2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Program: 93.243 - U.S. Department of Health and Human Services. See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of excluding the awards provided by pass-through entities.Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), the Council is required to include all direct and pass-through Federal awards expended during the fiscal year in the SEFA. Condition: During the audit management noted that several pass-through awards totaling $278,811 for the year ended June 30, 2024, had not been included on the SEFA. As a result, management provided a revised SEFA after audit testing had begun. Cause: The Council has not received pass-through awards in prior years and the omission appears to be due to a misunderstanding of the SEFA reporting requirements for pass-through awards. Effect or Potential Effect: The SEFA was missing federal expenditures of $278,811 at the start of the audit. When the SEFA is not accurately prepared, it could have an effect on the auditor's determination of major programs and on the auditor's sample selections. Recommendation: We recommend that the Council enhance its procedures related to the preparation of the SEFA to ensure all required amounts are included. Repeat Finding: This is not a repeat finding.
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Program: 93.243 - U.S. Department of Health and Human Services. See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of excluding the awards provided by pass-through entities.Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), the Council is required to include all direct and pass-through Federal awards expended during the fiscal year in the SEFA. Condition: During the audit management noted that several pass-through awards totaling $278,811 for the year ended June 30, 2024, had not been included on the SEFA. As a result, management provided a revised SEFA after audit testing had begun. Cause: The Council has not received pass-through awards in prior years and the omission appears to be due to a misunderstanding of the SEFA reporting requirements for pass-through awards. Effect or Potential Effect: The SEFA was missing federal expenditures of $278,811 at the start of the audit. When the SEFA is not accurately prepared, it could have an effect on the auditor's determination of major programs and on the auditor's sample selections. Recommendation: We recommend that the Council enhance its procedures related to the preparation of the SEFA to ensure all required amounts are included. Repeat Finding: This is not a repeat finding.
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Program: 93.243 - U.S. Department of Health and Human Services. See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of excluding the awards provided by pass-through entities.Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), the Council is required to include all direct and pass-through Federal awards expended during the fiscal year in the SEFA. Condition: During the audit management noted that several pass-through awards totaling $278,811 for the year ended June 30, 2024, had not been included on the SEFA. As a result, management provided a revised SEFA after audit testing had begun. Cause: The Council has not received pass-through awards in prior years and the omission appears to be due to a misunderstanding of the SEFA reporting requirements for pass-through awards. Effect or Potential Effect: The SEFA was missing federal expenditures of $278,811 at the start of the audit. When the SEFA is not accurately prepared, it could have an effect on the auditor's determination of major programs and on the auditor's sample selections. Recommendation: We recommend that the Council enhance its procedures related to the preparation of the SEFA to ensure all required amounts are included. Repeat Finding: This is not a repeat finding.
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Program: 93.243 - U.S. Department of Health and Human Services. See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of excluding the awards provided by pass-through entities.Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), the Council is required to include all direct and pass-through Federal awards expended during the fiscal year in the SEFA. Condition: During the audit management noted that several pass-through awards totaling $278,811 for the year ended June 30, 2024, had not been included on the SEFA. As a result, management provided a revised SEFA after audit testing had begun. Cause: The Council has not received pass-through awards in prior years and the omission appears to be due to a misunderstanding of the SEFA reporting requirements for pass-through awards. Effect or Potential Effect: The SEFA was missing federal expenditures of $278,811 at the start of the audit. When the SEFA is not accurately prepared, it could have an effect on the auditor's determination of major programs and on the auditor's sample selections. Recommendation: We recommend that the Council enhance its procedures related to the preparation of the SEFA to ensure all required amounts are included. Repeat Finding: This is not a repeat finding.
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Program: 93.243 - U.S. Department of Health and Human Services. See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of excluding the awards provided by pass-through entities.Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), the Council is required to include all direct and pass-through Federal awards expended during the fiscal year in the SEFA. Condition: During the audit management noted that several pass-through awards totaling $278,811 for the year ended June 30, 2024, had not been included on the SEFA. As a result, management provided a revised SEFA after audit testing had begun. Cause: The Council has not received pass-through awards in prior years and the omission appears to be due to a misunderstanding of the SEFA reporting requirements for pass-through awards. Effect or Potential Effect: The SEFA was missing federal expenditures of $278,811 at the start of the audit. When the SEFA is not accurately prepared, it could have an effect on the auditor's determination of major programs and on the auditor's sample selections. Recommendation: We recommend that the Council enhance its procedures related to the preparation of the SEFA to ensure all required amounts are included. Repeat Finding: This is not a repeat finding.
Criteria: 2 CFR 200.510 (b) requires an entity to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 (a), which states that determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Condition: During the FY2024 Uniform Guidance audit, we noted that there were $1.2 million of funds from this program that had underlying transaction dates from FY2023. These expenditures were not reported on the FY2023 SEFA but rather were included in the FY2024 SEFA. The omission in the prior year did not result in a change to the major program determination for the 2023 or 2024 audits. Cause: In April 2023, Drexel received a subaward for the SNAP Cluster and a new active fund account was created in the accounting system to track expenses after the subaward was signed. This was set up as a new active award in the system, however there was already an existing advance fund account set up in pre-award status prior to the subaward being executed. The FY2023 expenditures were recorded in pre-award fund account and not the new active fund account. Management included the new active fund account in the population for FY2023 SEFA reporting which had no expenditures and excluded the pre-award fund account with the $1.2 million of charges. This accounting for the FY2023 expenditures was corrected in July 2023 (FY2024) but not in time for SEFA reporting purposes. Effect: FY2023 SEFA expenditures for the SNAP cluster were understated by $1.2 million. This amount has been reported in the FY2024 SEFA. Questioned Costs: None; Recommendation: Management should enhance the control in place to perform a more precise review of award status and other reconciling items when preparing and reviewing the SEFA reconciliation to the financial statements. Management's View and Corrective Action Plan: Management agrees with the finding. Refer to the Management Corrective Action Plan on page 81.
