Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-003: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: NDRN experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of NDRN's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of NDRN’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend NDRN establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2003-04: Schedule of Expenditures of Federal Awards Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003 Questioned Costs: None. Context: The exception noted during the audit pertained to all programs under the SEFA for the year ended September 30, 2023. Identification as a Repeat Finding, if Applicable: Not applicable. Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA). Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As a result, a significant amount of time was spent by management during the audit process reconciling the schedule, resulting in an audit delay. Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees responsible for financial reporting and tracking of Federal award expenditures. Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA. Recommendation: We recommend that each Federal program should have a distinct code set up in the accounting system in order to track the direct costs attributable to that program. We also recommend that management properly reconcile Federal expenditures during year on a consistent basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003 Questioned Costs: None. Context: The exception noted during the audit pertained to all programs under the SEFA for the year ended September 30, 2023. Identification as a Repeat Finding, if Applicable: Not applicable. Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA). Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As a result, a significant amount of time was spent by management during the audit process reconciling the schedule, resulting in an audit delay. Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees responsible for financial reporting and tracking of Federal award expenditures. Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA. Recommendation: We recommend that each Federal program should have a distinct code set up in the accounting system in order to track the direct costs attributable to that program. We also recommend that management properly reconcile Federal expenditures during year on a consistent basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003 Questioned Costs: None. Context: The exception noted during the audit pertained to all programs under the SEFA for the year ended September 30, 2023. Identification as a Repeat Finding, if Applicable: Not applicable. Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA). Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As a result, a significant amount of time was spent by management during the audit process reconciling the schedule, resulting in an audit delay. Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees responsible for financial reporting and tracking of Federal award expenditures. Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA. Recommendation: We recommend that each Federal program should have a distinct code set up in the accounting system in order to track the direct costs attributable to that program. We also recommend that management properly reconcile Federal expenditures during year on a consistent basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003 Questioned Costs: None. Context: The exception noted during the audit pertained to all programs under the SEFA for the year ended September 30, 2023. Identification as a Repeat Finding, if Applicable: Not applicable. Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA). Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As a result, a significant amount of time was spent by management during the audit process reconciling the schedule, resulting in an audit delay. Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees responsible for financial reporting and tracking of Federal award expenditures. Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA. Recommendation: We recommend that each Federal program should have a distinct code set up in the accounting system in order to track the direct costs attributable to that program. We also recommend that management properly reconcile Federal expenditures during year on a consistent basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003 Questioned Costs: None. Context: The exception noted during the audit pertained to all programs under the SEFA for the year ended September 30, 2023. Identification as a Repeat Finding, if Applicable: Not applicable. Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA). Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As a result, a significant amount of time was spent by management during the audit process reconciling the schedule, resulting in an audit delay. Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees responsible for financial reporting and tracking of Federal award expenditures. Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA. Recommendation: We recommend that each Federal program should have a distinct code set up in the accounting system in order to track the direct costs attributable to that program. We also recommend that management properly reconcile Federal expenditures during year on a consistent basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003 Questioned Costs: None. Context: The exception noted during the audit pertained to all programs under the SEFA for the year ended September 30, 2023. Identification as a Repeat Finding, if Applicable: Not applicable. Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA). Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As a result, a significant amount of time was spent by management during the audit process reconciling the schedule, resulting in an audit delay. Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees responsible for financial reporting and tracking of Federal award expenditures. Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA. Recommendation: We recommend that each Federal program should have a distinct code set up in the accounting system in order to track the direct costs attributable to that program. We also recommend that management properly reconcile Federal expenditures during year on a consistent basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003 Questioned Costs: None. Context: The exception noted during the audit pertained to all programs under the SEFA for the year ended September 30, 2023. Identification as a Repeat Finding, if Applicable: Not applicable. Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA). Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As a result, a significant amount of time was spent by management during the audit process reconciling the schedule, resulting in an audit delay. Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees responsible for financial reporting and tracking of Federal award expenditures. Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA. Recommendation: We recommend that each Federal program should have a distinct code set up in the accounting system in order to track the direct costs attributable to that program. We also recommend that management properly reconcile Federal expenditures during year on a consistent basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003 Questioned Costs: None. Context: The exception noted during the audit pertained to all programs under the SEFA for the year ended September 30, 2023. Identification as a Repeat Finding, if Applicable: Not applicable. Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA). Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As a result, a significant amount of time was spent by management during the audit process reconciling the schedule, resulting in an audit delay. Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees responsible for financial reporting and tracking of Federal award expenditures. Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA. Recommendation: We recommend that each Federal program should have a distinct code set up in the accounting system in order to track the direct costs attributable to that program. We also recommend that management properly reconcile Federal expenditures during year on a consistent basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Assistance Listing, Federal Agency, and Program Name 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 14.218, U.S. Department of Housing and Urban Development, CDBG Entitlement Grants Cluster Community Development Block Grant Federal Award Identification Number and Year N/A Pass through Entity ALN 14.218 Wayne County Finding Type Material weakness Repeat Finding Yes 2022 002 Criteria The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of Federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule. Condition The schedule of expenditures of federal awards (SEFA) was not accurate. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context During the fiscal year ended September 30, 2023, the City expended approximately $921,000 of federal funding. The initial draft of the SEFA included the following inaccuracies: ALN 66.818 The expenditures reported on the SEFA were understated by $689,255. ALN 14.218 The expenditures reported on the SEFA were understated by $55,192. The errors noted above have been corrected on the SEFA as of September 30, 2023. Cause and Effect Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit. The errors resulted in the understatement of federal expenditures. Additionally, the understatement of federal expenditures on the SEFA resulted in the incorrect conclusion that federal activity was below $750,000 and, therefore, a single audit was not needed. Recommendation We recommend the City implement a process to ensure that the SEFA is complete and accurate. Views of Responsible Officials and Corrective Action Plan The City will review its process for identifying and communicating Federal Grant expenditures to its auditors.
Assistance Listing, Federal Agency, and Program Name 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 14.218, U.S. Department of Housing and Urban Development, CDBG Entitlement Grants Cluster Community Development Block Grant Federal Award Identification Number and Year N/A Pass through Entity ALN 14.218 Wayne County Finding Type Material weakness Repeat Finding Yes 2022 002 Criteria The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of Federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule. Condition The schedule of expenditures of federal awards (SEFA) was not accurate. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context During the fiscal year ended September 30, 2023, the City expended approximately $921,000 of federal funding. The initial draft of the SEFA included the following inaccuracies: ALN 66.818 The expenditures reported on the SEFA were understated by $689,255. ALN 14.218 The expenditures reported on the SEFA were understated by $55,192. The errors noted above have been corrected on the SEFA as of September 30, 2023. Cause and Effect Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit. The errors resulted in the understatement of federal expenditures. Additionally, the understatement of federal expenditures on the SEFA resulted in the incorrect conclusion that federal activity was below $750,000 and, therefore, a single audit was not needed. Recommendation We recommend the City implement a process to ensure that the SEFA is complete and accurate. Views of Responsible Officials and Corrective Action Plan The City will review its process for identifying and communicating Federal Grant expenditures to its auditors.
Assistance Listing Number, Federal Agency, and Program Name - ALN 66.458, U.S. Environment Protection Agency Capitalization Grants for Clean Water State Revolving Funds (CWSRF) Federal Award Identification Number and Year - Project Number 5834 01 (2023) Pass through Entity - Michigan Department Environment, Great Lakes and Energy Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must prepare appropriate financial statements, including the schedule of expenditures of federal awards, in accordance with 200.510 financial statements. Per 2 CFR 200.510(b), the auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502 basis for determining federal awards expended. Condition - Controls in place were not adequate to ensure the schedule of federal expenditures was complete and accurate. If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - The County did not initially include the funds received through the Capitalization Grants for Clean Water State Revolving Funds. Cause and Effect - The County did not have a process in place to identify all potential sources of federal funding received during the year, resulting in the SEFA being incomplete for the year ended September 30, 2023. Upon discovery of the error, the County prepared a SEFA that included the Capitalization Grants for Clean Water State Revolving Funds. This lack of controls resulted in the reissuance of the 2023 single audit. Recommendation - Management should implement controls to ensure all federal funding received is properly identified as such and included on the SEFA. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding as reported. The federal funding was not received until fiscal year 2023, while expenditures were incurred prior to fiscal year 2023. The timing of events contributed to the oversight on the 2023 SEFA. The County has reeducated staff on the preparation of the SEFA in order to prevent this error from reoccurring.
