan Department of Environment, Great Lakes, and Energy Finance Division - Water Infrastructure Financing Section Type: Material weakness in internal controls and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.510 (b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined with section 200.502. Condition: The Township did not identify that they were subject to an audit under the Uniform Guidance (U.G.) and a schedule of expenditures of federal awards (SEFA) was not prepared by management. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None Context: In fiscal year 2023, the Township had $1,072,983 in expenditures under three federal awards to report on the SEFA. The Capitalization Grants of Clean Water Revolving Funds was determined to have $980,228 in federal expenditures subject to audit under the U.G. Cause/Effect: The Township's controls were not adequate to ensure that they identify the requirement to have an audit under the Uniform Guidance and the preparation of an accurate and complete SEFA. As a result, management may fail to identify that an audit under the Uniform Guidance is required and that all federal dollars are included. Recommendation: We recommend the Township review federal, state, and local grants to determine if they are federally funded and, if federally funded, utilize the account number outlined in the State of Michigan chart of accounts to track federal funding. View of responsible officials and planned corrective action plan: See attached corrective action plan.
Finding 2023-003 – Significant Deficiency – Corrections needed to SEFA Award No.: 15.574 Federal Grantor: U.S. Department of the Interior, Bureau of Reclamation. 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: SEFA was not fully reconciled and finalized until after the single audit began. Effect: Expenses were omitted from the SEFA that should have been included. The SEFA had to be revised over the course of the audit. This delayed the audit testing and could have resulted in the auditor not selecting the correct expenses for testing and could have resulted in the single audit not satisfying the requirements of the Uniform Guidance. Context: The Authority recorded federal contributions on a cash basis method of accounting, which resulted in allowable federal expenditures being subsequently discovered in the amount of $835,371 that should have been accrued as revenue as of year ended February 28, 2022. Additionally, $1,256,145 of allowable federal expenditures were discovered in the year ending February 28, 2023 that were accrued as revenue during the audit. The full amount of $2,091,516 of prior year and current year allowable federal expenditures were tested during the February 28, 2023 single audit. Recommendation: We recommend additional review procedures be implemented to ensure the SEFA is complete and accurate when the single audit begins, which includes reconciling all expenses incurred under each federal award down to the invoice, payroll check and lowest level of other costs claimed, cutting-off each expense at year-end and claiming the reconciled qualifying expenses within 45 days after each quarter end. At year-end, programs should be reviewed for cost adjustments, extensions, and other changes that should be reflected on the SEFA when reconciling expenses for the SEFA. Separate program codes should be used for each grant on the SEFA that summarizes expenses down to the individual invoice level that should be provided to the auditor for the single audit. If overclaimed amounts are identified, the grantor and/or pass-though agency should be contacted to determine whether to return the funds or apply the overclaimed amounts to future claims. Views of Responsible Officials and Planned Corrective Actions: Management’s response and planned corrective action is included in the Corrective Action Plan included at the end of the report.
Finding 2022-001 Preparation of Schedule of Expenditures of Federal Awards Federal Agency and Pass-through Entity: U.S. Environmental Protection Agency – Georgia Environmental Finance Authority Program Title/Cluster: Clean Water State Revolving Fund Cluster (CWSRF) Criteria: The Schedule of Expenditures of Federal Awards is a supplemental schedule to the financial statements required to be produced when the entity is subject to a single audit. The single audit requirement is triggered when the federal expenditures reported on the Schedule of Expenditures of Federal Awards exceed $750,000 or more within an entity’s fiscal year. Uniform Guidance 2 CFR §200.510(b) states “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 §200.502.” Condition: For the year ended December 31, 2022, the City kept records of all expenditures and receipts of funding from drawdown requests together with support of payments and deposits of funds related to all federal expenditures but did not present those expenditures correctly or completely on a Schedule of Expenditure of Federal Awards that met minimum requirements as established by Uniform Guidance 2 CFR §200.510(b). Effect: An accurate representation of total federal expenditures for the fiscal year is required to clearly identify federal expenditures for the audit period. The absence of a complete and accurate Schedule of Expenditures of Federal Awards for the audit period is noncompliant with the requirements set forth under Uniform Guidance 2 CFR §200.510(b) but does not constitute a significant deficiency or material weakness in internal control over compliance. Questioned Costs: None reported. Recommendation: The City should implement a policy requiring entry of any federal expenditures to the Schedule of Expenditures of Federal Awards as part of the drawdown or pay request processes when submitting expenditures to the Federal Agency or Pass-through Entity providing funding. The procedures should be followed consistently to ensure that federal funds are appropriately accounted for and clearly identifiable for the period in which they occurred. The City of Hartwell should refer to the compliance requirements of Title 2 U.S. Code of Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, and ensure the City meets the minimum Schedule of Expenditures of Federal Awards requirements as described in 2 CFR §200.510(b).