Criteria: 2 CFR 200.510 (b) requires an entity to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 (a), which states that determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Condition: During the FY2024 Uniform Guidance audit, we noted that there were $1.2 million of funds from this program that had underlying transaction dates from FY2023. These expenditures were not reported on the FY2023 SEFA but rather were included in the FY2024 SEFA. The omission in the prior year did not result in a change to the major program determination for the 2023 or 2024 audits. Cause: In April 2023, Drexel received a subaward for the SNAP Cluster and a new active fund account was created in the accounting system to track expenses after the subaward was signed. This was set up as a new active award in the system, however there was already an existing advance fund account set up in pre-award status prior to the subaward being executed. The FY2023 expenditures were recorded in pre-award fund account and not the new active fund account. Management included the new active fund account in the population for FY2023 SEFA reporting which had no expenditures and excluded the pre-award fund account with the $1.2 million of charges. This accounting for the FY2023 expenditures was corrected in July 2023 (FY2024) but not in time for SEFA reporting purposes. Effect: FY2023 SEFA expenditures for the SNAP cluster were understated by $1.2 million. This amount has been reported in the FY2024 SEFA. Questioned Costs: None; Recommendation: Management should enhance the control in place to perform a more precise review of award status and other reconciling items when preparing and reviewing the SEFA reconciliation to the financial statements. Management's View and Corrective Action Plan: Management agrees with the finding. Refer to the Management Corrective Action Plan on page 81.
Criteria: 2 CFR 200.510 (b) requires an entity to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The schedule must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 (a), which states that determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Condition: During the FY2024 Uniform Guidance audit, we noted that there were $1.2 million of funds from this program that had underlying transaction dates from FY2023. These expenditures were not reported on the FY2023 SEFA but rather were included in the FY2024 SEFA. The omission in the prior year did not result in a change to the major program determination for the 2023 or 2024 audits. Cause: In April 2023, Drexel received a subaward for the SNAP Cluster and a new active fund account was created in the accounting system to track expenses after the subaward was signed. This was set up as a new active award in the system, however there was already an existing advance fund account set up in pre-award status prior to the subaward being executed. The FY2023 expenditures were recorded in pre-award fund account and not the new active fund account. Management included the new active fund account in the population for FY2023 SEFA reporting which had no expenditures and excluded the pre-award fund account with the $1.2 million of charges. This accounting for the FY2023 expenditures was corrected in July 2023 (FY2024) but not in time for SEFA reporting purposes. Effect: FY2023 SEFA expenditures for the SNAP cluster were understated by $1.2 million. This amount has been reported in the FY2024 SEFA. Questioned Costs: None; Recommendation: Management should enhance the control in place to perform a more precise review of award status and other reconciling items when preparing and reviewing the SEFA reconciliation to the financial statements. Management's View and Corrective Action Plan: Management agrees with the finding. Refer to the Management Corrective Action Plan on page 81.
Finding 2024-004 U.S. Department of Treasury Federal Award Year Ending June 30, 2024 COVID-19: Coronavirus State and Local Fiscal Recovery Funds Lack of internal controls over the preparation of the Schedule of Expenditures of Federal Awards Criteria: In accordance with 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Condition: The Schedule of Expenditures for Federal Awards for the year ended June 30, 2024, was initially overstated by $529,900 due to an improper subrecipient verses beneficiary determination for a grant. Cause: While this original grant agreement specified that the Foundation was a subrecipient, the Foundation did not timely review a 2024 grant amendment or obtain further correspondence from the granter that updated the initial subrecipient determination to now identify the Foundation as a beneficiary, resulting in the removal of $529,900 from the Schedule of Expenditures for Federal Awards. Effect or potential effect: Improper reporting of federal expenditures results in errors on the Schedule of Expenditures for Federal Awards and can lead to inaccurate major program determination. In this instance, the error did result in an update to the major program determination. Questioned costs: None. Context: During the audit, we reviewed a July 2024 grant amendment from the grantor that removed a number of the original grant requirements and reclassified the Foundation as a “grantee.” Upon further inquiry with the grantor, it was discovered that the Foundation is no longer considered a subrecipient. Thus, the Foundation is a beneficiary, which resulted in the removal of incurred costs of $529,900 from the Schedule of Expenditures of Federal Awards. Recommendation: To ensure accuracy of the Schedule of Expenditures of Federal Awards, the Foundation should improve the processes and controls around timely identification of potential federal awards, which includes enhancing the review of any grant amendments and timely contacting passthrough entities to verify potential updates to the subrecipient verses beneficiary determination. Views of responsible officials of the auditee: The Foundation agrees with the above finding, and its response is included in the corrective action plan.