2023-02 Expenditures of Federal Awards Internal Control and Compliance AL/CFDA#: 93.243 Federal Program: Substance Abuse and Mental Health Services Projects of Regional and National Significance Criteria: The Uniform Guidance-2CFR 200.508(b) and 2 CFR 200.508(d)-state: “The auditee must:…(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipts of the auditor’s report(s), or nine months after the end of the audit period.” Condition: The NIWHRC experienced a change in the Executive Director and also in their accounting firm during the period under audit. The NIWHRC also experienced difficulty in finding a qualified audit firm to perform the audit. Cause and Effect: NIWHRC is out of compliance with the reporting deadline for the audit. Recommendation: I recommend the NIWHRC develop policy and procedures to ensure the organization remains in compliance with federal award obligations. Responsible Official's Response: The Executive Director has returned from sabbatical and has resumed duties and the NIWHRC has engaged a CPA audit firm.
Failure to inform auditors of the need for a single audit. Federal programs impacted: All ALNs, see SEFA. (General) Questioned Costs: None, NA Condition: The Clinic expended more than $750,000 in federal awards, triggering a single audit requirement and did not bring this to the auditors attention during the audit. The Clininc failed to properly maintain appropriate records to determine the need for a single audit as required by Uniform Guidance. Criteria: 2 CFR section 200.508(b)&(d) states that one responsibility of the auditee is to prepare appropriate financial statements, including the SEFA in accordance with 200.510. Part (d) states they must provide auditor with information as needed to perform the audit required. See also section 99.300(a). Cause: The Clinic did not have proper controls in place to determine the need for a single audit as required by the Uniform Guidance. Effect: Engagement letter and fees had to be reevaluated, and the nature, timing, and extent of the audit were impacted by the additional requirement. Recommendation: We recommend that the Clinic develops and implements policies and procedures to properly prepare the SEFA. Management Response: Management stated they will do a better job of tracking federal expenditures for the next audit year as they do not want to trigger a single audit again knowingly or otherwise and do not want any delays in the audit like this year.
Failure to inform auditors of the need for a single audit. Federal programs impacted: All ALNs, see SEFA. (General) Questioned Costs: None, NA Condition: The Clinic expended more than $750,000 in federal awards, triggering a single audit requirement and did not bring this to the auditors attention during the audit. The Clininc failed to properly maintain appropriate records to determine the need for a single audit as required by Uniform Guidance. Criteria: 2 CFR section 200.508(b)&(d) states that one responsibility of the auditee is to prepare appropriate financial statements, including the SEFA in accordance with 200.510. Part (d) states they must provide auditor with information as needed to perform the audit required. See also section 99.300(a). Cause: The Clinic did not have proper controls in place to determine the need for a single audit as required by the Uniform Guidance. Effect: Engagement letter and fees had to be reevaluated, and the nature, timing, and extent of the audit were impacted by the additional requirement. Recommendation: We recommend that the Clinic develops and implements policies and procedures to properly prepare the SEFA. Management Response: Management stated they will do a better job of tracking federal expenditures for the next audit year as they do not want to trigger a single audit again knowingly or otherwise and do not want any delays in the audit like this year.