Program Information: Temporary Assistance for Needy Families (ALN #93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting- The auditee must prepare a schedule of expenditures of Federal awards (the “SEFA”) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 Basis for determining Federal awards expended. At a minimum, the schedule must: (1) 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 Research and Development (“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. (2) For Federal awards received as a subrecipient, the name of the passthrough entity and identifying number assigned by the pass-through entity must be included. (3) 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. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in 2 CFR 200.502(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. (6) 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 2 CFR 200.414. Condition: The SEFA, as prepared by management, erroneously excluded certain pass-through federal funds from the State. Cause: Administrative oversight with respect to preparation of the SEFA. Effect or Potential Effect: The original draft SEFA was prepared in error. Questioned Costs: None. Context: The original draft SEFA was prepared in error. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Alliance enhance its procedures and internal controls with respect to preparation and review of the SEFA. Views of Responsible Officials and Planned Corrective Actions: Grant agreements will be reviewed to confirm if expenditures from pass-through entities are related to federal or state grants, and appropriately include applicable federal grants and pass-through funds in the SEFA.
U.S. Department of the Treasury State of New Jersey Department of Community Affairs COVID-19 Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal Award Number and Years: G2022-09 (03/02/2021 – 12/31/2024) Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample Repeat Finding: No Finding Type: Material Weakness, Material Non-compliance Criteria Reporting Per 2 CFR 200.502, the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants. Further, the Uniform Guidance compliance supplement notes, each recipient must report program outlays and program income on a cash or accrual basis, as prescribed by the federal awarding agency. Also, in accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, direct grants and pass-through funds are fulfilled utilizing an advanced payment method and tracking reports. The grantee shall submit quarterly financial reports, in a format to be provided by the Department, and including the number of government full-time employees responding to COVID-19 as supported by this funding. The reports are prepared and submitted to allow for relevant and reliable information to be provided to the Federal government or State of New Jersey for tracking purposes. The reports are the source documents for the grantee to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the grantee’s financial statements in accordance with 2 CFR 200.502, Basis for determining Federal awards expended, for the SEFA. Procurement Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). In accordance with the grant agreement and the reporting requirements for the State of New Jersey Department of Community Affairs, recipients may use award funds to enter into contracts to procure goods and services necessary to implement one or more of the eligible purposes outlined in sections 602(c) and 603(c) of the Act and Treasury’s Interim Final Rule and Final Rule. As such, recipients are expected to have procurement policies and procedures in place that comply with the procurement standards outlined in the Uniform Guidance. Under the program, St. Joseph’s Health, Inc. must follow the procurement standards in 2 CFR sections 200.318 through 200.327, including ensuring that the procurement method used for the contracts are appropriate based on the dollar amount and conditions specified in 2 CFR section 200.320. Additionally, in accordance with Federal requirements, a non-Federal entity shall maintain internal controls over Federal programs designed to provide reasonable assurance that transactions are executed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a Federal program. Condition and Context Reporting On a quarterly basis, St. Joseph’s Health, Inc. (the System) prepares and reports to the State of New Jersey Department of Community Affairs (the Department) the program expenditures for Federal funding amounts on the tracking report of expenditures, which are then used to prepare the annual SEFA in conjunction with the general ledger detail at the end of the fiscal year. While the expenditures per the SEFA as prepared by the System was accurate and the quarterly reporting was accepted by the State, the System’s expenditures per the report of expenditures were based upon purchase order amounts, which includes expenditures that were incurred subsequent to year-end. Procurement The System has procurement policies and guidelines that are in accordance with the respective provisions of the Uniform Guidance. The System contracted with multiple vendors for several projects under the G2022-09 grant that were above the micro purchase threshold of $10,000, but below the simplified acquisition threshold of $250,000. However, the System did not obtain multiple quotes from different vendors to encourage fair competition in the market as per the System’s prescribed procurement policies and guidelines. The vendors were not suspended or debarred and the associated expenditures with these vendors incurred in fiscal year 2022 were determined to be allowable. The System’s policies and procedures to ensure compliance with the above compliance requirements did not include certain internal controls that were designed properly and operating effectively to ensure that the System’s report of expenditures submitted to the Department includes a reconciliation between incurred expenditures and purchase order balances or obtained the necessary quotes from potential bidders for procurements over the micro purchase threshold. Cause Management’s review of the submitted tracking report of expenditures did not identify the need for a reconciliation of incurred expenditures and purchase order balances reported to the Department and as such, as there is a variance between the amounts reported on the SEFA and the amounts reported to the Department on the quarterly reports of approximately $2.2 million. Additionally, they System did not retain or obtain the required documentation for procurements entered into with vendors for the grant in accordance with the System’s procurement policies and guidelines. Effect The System had a material variance in the amount of expenditures reported to the Department as compared to the SEFA, as well as did not comply with Federal regulations or its own policies and guidelines for procurement transactions and related document retention. Questioned costs None Recommendation Reporting We recommend that the System strengthen its processes and internal controls to ensure the tracking report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period based upon the general ledger and accounting records, used to prepare the annual SEFA, as compared to the purchase order balances. Procurement We recommend that the System strengthen its processes and internal controls to ensure the System obtains and retains the required documentation for each procurement based upon the type of procurement and dollar thresholds. View of Responsible Official Management agrees with the auditor’s recommendation and will strengthen its processes and internal controls to ensure the report of expenditures provided to the Department has a reconciliation of the amount of expenditures incurred in the period compared to the purchase order balances. In addition, Management will strengthen its processes and internal controls to ensure the System obtains and retains the required documentation for each procurement based upon the type of procurement and dollar thresholds.