Assistance Listing Number, Federal Agency, and Program Name 84.425D, U.S. Department of Education, Education Stabilization Fund COVID 19 ESSER II Formula Fund II and 98c Learning Loss, and 84.425U, COVID 19 ESSER Education Equity Fund III Federal Award Identification Number and Year 213712, 213782, 213713, 2023 Pass through Entity Michigan Department of Education Finding Type Material weakness Criteria Per 2 CFR 200.510(b) and Section 500.508(b) of Title 2, Subtitle A, Chapter II, Part 200, Subpart F, auditees must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with Section 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition The schedule of expenditures of federal awards (SEFA) contained inaccuracies and incomplete information that was identified during the audit. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context Multiple grants were presented inaccurately from the SEFA prepared by management in federal payments received and expenditures reported, which was identified by the auditor during the annual audit and subsequently corrected on the SEFA. The inaccuracies was a combination of amounts recorded in the School District's ledger that were incorrectly reflected on the SEFA, and amounts that required adjustment in the School District's ledger and also on the SEFA that was identified in the course of the audit. Cause and Effect The School District did not have sufficient controls in place to properly reconcile federal revenue to the federal expenditures reflected on the SEFA to validate that all federal grants awarded and expended were included in the SEFA and presented accurately. Recommendation The School District should implement a process to ensure that the SEFA is prepared timely and that all grant expenditures are included accurately. Views of Responsible Officials and Corrective Action Plan The School District will develop a SEFA checklist to help ensure all federal expenditures are properly reported. Additional processes will be put in place by management to review the SEFA in advance of the annual audit to effectively meet audit report timelines and help ensure completeness, validity, and accuracy of the final SEFA reporting.
Assistance Listing Number, Federal Agency, and Program Name 84.425D, U.S. Department of Education, Education Stabilization Fund COVID 19 ESSER II Formula Fund II and 98c Learning Loss, and 84.425U, COVID 19 ESSER Education Equity Fund III Federal Award Identification Number and Year 213712, 213782, 213713, 2023 Pass through Entity Michigan Department of Education Finding Type Material weakness Criteria Per 2 CFR 200.510(b) and Section 500.508(b) of Title 2, Subtitle A, Chapter II, Part 200, Subpart F, auditees must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with Section 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition The schedule of expenditures of federal awards (SEFA) contained inaccuracies and incomplete information that was identified during the audit. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context Multiple grants were presented inaccurately from the SEFA prepared by management in federal payments received and expenditures reported, which was identified by the auditor during the annual audit and subsequently corrected on the SEFA. The inaccuracies was a combination of amounts recorded in the School District's ledger that were incorrectly reflected on the SEFA, and amounts that required adjustment in the School District's ledger and also on the SEFA that was identified in the course of the audit. Cause and Effect The School District did not have sufficient controls in place to properly reconcile federal revenue to the federal expenditures reflected on the SEFA to validate that all federal grants awarded and expended were included in the SEFA and presented accurately. Recommendation The School District should implement a process to ensure that the SEFA is prepared timely and that all grant expenditures are included accurately. Views of Responsible Officials and Corrective Action Plan The School District will develop a SEFA checklist to help ensure all federal expenditures are properly reported. Additional processes will be put in place by management to review the SEFA in advance of the annual audit to effectively meet audit report timelines and help ensure completeness, validity, and accuracy of the final SEFA reporting.
Assistance Listing Number, Federal Agency, and Program Name 84.425D, U.S. Department of Education, Education Stabilization Fund COVID 19 ESSER II Formula Fund II and 98c Learning Loss, and 84.425U, COVID 19 ESSER Education Equity Fund III Federal Award Identification Number and Year 213712, 213782, 213713, 2023 Pass through Entity Michigan Department of Education Finding Type Material weakness Criteria Per 2 CFR 200.510(b) and Section 500.508(b) of Title 2, Subtitle A, Chapter II, Part 200, Subpart F, auditees must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with Section 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition The schedule of expenditures of federal awards (SEFA) contained inaccuracies and incomplete information that was identified during the audit. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context Multiple grants were presented inaccurately from the SEFA prepared by management in federal payments received and expenditures reported, which was identified by the auditor during the annual audit and subsequently corrected on the SEFA. The inaccuracies was a combination of amounts recorded in the School District's ledger that were incorrectly reflected on the SEFA, and amounts that required adjustment in the School District's ledger and also on the SEFA that was identified in the course of the audit. Cause and Effect The School District did not have sufficient controls in place to properly reconcile federal revenue to the federal expenditures reflected on the SEFA to validate that all federal grants awarded and expended were included in the SEFA and presented accurately. Recommendation The School District should implement a process to ensure that the SEFA is prepared timely and that all grant expenditures are included accurately. Views of Responsible Officials and Corrective Action Plan The School District will develop a SEFA checklist to help ensure all federal expenditures are properly reported. Additional processes will be put in place by management to review the SEFA in advance of the annual audit to effectively meet audit report timelines and help ensure completeness, validity, and accuracy of the final SEFA reporting.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires that the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires that the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires that the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires that the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
