Information on the Federal Programs ? for all findings: Assistance Listing Number 19.345 Finding 2022-002: Lack of Internal Control over Schedule of Expenditures of Federal Awards (SEFA) Condition: During our audit, we noted that the SEFA did not reconcile to the amounts reported on its financial statements. As a result, the SEFA under reported more than $500,000 of expenditures for the period under audit. Criteria: CFR 200.510(b) states that the recipient organization must be able to ?prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements?. The SEFA is required to list the individual Federal programs by Federal agency, name of the pass-through entity, total amount expended, assistance listing number and amounts provided to subrecipients. Context, Effect and Cause: During the year, management does not prepare a SEFA or a reconciliation of Federal expenditures to the expenses reported on an accrual basis in its accounting system. As a result the SEFA was not accurately completed at year-end, which required additional effort to prepare an accurate auditable report. Questioned Costs: Undetermined. Identification as a Repeat Finding: 2021-002 and 2020-002 Recommendation: We recommend CDT establish policies and procedures with respect to SEFA preparation. We also recommend the SEFA be periodically prepared and reconciled with its accounting records. The SEFA should also be reviewed and approved by management, and evidence of such approval should be maintained in its accounting records. Management Views and Corrective Action Plan: Management agrees with the finding and recommendation. Management is working with the accounting team to implement a new process to ensure that an internal SEFA is prepared and reconciled on a quarterly basis, at a minimum. Management will review and approve all reconciliations.
Information on the Federal Programs ? for all findings: Assistance Listing Number 19.345 Finding 2022-002: Lack of Internal Control over Schedule of Expenditures of Federal Awards (SEFA) Condition: During our audit, we noted that the SEFA did not reconcile to the amounts reported on its financial statements. As a result, the SEFA under reported more than $500,000 of expenditures for the period under audit. Criteria: CFR 200.510(b) states that the recipient organization must be able to ?prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements?. The SEFA is required to list the individual Federal programs by Federal agency, name of the pass-through entity, total amount expended, assistance listing number and amounts provided to subrecipients. Context, Effect and Cause: During the year, management does not prepare a SEFA or a reconciliation of Federal expenditures to the expenses reported on an accrual basis in its accounting system. As a result the SEFA was not accurately completed at year-end, which required additional effort to prepare an accurate auditable report. Questioned Costs: Undetermined. Identification as a Repeat Finding: 2021-002 and 2020-002 Recommendation: We recommend CDT establish policies and procedures with respect to SEFA preparation. We also recommend the SEFA be periodically prepared and reconciled with its accounting records. The SEFA should also be reviewed and approved by management, and evidence of such approval should be maintained in its accounting records. Management Views and Corrective Action Plan: Management agrees with the finding and recommendation. Management is working with the accounting team to implement a new process to ensure that an internal SEFA is prepared and reconciled on a quarterly basis, at a minimum. Management will review and approve all reconciliations.
Information on the Federal Programs ? for all findings: Assistance Listing Number 19.345 Finding 2022-002: Lack of Internal Control over Schedule of Expenditures of Federal Awards (SEFA) Condition: During our audit, we noted that the SEFA did not reconcile to the amounts reported on its financial statements. As a result, the SEFA under reported more than $500,000 of expenditures for the period under audit. Criteria: CFR 200.510(b) states that the recipient organization must be able to ?prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements?. The SEFA is required to list the individual Federal programs by Federal agency, name of the pass-through entity, total amount expended, assistance listing number and amounts provided to subrecipients. Context, Effect and Cause: During the year, management does not prepare a SEFA or a reconciliation of Federal expenditures to the expenses reported on an accrual basis in its accounting system. As a result the SEFA was not accurately completed at year-end, which required additional effort to prepare an accurate auditable report. Questioned Costs: Undetermined. Identification as a Repeat Finding: 2021-002 and 2020-002 Recommendation: We recommend CDT establish policies and procedures with respect to SEFA preparation. We also recommend the SEFA be periodically prepared and reconciled with its accounting records. The SEFA should also be reviewed and approved by management, and evidence of such approval should be maintained in its accounting records. Management Views and Corrective Action Plan: Management agrees with the finding and recommendation. Management is working with the accounting team to implement a new process to ensure that an internal SEFA is prepared and reconciled on a quarterly basis, at a minimum. Management will review and approve all reconciliations.
Information on the Federal Programs ? for all findings: Assistance Listing Number 19.345 Finding 2022-002: Lack of Internal Control over Schedule of Expenditures of Federal Awards (SEFA) Condition: During our audit, we noted that the SEFA did not reconcile to the amounts reported on its financial statements. As a result, the SEFA under reported more than $500,000 of expenditures for the period under audit. Criteria: CFR 200.510(b) states that the recipient organization must be able to ?prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements?. The SEFA is required to list the individual Federal programs by Federal agency, name of the pass-through entity, total amount expended, assistance listing number and amounts provided to subrecipients. Context, Effect and Cause: During the year, management does not prepare a SEFA or a reconciliation of Federal expenditures to the expenses reported on an accrual basis in its accounting system. As a result the SEFA was not accurately completed at year-end, which required additional effort to prepare an accurate auditable report. Questioned Costs: Undetermined. Identification as a Repeat Finding: 2021-002 and 2020-002 Recommendation: We recommend CDT establish policies and procedures with respect to SEFA preparation. We also recommend the SEFA be periodically prepared and reconciled with its accounting records. The SEFA should also be reviewed and approved by management, and evidence of such approval should be maintained in its accounting records. Management Views and Corrective Action Plan: Management agrees with the finding and recommendation. Management is working with the accounting team to implement a new process to ensure that an internal SEFA is prepared and reconciled on a quarterly basis, at a minimum. Management will review and approve all reconciliations.