Finding 2022-004 Compliance Requirement: Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Prior Year Finding Number: N/A Program: ALN 14.267 U.S. Department of Housing and Urban Development – Continuum of Care Program ALN 16.575 U.S. Department of Justice – Victims of Crime Acts Program ALN 21.027 U.S. Department of Treasury – Victims of Crime Acts Program Criteria - The Code of Federal Regulation (CFR) Section 200.510(b) states in part: “The auditee must also 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 CFR Section 200.502. Basis for determining Federal awards expended.” The SEFA must provide total federal awards expended for each individual Federal program. In accordance with Section 200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in Section 200.328 Financial Reporting and Section 200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The SEFA as prepared by management did not originally include one federal grant with federal expenditures during the year and one grant for which the Assistance Listing Number (ALN) did not match the grant documents. Cause - The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect – The original SEFA was incomplete. Questioned Costs: None. Context: The conditions outlined above are based on our testing of the Organization’s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Recommendation- We recommend management attend federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the federal funds are reported accurately on the SEFA and that programs are reported under the correct ALN. Views of Responsible Officials – The Organization concurs with the auditor’s findings and recommendations. The Organization will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. Refer to the Organization’s corrective action plan for further details.
Finding 2022-004 Compliance Requirement: Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Prior Year Finding Number: N/A Program: ALN 14.267 U.S. Department of Housing and Urban Development – Continuum of Care Program ALN 16.575 U.S. Department of Justice – Victims of Crime Acts Program ALN 21.027 U.S. Department of Treasury – Victims of Crime Acts Program Criteria - The Code of Federal Regulation (CFR) Section 200.510(b) states in part: “The auditee must also 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 CFR Section 200.502. Basis for determining Federal awards expended.” The SEFA must provide total federal awards expended for each individual Federal program. In accordance with Section 200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in Section 200.328 Financial Reporting and Section 200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The SEFA as prepared by management did not originally include one federal grant with federal expenditures during the year and one grant for which the Assistance Listing Number (ALN) did not match the grant documents. Cause - The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect – The original SEFA was incomplete. Questioned Costs: None. Context: The conditions outlined above are based on our testing of the Organization’s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Recommendation- We recommend management attend federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the federal funds are reported accurately on the SEFA and that programs are reported under the correct ALN. Views of Responsible Officials – The Organization concurs with the auditor’s findings and recommendations. The Organization will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. Refer to the Organization’s corrective action plan for further details.
Finding 2022-004 Compliance Requirement: Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Prior Year Finding Number: N/A Program: ALN 14.267 U.S. Department of Housing and Urban Development – Continuum of Care Program ALN 16.575 U.S. Department of Justice – Victims of Crime Acts Program ALN 21.027 U.S. Department of Treasury – Victims of Crime Acts Program Criteria - The Code of Federal Regulation (CFR) Section 200.510(b) states in part: “The auditee must also 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 CFR Section 200.502. Basis for determining Federal awards expended.” The SEFA must provide total federal awards expended for each individual Federal program. In accordance with Section 200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in Section 200.328 Financial Reporting and Section 200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The SEFA as prepared by management did not originally include one federal grant with federal expenditures during the year and one grant for which the Assistance Listing Number (ALN) did not match the grant documents. Cause - The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect – The original SEFA was incomplete. Questioned Costs: None. Context: The conditions outlined above are based on our testing of the Organization’s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Recommendation- We recommend management attend federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the federal funds are reported accurately on the SEFA and that programs are reported under the correct ALN. Views of Responsible Officials – The Organization concurs with the auditor’s findings and recommendations. The Organization will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. Refer to the Organization’s corrective action plan for further details.
Finding 2022-004 Compliance Requirement: Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Prior Year Finding Number: N/A Program: ALN 14.267 U.S. Department of Housing and Urban Development – Continuum of Care Program ALN 16.575 U.S. Department of Justice – Victims of Crime Acts Program ALN 21.027 U.S. Department of Treasury – Victims of Crime Acts Program Criteria - The Code of Federal Regulation (CFR) Section 200.510(b) states in part: “The auditee must also 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 CFR Section 200.502. Basis for determining Federal awards expended.” The SEFA must provide total federal awards expended for each individual Federal program. In accordance with Section 200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in Section 200.328 Financial Reporting and Section 200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The SEFA as prepared by management did not originally include one federal grant with federal expenditures during the year and one grant for which the Assistance Listing Number (ALN) did not match the grant documents. Cause - The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect – The original SEFA was incomplete. Questioned Costs: None. Context: The conditions outlined above are based on our testing of the Organization’s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Recommendation- We recommend management attend federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the federal funds are reported accurately on the SEFA and that programs are reported under the correct ALN. Views of Responsible Officials – The Organization concurs with the auditor’s findings and recommendations. The Organization will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. Refer to the Organization’s corrective action plan for further details.