Item 2024-007: Schedule of expenditures of federal awards presentation Federal Agency: U.S. Department of Housing and Urban Development; U.S. Department of Treasury Program: HOME Investment Partnerships Program (ALN 14.239); Housing Trust Fund (ALN 14.275); COVID-19 - Emergency Rental Assistance (ALN 21.023); Homeowner Assistance Fund Program (ALN 21.026) Pass-through Entity: None Federal Assistance Identification Number or Pass-Through Number: None Federal Award Year: Year ended June 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: The Agency is required to comply with 2 CFR section 200.510(b) which requires that the auditee must prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR section 200.502. Further, the Agency is required to comply with 2 CFR 200.512 which requires that the information included in the reporting package is accurate and complete. Condition: We noted the following errors in the original SEFA we received for the audit: Loans provided under the HOME Investment Partnerships Program (ALN 14.239) were understated by $8,641,271 Loans provided under the Housing Trust Fund (ALN 14.275) were understated by $4,466,122 Expenditures under the Emergency Rental Assistance Program (ALN 21.023) were understated by $382,418 Expenditures under the COVID-19—Homeowner Assistance Fund Program (ALN 21.026) are overstated $403,795 Expenditures under the COVID-19—HOME Investment Partnerships Program, American Rescue Plan (ALN 14.239) are overstated $99,928 Cause: There was a breakdown in the Agency’s procedures related to preparation and review of the SEFA. The Agency’s procedures for preparing the SEFA did not account for classification of certain loans subject to continuing compliance requirements. The errors of $8,641,271 related to ALN 14.239 and $4,466,122 related to ALN 14.275 were caused by the Agency not properly identifying certain loans required to be included on the SEFA. The error of $382,418 related to ALN 21.023 was caused by the Agency reducing a subscription software disbursement by the portion of the disbursement related to payments on the subscription liability. The errors of $403,795 and $99,928 related to ALN 21.026 and ALN 14.239, respectively, were caused by the Agency charging certain direct and indirect costs from fiscal year 2021, 2022, and 2023 to the programs in fiscal year 2024. Effect: The Agency adjusted its fiscal year 2024 SEFA by $13,489,811 for the errors related to ALN 14.239, 14.275, and 21.023. The expenditures for ALN 21.026 and 14.239 are overstated $403,795 and $99,928, respectively. Questioned Costs: None Context: The Agency’s expenditures of federal awards reported on the SEFA were understated by $13,489,811 which was corrected during the audit. The Agency’s expenditures of federal awards reported on the SEFA for ALN 21.026 and ALN 14.239 are overstated $403,795 and $99,928, respectively, which the Agency did not correct. Total expenditures reported on the SEFA, as adjusted for this matter, are $422,678,239. Repeat Finding?: No Recommendation: We recommend that the Agency review and strengthen its processes and controls over the preparation of the SEFA. Views of responsible officials of the auditee: We agree with the above finding and our response is included in the corrective action plan.
2024-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Programs: Department of Housing and Urban Development Federal Assistance Listing Number: 14.218 Federal Assistance Listing Name: Community Development Block Grants/Entitlement Grants Grant Number: CV-2-8 Department of Health and Human Services Federal Assistance Listing Number: 93.566 Federal Assistance Listing Name: Refugee and Entrant Assistance - State-Administered Programs Grant Number: JA-FSA-RSS-2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
2024-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Programs: Department of Housing and Urban Development Federal Assistance Listing Number: 14.218 Federal Assistance Listing Name: Community Development Block Grants/Entitlement Grants Grant Number: CV-2-8 Department of Health and Human Services Federal Assistance Listing Number: 93.566 Federal Assistance Listing Name: Refugee and Entrant Assistance - State-Administered Programs Grant Number: JA-FSA-RSS-2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
2024-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Programs: Department of Housing and Urban Development Federal Assistance Listing Number: 14.218 Federal Assistance Listing Name: Community Development Block Grants/Entitlement Grants Grant Number: CV-2-8 Department of Health and Human Services Federal Assistance Listing Number: 93.566 Federal Assistance Listing Name: Refugee and Entrant Assistance - State-Administered Programs Grant Number: JA-FSA-RSS-2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of the corrections to the SEFA, which are described in Finding 2024-001.Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), Educare is required to include all direct and passthrough Federal awards expended during the fiscal year in the SEFA. Condition: After the start of the audit, management noted that a pass-through Federal award had been excluded from the SEFA. As a result, the SEFA was understated by $253,457 for the year ended June 30, 2024. In addition, after the start of the audit, we noted that the SEFA included both Federal and non-Federal expenditures for one Federal award. Instead of reporting expenditures based on agreed upon units of service as the appropriate measure of expenditure for the award, the SEFA had been prepared using actual costs expended by Educare. As a result, the SEFA was overstated by $100,517 for the year ended June 30, 2024. Management provided a revised SEFA to correct these two items after the major program had been determined and audit testing had already begun. However, the corrections to the SEFA did not change the major program determination and no questioned costs were noted. Cause: The pass-through Federal award was a new source of funding for Educare, which is why the expenditures were not originally included on the SEFA. In the prior year, the expenditures related to the units of service award were included on the SEFA based on the amount of Federal funds received, which was equal to units of service provided. However, in the current year, the amount reported on the SEFA was based on total expenditures including both the Federal and non-Federal portions of the expenditures. Effect or Potential Effect: The SEFA provided at the start of the audit was understated by $152,940 in the aggregate and, as a result, it did not accurately report Educare’s Federal expenditures. When the SEFA is not accurately prepared, this could have an effect on the determination of the major programs. Recommendation: We recommend that Educare enhance its procedures related to the preparation of the SEFA to ensure that all required amounts are either included or excluded, depending upon the terms of the grant award. We also recommend that Educare document the basis for the expenditures related to each award, such as cost reimbursement or units of service. Identification as a Repeat Finding: Not applicable.