Finding 2023-001: SEFA – Material Weakness Criteria: U.S. Code § 200.508(b) states that an auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) in accordance with § 200.510. U.S. Code § 200.510(b)(3) states that at a minimum the SEFA provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. The inclusion of correct Assistance Listing numbers on the SEFA is a critical factor in determining major and non-major programs and designing appropriate audit procedures for individual grants. Condition: The SEFA prepared by management included an incorrect Assistance Listing (AL) number for one grant. Federal grant AL No. 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities was incorrectly identified as AL No. 20.507 Mobility Management. While both grants are from the Federal Transit Agency, they fall under different clusters in the Office of Management and Budget’s Compliance Supplement and thus have different audit requirements. Cause: Paratransit’s internal controls over the completeness of the SEFA were not operating effectively. Effect: The grant in question was initially identified as a major grant and certain audit procedures were applied. The revision of the AL number resulted in this grant being considered non-major, thus not required to be tested. Recommendation: We recommend management verify with the grantor the AL number of the grant. This can be done by obtaining this information from grant documents, or direct communication with the grantor. We further recommend the SEFA be reviewed for accuracy by an individual not included in the SEFA preparation process. Review should be notated with initials and date. Management’s Response: See Corrective Action Plan
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass-through Entity - Genesee County, Michigan Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared, as it originally included expenditures that were improperly excluded from the SEFA for the year ended June 30, 2022. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated. These revisions related to $136,295 of federal awards expended during the year ended June 30, 2022 that were not reported on the SEFA until the year ended June 30, 2023. These expenditures related to ALN 21.027 (Coronavirus State and Local Fiscal Recovery Funds). This amount did not impact the program type or major program determination for the year ended June 30, 2022. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the City's schedule of expenditures of federal awards for the prior year being understated and the amounts included in the current year expenditures of federal awards prior to audit-identified revisions. The amounts did not impact the program type or major program determination for the year ended June 30, 2022. Recommendation - The City should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The City will implement additional supervisory review of expenditures included on the SEFA.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass-through Entity - Genesee County, Michigan Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared, as it originally included expenditures that were improperly excluded from the SEFA for the year ended June 30, 2022. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated. These revisions related to $136,295 of federal awards expended during the year ended June 30, 2022 that were not reported on the SEFA until the year ended June 30, 2023. These expenditures related to ALN 21.027 (Coronavirus State and Local Fiscal Recovery Funds). This amount did not impact the program type or major program determination for the year ended June 30, 2022. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the City's schedule of expenditures of federal awards for the prior year being understated and the amounts included in the current year expenditures of federal awards prior to audit-identified revisions. The amounts did not impact the program type or major program determination for the year ended June 30, 2022. Recommendation - The City should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The City will implement additional supervisory review of expenditures included on the SEFA.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
Assistance Listing, Federal Agency, and Program Name - 20.507, 20.525, 20.526, U.S. Department of Transportation, Federal Transit Cluster Federal Award Identification Number and Year - All Pass-through Entity - N/A Finding Type - Material weakness and material noncompliance Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Per 2 CFR 200.71(2), for a SEFA prepared on a cash basis, expenditures are the sum of (i) cash disbursements for direct charges for property and services; (ii) the amount of indirect expense charged; (iii) the value of third-party in-kind contributions applied; and (iv) the amount of cash advance payments and payments made to subrecipients. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared in accordance with the Authority’s accounting policy for a cash basis SEFA, as it originally included expenditures that were direct charges for property and services, but cash disbursement had not been made as of June 30, 2023. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated on a cash basis. These revisions related to $2,591,504 of federal expenditures where goods and services had been received as of June 30, 2023 that were originally on the SEFA, but cash disbursement had not been made for these direct charges as of June 30, 2023 and therefore should not have been included in the cash basis SEFA. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively to ensure proper presentation of the SEFA under a cash basis model. This resulted in the Authority's schedule of expenditures of federal awards to be overstated prior to auditor identified revisions. Recommendation - The Authority should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards in the proper period. Views of Responsible Officials and Corrective Action Plan - The SEFA was originally prepared on an accrual basis as has been done in prior years. Due to the ability to use Covid-19 funding for operating expenses, the reporting basis was changed from accrual to cash in FY21-22 without changing internal procedures for creation of the SEFA. This caused the FY22-23 SEFA to be completed on an accrual basis and need to be revised and resubmitted to the auditors. The corrective action has been implemented to revise internal procedures to prepare the SEFA on a cash basis for future fiscal years. This includes the creation of a reconciliation schedule to the financial statements which are prepared on an accrual basis.