Finding 2022-004 Compliance Requirement: Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Prior Year Finding Number: N/A Program: ALN 14.267 U.S. Department of Housing and Urban Development – Continuum of Care Program ALN 16.575 U.S. Department of Justice – Victims of Crime Acts Program ALN 21.027 U.S. Department of Treasury – Victims of Crime Acts Program Criteria - The Code of Federal Regulation (CFR) Section 200.510(b) states in part: “The auditee must also 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 CFR Section 200.502. Basis for determining Federal awards expended.” The SEFA must provide total federal awards expended for each individual Federal program. In accordance with Section 200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in Section 200.328 Financial Reporting and Section 200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The SEFA as prepared by management did not originally include one federal grant with federal expenditures during the year and one grant for which the Assistance Listing Number (ALN) did not match the grant documents. Cause - The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect – The original SEFA was incomplete. Questioned Costs: None. Context: The conditions outlined above are based on our testing of the Organization’s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Recommendation- We recommend management attend federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the federal funds are reported accurately on the SEFA and that programs are reported under the correct ALN. Views of Responsible Officials – The Organization concurs with the auditor’s findings and recommendations. The Organization will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. Refer to the Organization’s corrective action plan for further details.
Finding 2022-004 Compliance Requirement: Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Prior Year Finding Number: N/A Program: ALN 14.267 U.S. Department of Housing and Urban Development – Continuum of Care Program ALN 16.575 U.S. Department of Justice – Victims of Crime Acts Program ALN 21.027 U.S. Department of Treasury – Victims of Crime Acts Program Criteria - The Code of Federal Regulation (CFR) Section 200.510(b) states in part: “The auditee must also 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 CFR Section 200.502. Basis for determining Federal awards expended.” The SEFA must provide total federal awards expended for each individual Federal program. In accordance with Section 200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in Section 200.328 Financial Reporting and Section 200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition – The SEFA as prepared by management did not originally include one federal grant with federal expenditures during the year and one grant for which the Assistance Listing Number (ALN) did not match the grant documents. Cause - The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect – The original SEFA was incomplete. Questioned Costs: None. Context: The conditions outlined above are based on our testing of the Organization’s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Recommendation- We recommend management attend federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the federal funds are reported accurately on the SEFA and that programs are reported under the correct ALN. Views of Responsible Officials – The Organization concurs with the auditor’s findings and recommendations. The Organization will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. Refer to the Organization’s corrective action plan for further details.
2022‐001—FINANCIAL TRACKING OF FEDERAL GRANTS AND PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal Agency: All presented in the Schedule of Expenditures of Federal Awards (SEFA). Federal Program Name: All presented in the SEFA. Assistance Listing Number: All presented in SEFA. Federal Award Identification Number and Year: All presented in SEFA. Award Period: N/A Questioned Costs: None Type of Finding • (E) Significant Deficiency in Internal Control Over Compliance of Federal Awards • (F) Instance of Noncompliance related to Federal Awards Statement of Condition During our audit, we were unable to determine if the Schedule of Expenditures of Federal Awards (SEFA) was accurate. While we believe the selection of the NMH200032-2020 and NMH2001W068-2020 grants were accurate as major federal programs per our determination calculation, we did not receive sufficient audit evidence on the accuracy of the expenditures presented in the SEFA. Therefore, we were unable to perform sufficient auditing procedures such as comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements, This has led us to disclaim our opinion related to whether the SEFA is fairly stated, in all material respects, in relation to the financial statements as a whole for the year ended December 31, 2022. Criteria 2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 200.502 Basis for Determining Federal Awards Expended. Per 2 CFR 200.502 the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program establish and maintain effective internal controls over Federal awards that provides reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Effect Without an established process governed by effective internal controls, the Housing Trust may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, the errors could result in improper selections of major federal program(s) for the single audit and a substandard single audit. This could affect the auditee’s eligibility for future federal awards or result in audit findings by the federal awarding agencies or pass-through entities. Cause the Housing Trust did not have adequate policies and procedures to ensure that the information reported in its SEFA was accurate and complete. Also, the Housing Trust did not have a system to reconcile its SEFA with its general ledger and other supporting documents. Recommendation We recommend the Housing Trust improve the financial tracking of its grants, corresponding expenses and other activity related to those federal grants to ensure the information reported in its SEFA is accurate and complete. We also recommend that the auditee establish a system to reconcile its SEFA with its general ledger and other supporting documents, including the name of grantor, the assistance listing #, the pass-through number, if applicable, and review its SEFA for any errors or omissions before submission. View of Responsible Officials and Corrective Action Plan Response. Agreed. Where feasible, the Housing Trust will aim to improve management of all federal grants. A process of documentation verification prior to any requests made for financial draws will include employee, supervisor, business operations manager, and executive director level approvals to ensure compliance and availability of funds. A monthly federal request for reimbursements with all grantee information will be used and reconciled monthly with QuickBooks. This report will mirror the SEFA form so auditors will receive the information in a timely manner. For any quarterly reports, the three months of reporting will again be reconciled prior to submission. All new processes and compliance will be updated in the policies and procedure manual. As the Executive Director prepares the 2024 budget, a reorganization of the business operations department will be sought. A new position to prepare and work on all federal grant tasks will be hired and report to the Business Operations Manager. In the meantime, the Business Operations Manager has started to develop checks and balances. Corrective Action Plan Timeline: Immediately Designation Of Employee Position Responsible For Meeting Deadline: Business Operations Manager