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of the corrections to the SEFA, which are described in Finding 2024-001.Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), Educare is required to include all direct and passthrough Federal awards expended during the fiscal year in the SEFA. Condition: After the start of the audit, management noted that a pass-through Federal award had been excluded from the SEFA. As a result, the SEFA was understated by $253,457 for the year ended June 30, 2024. In addition, after the start of the audit, we noted that the SEFA included both Federal and non-Federal expenditures for one Federal award. Instead of reporting expenditures based on agreed upon units of service as the appropriate measure of expenditure for the award, the SEFA had been prepared using actual costs expended by Educare. As a result, the SEFA was overstated by $100,517 for the year ended June 30, 2024. Management provided a revised SEFA to correct these two items after the major program had been determined and audit testing had already begun. However, the corrections to the SEFA did not change the major program determination and no questioned costs were noted. Cause: The pass-through Federal award was a new source of funding for Educare, which is why the expenditures were not originally included on the SEFA. In the prior year, the expenditures related to the units of service award were included on the SEFA based on the amount of Federal funds received, which was equal to units of service provided. However, in the current year, the amount reported on the SEFA was based on total expenditures including both the Federal and non-Federal portions of the expenditures. Effect or Potential Effect: The SEFA provided at the start of the audit was understated by $152,940 in the aggregate and, as a result, it did not accurately report Educare’s Federal expenditures. When the SEFA is not accurately prepared, this could have an effect on the determination of the major programs. Recommendation: We recommend that Educare enhance its procedures related to the preparation of the SEFA to ensure that all required amounts are either included or excluded, depending upon the terms of the grant award. We also recommend that Educare document the basis for the expenditures related to each award, such as cost reimbursement or units of service. Identification as a Repeat Finding: Not applicable.
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of the corrections to the SEFA, which are described in Finding 2024-001.Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), Educare is required to include all direct and passthrough Federal awards expended during the fiscal year in the SEFA. Condition: After the start of the audit, management noted that a pass-through Federal award had been excluded from the SEFA. As a result, the SEFA was understated by $253,457 for the year ended June 30, 2024. In addition, after the start of the audit, we noted that the SEFA included both Federal and non-Federal expenditures for one Federal award. Instead of reporting expenditures based on agreed upon units of service as the appropriate measure of expenditure for the award, the SEFA had been prepared using actual costs expended by Educare. As a result, the SEFA was overstated by $100,517 for the year ended June 30, 2024. Management provided a revised SEFA to correct these two items after the major program had been determined and audit testing had already begun. However, the corrections to the SEFA did not change the major program determination and no questioned costs were noted. Cause: The pass-through Federal award was a new source of funding for Educare, which is why the expenditures were not originally included on the SEFA. In the prior year, the expenditures related to the units of service award were included on the SEFA based on the amount of Federal funds received, which was equal to units of service provided. However, in the current year, the amount reported on the SEFA was based on total expenditures including both the Federal and non-Federal portions of the expenditures. Effect or Potential Effect: The SEFA provided at the start of the audit was understated by $152,940 in the aggregate and, as a result, it did not accurately report Educare’s Federal expenditures. When the SEFA is not accurately prepared, this could have an effect on the determination of the major programs. Recommendation: We recommend that Educare enhance its procedures related to the preparation of the SEFA to ensure that all required amounts are either included or excluded, depending upon the terms of the grant award. We also recommend that Educare document the basis for the expenditures related to each award, such as cost reimbursement or units of service. Identification as a Repeat Finding: Not applicable.
Finding 2024-001, Material Weakness, U.S. DEPARTMENT OF AGRICULTURE Child Nutrition Cluster 10.555 and 10.553, U.S. DEPARTMENT OF EDUCATION Education Stabilization Fund 84.425U Criteria: According to 2CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the financial statements that includes all amounts spent on federal programs subject to single audit during the reporting period. Condition: The client prepared Schedule of Expenditures of Federal Awards (SEFA) understated Child Nutrition Cluster 10.555/10.553 expenses by $19,651 and understated Education Stabilization Fund 84.425U expenditures by $81,428. Lastly, the client prepared SEFA overstated federal expenditures by $69,851 for a federal award that is not subject to single audit requirements. Cause: The School reported 2024 program revenue rather than expenditures for the Child Nutrition Cluster 10.555/10.553. The School's review procedures did not catch a federal award that was excluded from the SEFA, nor a federal award that was included in the SEFA that should not have been. Effect: Audit adjustments were made to increase the Child Nutrition Cluster 10.555/10.553 expenses by $19,651 and increase the Education Stabilization Fund 84.425U expenditures by $81,428. Lastly, and audit adjustment was made to reduce federal expenditures by $69,851 for a federal award that is not subject to single audit requirements. Questioned Costs: None Repeat Finding: Repeat of finding 2023-001. Recommendation: We recommend the School prepare the SEFA utilizing federal award expenditures, rather than revenue. In addition, we recommend that the School's SEFA review procedures include a comparison to the prior year audited SEFA for awards that may have been excluded. Lastly, we recommend that the School research each new federal award on SAM.GOV to determine whether single audit requirements apply. View of responsible officials: See attached corrective action plan.
Finding 2024-001, Material Weakness, U.S. DEPARTMENT OF AGRICULTURE Child Nutrition Cluster 10.555 and 10.553, U.S. DEPARTMENT OF EDUCATION Education Stabilization Fund 84.425U Criteria: According to 2CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the financial statements that includes all amounts spent on federal programs subject to single audit during the reporting period. Condition: The client prepared Schedule of Expenditures of Federal Awards (SEFA) understated Child Nutrition Cluster 10.555/10.553 expenses by $19,651 and understated Education Stabilization Fund 84.425U expenditures by $81,428. Lastly, the client prepared SEFA overstated federal expenditures by $69,851 for a federal award that is not subject to single audit requirements. Cause: The School reported 2024 program revenue rather than expenditures for the Child Nutrition Cluster 10.555/10.553. The School's review procedures did not catch a federal award that was excluded from the SEFA, nor a federal award that was included in the SEFA that should not have been. Effect: Audit adjustments were made to increase the Child Nutrition Cluster 10.555/10.553 expenses by $19,651 and increase the Education Stabilization Fund 84.425U expenditures by $81,428. Lastly, and audit adjustment was made to reduce federal expenditures by $69,851 for a federal award that is not subject to single audit requirements. Questioned Costs: None Repeat Finding: Repeat of finding 2023-001. Recommendation: We recommend the School prepare the SEFA utilizing federal award expenditures, rather than revenue. In addition, we recommend that the School's SEFA review procedures include a comparison to the prior year audited SEFA for awards that may have been excluded. Lastly, we recommend that the School research each new federal award on SAM.GOV to determine whether single audit requirements apply. View of responsible officials: See attached corrective action plan.