2023-003 Internal Control Over Financial Reporting Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan - Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: Significant audit adjustments were required to fairly present the consolidated financial statements and related Schedule of Expenditures of Federal Awards (SEFA). Criteria: According to 2 CFR 200.508 “Auditee Responsibilities” the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200.510 “Financial statements” requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 “Financial management”, the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. When federal expenditures are incurred over $750,000, a Single Audit is required to be performed under Uniform Guidance. Failure to properly record federal expenditures could cause the Academies to not have a Single Audit performed, or have it performed improperly, which would be considered noncompliant with Uniform Guidance. Cause: The impacts of the financial statement audit adjustments are as follows: • Accounts receivable and revenue related to Employee Retention Tax Credits were overstated by $600,000. • Revenues and expenditures related to reimbursement-based federal grants included in testing as a major program were understated $426,863. The Academies did not record certain grant revenues and expenditures for expenditures paid directly by the granting agency on behalf of the Academies. This adjustment impacted the SEFA and financial statements. • Revenue related to Child Nutrition Program funds were overstated $19,150. This adjustment impacted the SEFA and financial statements. • Adjustments to property and equipment resulting in a net increase to net assets of $29,583. • Adjustments to accumulated depreciation resulting in a net decrease in net assets of $54,906. • Adjustments to inter-school payable amounts resulting in a net increase in net assets of $23,015. • Adjustments to accounts payable resulting in a net increase in net assets of $60,179. • Adjustments to due to management company resulting in a net increase in net assets of $45,903. • Adjustments to compensated absences resulting in a net decrease in net assets of $24,391. Effect: The consolidated financial statements and related SEFA required material adjustments in order to be presented fairly. A lack of accounting practices can cause potential misstatements to remain unidentified and cause the financial statements and related schedules to be misleading. Noncompliance with Uniform Guidance may result in a temporary suspension of federal awards. Recommendation: We recommend the Academies implement monthly financial statement closing procedures which capture all relevant information necessary to reconcile accounts to supporting documentation on a timely basis. These procedures should include implementing internal controls over recording and monitoring revenues related to federal awards to ensure accuracy of funds recorded. Views of responsible officials: See views of responsible officials on page 36.
2023-003 Internal Control Over Financial Reporting Title and Assistance Listing Number of the Federal Program: 84.425D COVID-19 - Elementary and Secondary School Emergency Relief Fund; 84.425U COVID-19 - American Rescue plan - Elementary and Secondary School Emergency Relief Fiscal Year Finding Originated: 2023 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Name of Federal Agency: Department of Education Pass-through Agency: Louisiana Department of Education / East Baton Rouge Parish School Board Questioned Costs: No questioned costs reported. Condition: Significant audit adjustments were required to fairly present the consolidated financial statements and related Schedule of Expenditures of Federal Awards (SEFA). Criteria: According to 2 CFR 200.508 “Auditee Responsibilities” the auditee must prepare appropriate financial statements, including the SEFA (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200.510 “Financial statements” requires recipients of Federal funds to prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total Federal awards expended. In addition, as noted in 2 CFR 200.302 “Financial management”, the financial management system of each non-Federal entity must provide for identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received, and records that identify adequately the source and application of funds for federally-funded activities including expenditures. When federal expenditures are incurred over $750,000, a Single Audit is required to be performed under Uniform Guidance. Failure to properly record federal expenditures could cause the Academies to not have a Single Audit performed, or have it performed improperly, which would be considered noncompliant with Uniform Guidance. Cause: The impacts of the financial statement audit adjustments are as follows: • Accounts receivable and revenue related to Employee Retention Tax Credits were overstated by $600,000. • Revenues and expenditures related to reimbursement-based federal grants included in testing as a major program were understated $426,863. The Academies did not record certain grant revenues and expenditures for expenditures paid directly by the granting agency on behalf of the Academies. This adjustment impacted the SEFA and financial statements. • Revenue related to Child Nutrition Program funds were overstated $19,150. This adjustment impacted the SEFA and financial statements. • Adjustments to property and equipment resulting in a net increase to net assets of $29,583. • Adjustments to accumulated depreciation resulting in a net decrease in net assets of $54,906. • Adjustments to inter-school payable amounts resulting in a net increase in net assets of $23,015. • Adjustments to accounts payable resulting in a net increase in net assets of $60,179. • Adjustments to due to management company resulting in a net increase in net assets of $45,903. • Adjustments to compensated absences resulting in a net decrease in net assets of $24,391. Effect: The consolidated financial statements and related SEFA required material adjustments in order to be presented fairly. A lack of accounting practices can cause potential misstatements to remain unidentified and cause the financial statements and related schedules to be misleading. Noncompliance with Uniform Guidance may result in a temporary suspension of federal awards. Recommendation: We recommend the Academies implement monthly financial statement closing procedures which capture all relevant information necessary to reconcile accounts to supporting documentation on a timely basis. These procedures should include implementing internal controls over recording and monitoring revenues related to federal awards to ensure accuracy of funds recorded. Views of responsible officials: See views of responsible officials on page 36.