2022‐001—FINANCIAL TRACKING OF FEDERAL GRANTS AND PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal Agency: All presented in the Schedule of Expenditures of Federal Awards (SEFA). Federal Program Name: All presented in the SEFA. Assistance Listing Number: All presented in SEFA. Federal Award Identification Number and Year: All presented in SEFA. Award Period: N/A Questioned Costs: None Type of Finding • (E) Significant Deficiency in Internal Control Over Compliance of Federal Awards • (F) Instance of Noncompliance related to Federal Awards Statement of Condition During our audit, we were unable to determine if the Schedule of Expenditures of Federal Awards (SEFA) was accurate. While we believe the selection of the NMH200032-2020 and NMH2001W068-2020 grants were accurate as major federal programs per our determination calculation, we did not receive sufficient audit evidence on the accuracy of the expenditures presented in the SEFA. Therefore, we were unable to perform sufficient auditing procedures such as comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements, This has led us to disclaim our opinion related to whether the SEFA is fairly stated, in all material respects, in relation to the financial statements as a whole for the year ended December 31, 2022. Criteria 2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 200.502 Basis for Determining Federal Awards Expended. Per 2 CFR 200.502 the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards. In addition, 2 CFR Part 200.303 requires the program establish and maintain effective internal controls over Federal awards that provides reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Effect Without an established process governed by effective internal controls, the Housing Trust may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, the errors could result in improper selections of major federal program(s) for the single audit and a substandard single audit. This could affect the auditee’s eligibility for future federal awards or result in audit findings by the federal awarding agencies or pass-through entities. Cause the Housing Trust did not have adequate policies and procedures to ensure that the information reported in its SEFA was accurate and complete. Also, the Housing Trust did not have a system to reconcile its SEFA with its general ledger and other supporting documents. Recommendation We recommend the Housing Trust improve the financial tracking of its grants, corresponding expenses and other activity related to those federal grants to ensure the information reported in its SEFA is accurate and complete. We also recommend that the auditee establish a system to reconcile its SEFA with its general ledger and other supporting documents, including the name of grantor, the assistance listing #, the pass-through number, if applicable, and review its SEFA for any errors or omissions before submission. View of Responsible Officials and Corrective Action Plan Response. Agreed. Where feasible, the Housing Trust will aim to improve management of all federal grants. A process of documentation verification prior to any requests made for financial draws will include employee, supervisor, business operations manager, and executive director level approvals to ensure compliance and availability of funds. A monthly federal request for reimbursements with all grantee information will be used and reconciled monthly with QuickBooks. This report will mirror the SEFA form so auditors will receive the information in a timely manner. For any quarterly reports, the three months of reporting will again be reconciled prior to submission. All new processes and compliance will be updated in the policies and procedure manual. As the Executive Director prepares the 2024 budget, a reorganization of the business operations department will be sought. A new position to prepare and work on all federal grant tasks will be hired and report to the Business Operations Manager. In the meantime, the Business Operations Manager has started to develop checks and balances. Corrective Action Plan Timeline: Immediately Designation Of Employee Position Responsible For Meeting Deadline: Business Operations Manager
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
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: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.
2 C.F.R. Subpart F 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the County's financial statements which must include the total federal awards expended as determined in accordance with 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal Agency (2) 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. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) 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. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in 200.414 Indirect (F&A) costs. 2 CFR Part 170 "subaward" has the meaning given in 2 CFR 200.1 and means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a federal award received by the pass-through entity. It does not include payments to a contractor or payments to an individual that is a beneficiary of a federal program. A subaward may be provided through any form of legal agreement, including an agreement that the pass-through entity considers a contract. The County's Federal Schedule had the following error: Funds provided to subrecipients for the Coronavirus State and Local Fiscal Recovery Funds (AL 21.027) were understated by $3,000,000. Errors and omissions to the Schedule of Expenditures of Federal Awards could adversely affect future grant awards in addition to causing an inaccurate assessment of major federal programs that would be subjected to audit. Adjustments, to which management have agreed, are reflected in the accompanying Schedule. County management should review all grant and loan awards and be familiar with federal reporting requirements. The County should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This may help ensure the Schedule is complete and accurate and major federal programs are correctly identified for audit.
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Criteria: 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. Condition Found, Including Perspective: The Schedule of Expenditures of Federal Awards (SEFA) prepared by management contained differences between federal expenditures reported and the amounts supported by the underlying books and records. In addition, there is no evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA to ensure that amounts are properly presented. Possible Cause and Effect: While the System performs a review during the compilation of the SEFA, controls were not designed or implemented effectively to identify errors in the SEFA and to maintain evidence of management’s detail review of the reconciliation between the underlying expenditure detail to the SEFA. Questioned Costs: None
Program Information: Temporary Assistance for Needy Families (ALN #93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting- The auditee must prepare a schedule of expenditures of Federal awards (the ?SEFA?) for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 Basis for determining Federal awards expended. At a minimum, the schedule must: (1) 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 Research and Development (?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. (2) For Federal awards received as a subrecipient, the name of the passthrough entity and identifying number assigned by the pass-through entity must be included. (3) 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. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in 2 CFR 200.502(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. (6) 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 2 CFR 200.414. Condition: The SEFA, as prepared by management, did not originally include all expenditures for one federal grant. Cause: Administrative oversight with respect to preparation of the SEFA. Effect or Potential Effect: The original draft SEFA was incomplete. Questioned Costs: None. Context: The original draft SEFA was incomplete. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Alliance enhance its procedures and internal controls with respect to preparation and review of the SEFA. Views of Responsible Officials and Planned Corrective Actions: Grant agreements will be reviewed to confirm if expenditures from pass-through entities are related to federal or state grants, and appropriately include applicable federal grants in the SEFA.