Finding 2024-001, Material Weakness, U.S. DEPARTMENT OF AGRICULTURE Child Nutrition Cluster 10.555 and 10.553, U.S. DEPARTMENT OF EDUCATION Education Stabilization Fund 84.425U Criteria: According to 2CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the financial statements that includes all amounts spent on federal programs subject to single audit during the reporting period. Condition: The client prepared Schedule of Expenditures of Federal Awards (SEFA) understated Child Nutrition Cluster 10.555/10.553 expenses by $19,651 and understated Education Stabilization Fund 84.425U expenditures by $81,428. Lastly, the client prepared SEFA overstated federal expenditures by $69,851 for a federal award that is not subject to single audit requirements. Cause: The School reported 2024 program revenue rather than expenditures for the Child Nutrition Cluster 10.555/10.553. The School's review procedures did not catch a federal award that was excluded from the SEFA, nor a federal award that was included in the SEFA that should not have been. Effect: Audit adjustments were made to increase the Child Nutrition Cluster 10.555/10.553 expenses by $19,651 and increase the Education Stabilization Fund 84.425U expenditures by $81,428. Lastly, and audit adjustment was made to reduce federal expenditures by $69,851 for a federal award that is not subject to single audit requirements. Questioned Costs: None Repeat Finding: Repeat of finding 2023-001. Recommendation: We recommend the School prepare the SEFA utilizing federal award expenditures, rather than revenue. In addition, we recommend that the School's SEFA review procedures include a comparison to the prior year audited SEFA for awards that may have been excluded. Lastly, we recommend that the School research each new federal award on SAM.GOV to determine whether single audit requirements apply. View of responsible officials: See attached corrective action plan.
Finding 2024-00 – Preparation of Schedule of Expenditures of Federal Awards Federal Agency: United States Department of Health and Human Services Federal Program Name: Foster Care Title IV-E Assistance Listing Number: 93.658 Pass-Through Agency: Pennsylvania Department of Human Services Award Period: 7/1/2023 – 6/30/2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.510(a) states the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements. The schedule must include the total federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, the Organization receives funding from various counties across the state of Pennsylvania which consists of commingled federal, state, and local assistance with contract terms that stipulate it is the contractor’s responsibility to solicit the counties for purposes of determining the source of funding provided. Condition and Context: The expenditures included on the schedule of expenditures of federal awards (Schedule) initially prepared by the Organization included expenditures of state and local assistance. Questioned Costs: $-0- Cause: The Organization did not perform their responsibilities under the contract terms, which state it is their responsibility to solicit the counties for purposes of determining the source of funding provided during the fiscal year. Additionally, the Organization did not have adequate policies and procedures in place for accurately determining the breakdown of the commingled assistance received. Effect: The Schedule prepared by the Organization did not accurately present the federal awards expended during the fiscal year. Repeat finding: No Recommendation: We recommend the following: The Organization should establish policies and procedures to understand and ensure compliance with the Organization’s contractual obligations. The Organization should create and implement procedures to timely and accurately determine the source of funding received through various county contracts. The Organization should implement review procedures to ensure the Schedule is complete, accurate and prepared in accordance with the requirements set forth within 2 CFR 200.510. View of Responsible Officials: Management agrees with the finding and will take the necessary corrective actions.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding 2024-004: Schedule of Expenditures of Federal Awards (SEFA) Reporting Program: COVID-19: Coronavirus State and Local Fiscal Recovery Funds (ALN 21.027) Federal agency: U.S. Department of the Treasury Federal Award Year: Year ended June 30, 2024 Type of finding: Material weakness Criteria: 2 CFR 200.510(b) requires that “The auditee must prepare a schedule of expenditures of Federal awards (the “schedule”) for the period covered by the auditee’s financial statements, which must include the total Federal awards expended as determined in accordance with section 200.502. Condition: While performing our audit procedures, we noted that CAFB included a $5 million grant from Fairfax County on their SEFA even though CABF is considered a beneficiary related to this grant. Cause: While the Organization recognized they were considered a beneficiary, they believed it was more conservative to include the grant on their SEFA. Effect: The SEFA was overstated by $5 million. Context: An error in the amount of approximately $5 million was identified on the SEFA with total federal expenditures of approximately $46 million. Questioned costs: None Repeat finding: No Recommendation: We recommend that CAFB strengthen its controls over the preparation of the SEFA and consult directly with grantors if there are questions related to whether a grant should be included on the SEFA. Views of responsible officials: CAFB does not agree with the finding as CAFB performed its own research suggesting exclusion of the aforementioned award and included it on the SEFA after consultation with RSM. RSM Response: RSM cannot be part of CAFB’s internal control structure and suggests in the future they consult directly with grantors if there are questions related to whether a grant should be included on the SEFA.