Finding 2022-001 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Federal Agency: Department of Homeland Security Assistance Listing: 97.036 ? COVID-19 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (FEMA) Pass-Through Grantor: Michigan State Police Emergency Management and Homeland Security Division Pass-Through Award Number: 4494-DR-MI Pass-Through Award Period: 1/20/2020-7/1/2022 Federal Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Assistance Listing: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Pass-Through Award Period: 1/1/2020-12/31/2022 (Periods 3 and 4) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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).? 2 CFR 200.510 requires 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 in accordance with Section 200.502.? 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). Condition: The Schedule of Expenditures of Federal Awards (the Schedule) prepared by the Corewell Health and Subsidiaries (the System) did not appropriately reflect the federal expenses incurred. The final Schedule was corrected for the differences identified. Cause: Management did not design internal controls to ensure appropriate accumulation of the data necessary to complete the Schedule. Effect or Potential Effect: Federal expenditures were inappropriately included or excluded from the Schedule. Questioned Costs: None Context: Total federal expenses included on the Schedule were $102,235,937 for the year ended December 31, 2022. Total expenses included on the final Schedule were $101,562,371 for the year ended December 31, 2022. The federal expenditures were misstated as follows: See Schedule of Findings and Questioned Costs. Identification as a Repeat Finding: Partial Repeat Finding of Corewell Health East 2021-001. Recommendation: Management should assess its internal controls over the identification of federal expenditures to ensure the Schedule is complete. Views of Responsible Officials: The enhanced Schedule process and controls implemented by Corewell Health East in 2023 will be reviewed. The misstated amounts of the R&D Cluster occurred as a result of the timing of posted expenses during the first month of the merger of Spectrum Health and Beaumont Health in February 2022. This was a one-time occurrence and we do not anticipate that this will be an issue in future years. In addition, the successful implementation and transition to Workday, a new Corporate financial management system, has improved award setup functionality that enables improved differentiation of awards, identifying which need to be included on the annual Schedule of Expenditures of Federal Awards and those that should be excluded. The understatement related to FEMA was a one-time occurrence related to the clarification of guidelines on the inclusion of a new Category Z FEMA obligation in 2022 on the SEFA. This has been corrected in 2023. The overstatement related to PRF was due to an improper inclusion of Corewell Health East funding on the Schedule and an adjustment related to the submitted amount of Corewell Health West funding on the Schedule. On the 2023 SEFA we will implement a management review and sign-off of the inputs prior to submission.
Finding 2022-001 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Federal Agency: Department of Homeland Security Assistance Listing: 97.036 ? COVID-19 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (FEMA) Pass-Through Grantor: Michigan State Police Emergency Management and Homeland Security Division Pass-Through Award Number: 4494-DR-MI Pass-Through Award Period: 1/20/2020-7/1/2022 Federal Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Assistance Listing: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Pass-Through Award Period: 1/1/2020-12/31/2022 (Periods 3 and 4) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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).? 2 CFR 200.510 requires 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 in accordance with Section 200.502.? 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). Condition: The Schedule of Expenditures of Federal Awards (the Schedule) prepared by the Corewell Health and Subsidiaries (the System) did not appropriately reflect the federal expenses incurred. The final Schedule was corrected for the differences identified. Cause: Management did not design internal controls to ensure appropriate accumulation of the data necessary to complete the Schedule. Effect or Potential Effect: Federal expenditures were inappropriately included or excluded from the Schedule. Questioned Costs: None Context: Total federal expenses included on the Schedule were $102,235,937 for the year ended December 31, 2022. Total expenses included on the final Schedule were $101,562,371 for the year ended December 31, 2022. The federal expenditures were misstated as follows: See Schedule of Findings and Questioned Costs. Identification as a Repeat Finding: Partial Repeat Finding of Corewell Health East 2021-001. Recommendation: Management should assess its internal controls over the identification of federal expenditures to ensure the Schedule is complete. Views of Responsible Officials: The enhanced Schedule process and controls implemented by Corewell Health East in 2023 will be reviewed. The misstated amounts of the R&D Cluster occurred as a result of the timing of posted expenses during the first month of the merger of Spectrum Health and Beaumont Health in February 2022. This was a one-time occurrence and we do not anticipate that this will be an issue in future years. In addition, the successful implementation and transition to Workday, a new Corporate financial management system, has improved award setup functionality that enables improved differentiation of awards, identifying which need to be included on the annual Schedule of Expenditures of Federal Awards and those that should be excluded. The understatement related to FEMA was a one-time occurrence related to the clarification of guidelines on the inclusion of a new Category Z FEMA obligation in 2022 on the SEFA. This has been corrected in 2023. The overstatement related to PRF was due to an improper inclusion of Corewell Health East funding on the Schedule and an adjustment related to the submitted amount of Corewell Health West funding on the Schedule. On the 2023 SEFA we will implement a management review and sign-off of the inputs prior to submission.