Finding Number: 2024‐001 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Emergency Connectivity Fund 32.009 ECF202208394 $141,445 Education Stabilization Fund 84.425 S425U210038 141,445 Federal Agencies: Department of Education and USAC Pass‐Through Agencies: Arizona Department of Education and USAC Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Management is responsible for establishing and maintaining internal controls over its accounting records. Further, in accordance with 2 CFR 200.510, the District is responsible for the design and implementation of controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) each fiscal year. Additionally, 2 CFR 200.303 requires the District establish and maintain internal control over the federal awards that provides reasonable assurance that the District is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition The District was awarded several new Federal grants in response to the COVID‐19 pandemic, which made proper preparation of the SEFA challenging and the District failed to include the new grant on the fiscal year 2022 SEFA. The District also submitted the same expenditures for reimbursement for two federal programs. Cause The District did not account for the Emergency Connectivity Fund (ECF) properly as the program was unique and not part of the District’s normal federal program operations. It was not known that the program was subject to Single Audit. In addition, there was a lack of financial oversight of the ECF grant application submitted by the Technology Department during fiscal year 2022. Effect The District received reimbursements for two federal grants, one for the Education Stabilization Fund in fiscal year 2022 and the other for the ECF grant in fiscal year 2024, for expenditures totaling $141,445. In addition, the fiscal year 2022 SEFA was incorrect as the ECF expenditures were not included on the SEFA; however, it was determined the error did not have an effect on the selection of major federal programs. Context During fiscal year 2021‐22, the District applied for and was approved for funding under the Universal Service Company (USAC)'s Emergency Connectivity Fund (ECF). The District, in conjunction with its consultant, submitted expenditures from two purchase orders to USAC's ECF for purchases made in fiscal year 2021‐22, one of which was paid for and previously reimbursed under the Education Stabilization Fund. The District received the USAC ECF reimbursement in fiscal year 2023‐24. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure all federal programs are properly reviewed prior to submitting any applications or expenditures for reimbursements. The expenditures should be included in the SEFA for the fiscal year in which the expenditures occurred. In addition, the District should strengthen controls over the accounting records to ensure reimbursements are not submitted for multiple programs. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2024‐001 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Emergency Connectivity Fund 32.009 ECF202208394 $141,445 Education Stabilization Fund 84.425 S425U210038 141,445 Federal Agencies: Department of Education and USAC Pass‐Through Agencies: Arizona Department of Education and USAC Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Management is responsible for establishing and maintaining internal controls over its accounting records. Further, in accordance with 2 CFR 200.510, the District is responsible for the design and implementation of controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) each fiscal year. Additionally, 2 CFR 200.303 requires the District establish and maintain internal control over the federal awards that provides reasonable assurance that the District is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards. Condition The District was awarded several new Federal grants in response to the COVID‐19 pandemic, which made proper preparation of the SEFA challenging and the District failed to include the new grant on the fiscal year 2022 SEFA. The District also submitted the same expenditures for reimbursement for two federal programs. Cause The District did not account for the Emergency Connectivity Fund (ECF) properly as the program was unique and not part of the District’s normal federal program operations. It was not known that the program was subject to Single Audit. In addition, there was a lack of financial oversight of the ECF grant application submitted by the Technology Department during fiscal year 2022. Effect The District received reimbursements for two federal grants, one for the Education Stabilization Fund in fiscal year 2022 and the other for the ECF grant in fiscal year 2024, for expenditures totaling $141,445. In addition, the fiscal year 2022 SEFA was incorrect as the ECF expenditures were not included on the SEFA; however, it was determined the error did not have an effect on the selection of major federal programs. Context During fiscal year 2021‐22, the District applied for and was approved for funding under the Universal Service Company (USAC)'s Emergency Connectivity Fund (ECF). The District, in conjunction with its consultant, submitted expenditures from two purchase orders to USAC's ECF for purchases made in fiscal year 2021‐22, one of which was paid for and previously reimbursed under the Education Stabilization Fund. The District received the USAC ECF reimbursement in fiscal year 2023‐24. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should ensure all federal programs are properly reviewed prior to submitting any applications or expenditures for reimbursements. The expenditures should be included in the SEFA for the fiscal year in which the expenditures occurred. In addition, the District should strengthen controls over the accounting records to ensure reimbursements are not submitted for multiple programs. Views of Responsible Officials See Corrective Action Plan.
Condition: As a result of our audit procedures and review of the SEFA, we proposed multiple adjustments to the SEFA, which resulted in a material change in total expenditures of federal awards. Criteria: 2 CFR Part 200 Cause: Oversight by management, and there was not an independent review of the SEFA prepared by someone other than the preparer. Effect: Audit adjustments were required for the SEFA to be materially correct in accordance with 2 CFR Part 200.510(b). Recommendation: We recommend that prior to sending the SEFA to the auditors, management performed a detailed review of the SEFA, general ledger, and monthly invoicing spreadsheets for each federal program included on the SEFA, to ensure the reports are consistent and the SEFA is complete and accurate. If possible, this review should be completed by an individual who did not prepare the SEFA and who has the appropriate skills, knowledge and experience of accounting and reporting in the nonprofit industry. View of Responsible Official and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Federal Program reported incorrectly on the Schedule of Expenditures of Federal Awards (“SEFA”) and errors noted in written off loans Federal Program: Assistance Listing Number (“ALN”) 11.307 Economic Adjustment Assistance Name of Federal Agency: U.S. Department of Commerce Award Identification Number and Year: 04-79-07547 and Year 2020 Name of pass-through entity: N/A COVID Identification: Yes Amount of Questioned Costs: $1,571,578 Criteria: 2CFR 200.510 states the requirements for SEFA reporting. The Louisville Metropolitan Business Development Corporation Policy and Procedures Handbook provides the order of priority for loan proceeds to be applied. Condition: The federal expenditure amount for ALN 11.307 was reported incorrectly on the draft SEFA provided by Louisville Metro. Also, the information in the loan system was incorrect for two written off loans. Effect: SEFA was mis-stated for ALN 11.307. Semi-annual report had incorrect information on chart. Cause: Lack of communication between Metro grants personnel and Metro OMB grants division. Also error in loan system. Questioned Costs: Total questioned costs is $1,571,578 (SEFA error of $1,570,592, loan error of $864, and loan error of $122). Context: Total federal expenditures on the SEFA required an adjustment of $1,570,592. The total written off loan amounts for FY 2024 were $343,439. Recommendation: We recommend communication be improved and management periodically reconcile the loan system to detect errors. Management’s response: Management agrees with the finding and will develop a plan to insure such differences do not reoccur in the future.