Finding 2022-001 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Federal Agency: Department of Homeland Security Assistance Listing: 97.036 ? COVID-19 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (FEMA) Pass-Through Grantor: Michigan State Police Emergency Management and Homeland Security Division Pass-Through Award Number: 4494-DR-MI Pass-Through Award Period: 1/20/2020-7/1/2022 Federal Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Assistance Listing: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Pass-Through Award Period: 1/1/2020-12/31/2022 (Periods 3 and 4) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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).? 2 CFR 200.510 requires 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 in accordance with Section 200.502.? 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). Condition: The Schedule of Expenditures of Federal Awards (the Schedule) prepared by the Corewell Health and Subsidiaries (the System) did not appropriately reflect the federal expenses incurred. The final Schedule was corrected for the differences identified. Cause: Management did not design internal controls to ensure appropriate accumulation of the data necessary to complete the Schedule. Effect or Potential Effect: Federal expenditures were inappropriately included or excluded from the Schedule. Questioned Costs: None Context: Total federal expenses included on the Schedule were $102,235,937 for the year ended December 31, 2022. Total expenses included on the final Schedule were $101,562,371 for the year ended December 31, 2022. The federal expenditures were misstated as follows: See Schedule of Findings and Questioned Costs. Identification as a Repeat Finding: Partial Repeat Finding of Corewell Health East 2021-001. Recommendation: Management should assess its internal controls over the identification of federal expenditures to ensure the Schedule is complete. Views of Responsible Officials: The enhanced Schedule process and controls implemented by Corewell Health East in 2023 will be reviewed. The misstated amounts of the R&D Cluster occurred as a result of the timing of posted expenses during the first month of the merger of Spectrum Health and Beaumont Health in February 2022. This was a one-time occurrence and we do not anticipate that this will be an issue in future years. In addition, the successful implementation and transition to Workday, a new Corporate financial management system, has improved award setup functionality that enables improved differentiation of awards, identifying which need to be included on the annual Schedule of Expenditures of Federal Awards and those that should be excluded. The understatement related to FEMA was a one-time occurrence related to the clarification of guidelines on the inclusion of a new Category Z FEMA obligation in 2022 on the SEFA. This has been corrected in 2023. The overstatement related to PRF was due to an improper inclusion of Corewell Health East funding on the Schedule and an adjustment related to the submitted amount of Corewell Health West funding on the Schedule. On the 2023 SEFA we will implement a management review and sign-off of the inputs prior to submission.
Finding 2022-001 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Federal Agency: Department of Homeland Security Assistance Listing: 97.036 ? COVID-19 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (FEMA) Pass-Through Grantor: Michigan State Police Emergency Management and Homeland Security Division Pass-Through Award Number: 4494-DR-MI Pass-Through Award Period: 1/20/2020-7/1/2022 Federal Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Assistance Listing: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Pass-Through Award Period: 1/1/2020-12/31/2022 (Periods 3 and 4) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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).? 2 CFR 200.510 requires 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 in accordance with Section 200.502.? 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). Condition: The Schedule of Expenditures of Federal Awards (the Schedule) prepared by the Corewell Health and Subsidiaries (the System) did not appropriately reflect the federal expenses incurred. The final Schedule was corrected for the differences identified. Cause: Management did not design internal controls to ensure appropriate accumulation of the data necessary to complete the Schedule. Effect or Potential Effect: Federal expenditures were inappropriately included or excluded from the Schedule. Questioned Costs: None Context: Total federal expenses included on the Schedule were $102,235,937 for the year ended December 31, 2022. Total expenses included on the final Schedule were $101,562,371 for the year ended December 31, 2022. The federal expenditures were misstated as follows: See Schedule of Findings and Questioned Costs. Identification as a Repeat Finding: Partial Repeat Finding of Corewell Health East 2021-001. Recommendation: Management should assess its internal controls over the identification of federal expenditures to ensure the Schedule is complete. Views of Responsible Officials: The enhanced Schedule process and controls implemented by Corewell Health East in 2023 will be reviewed. The misstated amounts of the R&D Cluster occurred as a result of the timing of posted expenses during the first month of the merger of Spectrum Health and Beaumont Health in February 2022. This was a one-time occurrence and we do not anticipate that this will be an issue in future years. In addition, the successful implementation and transition to Workday, a new Corporate financial management system, has improved award setup functionality that enables improved differentiation of awards, identifying which need to be included on the annual Schedule of Expenditures of Federal Awards and those that should be excluded. The understatement related to FEMA was a one-time occurrence related to the clarification of guidelines on the inclusion of a new Category Z FEMA obligation in 2022 on the SEFA. This has been corrected in 2023. The overstatement related to PRF was due to an improper inclusion of Corewell Health East funding on the Schedule and an adjustment related to the submitted amount of Corewell Health West funding on the Schedule. On the 2023 SEFA we will implement a management review and sign-off of the inputs prior to submission.