Finding 2024-002: Reporting - Schedule of Expenditures of Federal Awards Grantor: National Institute of Health Program: Research and Development Assistance Listing #: 93.352 Title: A Washington University Gnotobiotic Research, Education and Transgenic Center for modeling genetic and environmental effectors of disease pathogenesis Award Year: 9/20/2019-5/31/2024 Award #: 1C06OD02830601 Criteria: 2 CFR 200.510 which requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements that includes the total federal awards expenses. Condition: Expenditures totaling $2,013,944 related to a construction grant were incurred in prior fiscal years but recorded in the SEFA during the current fiscal year. Cause: The management of the construction grant activity resided in a department other than Sponsored Projects Accounting. Therefore, the grant was excluded from the normal processes for capturing activity in the SEFA. Effect: The current year SEFA is overstated by amounts that should have been recorded in the SEFA in prior years. Questioned Costs: There are no questioned costs as amounts sampled from the expenditures recorded in the current year SEFA were deemed allowable. Recommendation: Management should enhance its coordination and review procedures for special purpose grants managed outside of Sponsored Projects Accounting to ensure that amounts associated with such grants are completely and accurately reported in the SEFA. Management's View and Corrective Action Plan: Please refer to management's views and corrective action plan.
Schedule of Expenditures of Federal Awards (SEFA) Preparation Criteria or Specific Requirement: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Condition: The SEFA provided for the audit contained errors including the exclusion of federally funded grants, spending reported under incorrect assistance listing numbers, and reporting private contributions as federal grants. The errors were identified and corrected during the audit. Effect: Errors in the preparation of the SEFA schedule could lead funding agencies to misinterpret the level of spending for a particular program for the period under audit. Additionally, the identification of major federal award programs chosen for specific compliance testing could be erroneous, depending on the misstatement in the total amount of federal expenditures for the year. Cause: The SEFA report was not reviewed before it was provided for the audit. Repeat: No Auditor's Recommendations: The SEFA report and supporting documents should be reviewed by an individual that is knowledgeable about Community Council of Idaho, Inc.'s programs to help ensure accurate reporting of federal expenditures in the SEFA report. View of Responsible Officials: Community Council of Idaho, Inc. agrees with the audit finding and has written a corrective action plan. Audit finding 2024-001 represenets a significant deficiency in internal control over compliance related to reporting for Community Council of Idaho, Inc.'s major federal programs. Federal Program Information: Funding agency: U.S. Department of Human Services Title: Head Start Cluster AL number: 93.600 Award number and period: 90CM09845-04 05/01/2023 - 04/30/2024 90CM09845-05 05/01/2024 - 04/30/2025 90WM000028 09/01/2023 - 08/31/2025 Funding agency: U.S. Department of Human Services Title: Health Center Program Cluster AL number: 93.224 Award number and period: H80CS04201-19 05/01/2023 - 04/30/2024 H80CS04201-20 05/01/2024 - 04/30/2025 23H8GCS48233 12/01/2022 - 12/31/2023 Questioned Costs: None How the questioned costs were computed: N/A
Schedule of Expenditures of Federal Awards (SEFA) Preparation Criteria or Specific Requirement: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Condition: The SEFA provided for the audit contained errors including the exclusion of federally funded grants, spending reported under incorrect assistance listing numbers, and reporting private contributions as federal grants. The errors were identified and corrected during the audit. Effect: Errors in the preparation of the SEFA schedule could lead funding agencies to misinterpret the level of spending for a particular program for the period under audit. Additionally, the identification of major federal award programs chosen for specific compliance testing could be erroneous, depending on the misstatement in the total amount of federal expenditures for the year. Cause: The SEFA report was not reviewed before it was provided for the audit. Repeat: No Auditor's Recommendations: The SEFA report and supporting documents should be reviewed by an individual that is knowledgeable about Community Council of Idaho, Inc.'s programs to help ensure accurate reporting of federal expenditures in the SEFA report. View of Responsible Officials: Community Council of Idaho, Inc. agrees with the audit finding and has written a corrective action plan. Audit finding 2024-001 represenets a significant deficiency in internal control over compliance related to reporting for Community Council of Idaho, Inc.'s major federal programs. Federal Program Information: Funding agency: U.S. Department of Human Services Title: Head Start Cluster AL number: 93.600 Award number and period: 90CM09845-04 05/01/2023 - 04/30/2024 90CM09845-05 05/01/2024 - 04/30/2025 90WM000028 09/01/2023 - 08/31/2025 Funding agency: U.S. Department of Human Services Title: Health Center Program Cluster AL number: 93.224 Award number and period: H80CS04201-19 05/01/2023 - 04/30/2024 H80CS04201-20 05/01/2024 - 04/30/2025 23H8GCS48233 12/01/2022 - 12/31/2023 Questioned Costs: None How the questioned costs were computed: N/A