Finding 2022-001 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Federal Agency: Department of Homeland Security Assistance Listing: 97.036 ? COVID-19 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (FEMA) Pass-Through Grantor: Michigan State Police Emergency Management and Homeland Security Division Pass-Through Award Number: 4494-DR-MI Pass-Through Award Period: 1/20/2020-7/1/2022 Federal Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Assistance Listing: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Pass-Through Award Period: 1/1/2020-12/31/2022 (Periods 3 and 4) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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).? 2 CFR 200.510 requires 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 in accordance with Section 200.502.? 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). Condition: The Schedule of Expenditures of Federal Awards (the Schedule) prepared by the Corewell Health and Subsidiaries (the System) did not appropriately reflect the federal expenses incurred. The final Schedule was corrected for the differences identified. Cause: Management did not design internal controls to ensure appropriate accumulation of the data necessary to complete the Schedule. Effect or Potential Effect: Federal expenditures were inappropriately included or excluded from the Schedule. Questioned Costs: None Context: Total federal expenses included on the Schedule were $102,235,937 for the year ended December 31, 2022. Total expenses included on the final Schedule were $101,562,371 for the year ended December 31, 2022. The federal expenditures were misstated as follows: See Schedule of Findings and Questioned Costs. Identification as a Repeat Finding: Partial Repeat Finding of Corewell Health East 2021-001. Recommendation: Management should assess its internal controls over the identification of federal expenditures to ensure the Schedule is complete. Views of Responsible Officials: The enhanced Schedule process and controls implemented by Corewell Health East in 2023 will be reviewed. The misstated amounts of the R&D Cluster occurred as a result of the timing of posted expenses during the first month of the merger of Spectrum Health and Beaumont Health in February 2022. This was a one-time occurrence and we do not anticipate that this will be an issue in future years. In addition, the successful implementation and transition to Workday, a new Corporate financial management system, has improved award setup functionality that enables improved differentiation of awards, identifying which need to be included on the annual Schedule of Expenditures of Federal Awards and those that should be excluded. The understatement related to FEMA was a one-time occurrence related to the clarification of guidelines on the inclusion of a new Category Z FEMA obligation in 2022 on the SEFA. This has been corrected in 2023. The overstatement related to PRF was due to an improper inclusion of Corewell Health East funding on the Schedule and an adjustment related to the submitted amount of Corewell Health West funding on the Schedule. On the 2023 SEFA we will implement a management review and sign-off of the inputs prior to submission.
Finding 2022-001 Identification of the Federal Program: Federal Agency: U.S. Department of Health and Human Services, United States Department of Defense Assistance Listing: Various ? Research & Development (R&D) Cluster Pass-Through Grantor: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Federal Agency: Department of Homeland Security Assistance Listing: 97.036 ? COVID-19 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) (FEMA) Pass-Through Grantor: Michigan State Police Emergency Management and Homeland Security Division Pass-Through Award Number: 4494-DR-MI Pass-Through Award Period: 1/20/2020-7/1/2022 Federal Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Assistance Listing: 93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Pass-Through Award Period: 1/1/2020-12/31/2022 (Periods 3 and 4) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 2 CFR Section 200.303 of the Uniform Guidance States the Following Regarding Internal Control: ?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).? 2 CFR 200.510 requires 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 in accordance with Section 200.502.? 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). Condition: The Schedule of Expenditures of Federal Awards (the Schedule) prepared by the Corewell Health and Subsidiaries (the System) did not appropriately reflect the federal expenses incurred. The final Schedule was corrected for the differences identified. Cause: Management did not design internal controls to ensure appropriate accumulation of the data necessary to complete the Schedule. Effect or Potential Effect: Federal expenditures were inappropriately included or excluded from the Schedule. Questioned Costs: None Context: Total federal expenses included on the Schedule were $102,235,937 for the year ended December 31, 2022. Total expenses included on the final Schedule were $101,562,371 for the year ended December 31, 2022. The federal expenditures were misstated as follows: See Schedule of Findings and Questioned Costs. Identification as a Repeat Finding: Partial Repeat Finding of Corewell Health East 2021-001. Recommendation: Management should assess its internal controls over the identification of federal expenditures to ensure the Schedule is complete. Views of Responsible Officials: The enhanced Schedule process and controls implemented by Corewell Health East in 2023 will be reviewed. The misstated amounts of the R&D Cluster occurred as a result of the timing of posted expenses during the first month of the merger of Spectrum Health and Beaumont Health in February 2022. This was a one-time occurrence and we do not anticipate that this will be an issue in future years. In addition, the successful implementation and transition to Workday, a new Corporate financial management system, has improved award setup functionality that enables improved differentiation of awards, identifying which need to be included on the annual Schedule of Expenditures of Federal Awards and those that should be excluded. The understatement related to FEMA was a one-time occurrence related to the clarification of guidelines on the inclusion of a new Category Z FEMA obligation in 2022 on the SEFA. This has been corrected in 2023. The overstatement related to PRF was due to an improper inclusion of Corewell Health East funding on the Schedule and an adjustment related to the submitted amount of Corewell Health West funding on the Schedule. On the 2023 SEFA we will implement a management review and sign-off of the inputs prior to submission.