Finding No: 2022-001 Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.155 Program: COVID- 19 Rural Health Research Centers Compliance Requirement: Other ? Inaccurate reporting of the Schedule of Expenditures of Federal Awards Award Year: July 1, 2021 through December 21, 2022 (a) Criteria or Requirement According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the entity?s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. (b) Condition Found The System did not have adequate controls relating to reporting expenditures for the COVD-19 Rural Health Research Centers program on the SEFA. Specifically, the SEFA did not include $900,000 of expenditures incurred in the current fiscal year related to this program. The System corrected the SEFA and the program was subsequently determined to be a major program. (c) Cause The System has a review process in place to identify all federal grants and related expenditures. However, the review control in place was not designed to detect grants for which reimbursement had not been initially requested as of September 30, 2022 for expenditures incurred during the year ended September 30, 2022. (d) Effect Failure to establish effective internal controls over the preparation of the SEFA may prevent the System from reporting accurate program information and completing an audit in accordance with the Uniform Guidance. (e) Questioned Cost None (f) Statistical Sample Not applicable (g) Repeat Finding in the Prior Year Not a repeat finding (h) Recommendation We recommend that the System strengthen controls over the identification of all federal grants and related expenditures to ensure that all relevant amounts are appropriately captured on the SEFA during the year. (i) View of Responsible Officials Identification of all federal grants that were not awarded in the Fiscal Year of the SEFA was not a part of the analysis of completeness for the SEFA. In December 2021, Tishomingo Health Services, Clay County Medical Corporation, Pontotoc Health Services, Webster Health Services, and Marion Regional Medical Center entered into a sub-grant agreement with the COVID-19 Ship Program (CFDA No. 93.155) and incurred expenses believed to be applicable to the program in fiscal year 2022. Since no requests of grant funding was made in FY2022, the COVID-19 Ship Program (CFDA No. 93.155) was not included.
ALN, Federal Agency, and Program Name 20.106 Federal Aviation Administration - Airport Improvement Program State CFSA Number, State Agency, and Program Name - 55.004 Florida Department of Transportation Aviation Development Grants Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR 200.508 (b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee?s financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expended Condition The SEFA required adjustments related to expenditures that were both improperly included and excluded, resulting in revisions to correct the SEFA. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The adjustments made to the schedule of expenditures of federal awards did not impact major program determination. There were certain expenditures that were identified during testing that should have been both included on and excluded from the SEFA related to ALN 20.106 (Airport Improvement Program) and State CFSA 55.004 (FDOT Aviation Development Grants). Cause and Effect Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the Authority's schedule of expenditures of federal awards provided to the auditors being inaccurate. Recommendation Internal control procedures should be initiated and enforced to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The Authority will strengthen its controls around the grant review process. In addition to the second-level review and approval process for grant revenue, the Authority will implement a quarterly review to identify eligible expenditures for federal and state grant reimbursements to ensure revenue is recognized in the proper period.
ALN, Federal Agency, and Program Name 20.106 Federal Aviation Administration - Airport Improvement Program State CFSA Number, State Agency, and Program Name - 55.004 Florida Department of Transportation Aviation Development Grants Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR 200.508 (b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee?s financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expended Condition The SEFA required adjustments related to expenditures that were both improperly included and excluded, resulting in revisions to correct the SEFA. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The adjustments made to the schedule of expenditures of federal awards did not impact major program determination. There were certain expenditures that were identified during testing that should have been both included on and excluded from the SEFA related to ALN 20.106 (Airport Improvement Program) and State CFSA 55.004 (FDOT Aviation Development Grants). Cause and Effect Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the Authority's schedule of expenditures of federal awards provided to the auditors being inaccurate. Recommendation Internal control procedures should be initiated and enforced to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The Authority will strengthen its controls around the grant review process. In addition to the second-level review and approval process for grant revenue, the Authority will implement a quarterly review to identify eligible expenditures for federal and state grant reimbursements to ensure revenue is recognized in the proper period.
ALN, Federal Agency, and Program Name 20.106 Federal Aviation Administration - Airport Improvement Program State CFSA Number, State Agency, and Program Name - 55.004 Florida Department of Transportation Aviation Development Grants Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR 200.508 (b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee?s financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expended Condition The SEFA required adjustments related to expenditures that were both improperly included and excluded, resulting in revisions to correct the SEFA. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The adjustments made to the schedule of expenditures of federal awards did not impact major program determination. There were certain expenditures that were identified during testing that should have been both included on and excluded from the SEFA related to ALN 20.106 (Airport Improvement Program) and State CFSA 55.004 (FDOT Aviation Development Grants). Cause and Effect Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the Authority's schedule of expenditures of federal awards provided to the auditors being inaccurate. Recommendation Internal control procedures should be initiated and enforced to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The Authority will strengthen its controls around the grant review process. In addition to the second-level review and approval process for grant revenue, the Authority will implement a quarterly review to identify eligible expenditures for federal and state grant reimbursements to ensure revenue is recognized in the proper period.
ALN, Federal Agency, and Program Name 20.106 Federal Aviation Administration - Airport Improvement Program State CFSA Number, State Agency, and Program Name - 55.004 Florida Department of Transportation Aviation Development Grants Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR 200.508 (b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee?s financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expended Condition The SEFA required adjustments related to expenditures that were both improperly included and excluded, resulting in revisions to correct the SEFA. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The adjustments made to the schedule of expenditures of federal awards did not impact major program determination. There were certain expenditures that were identified during testing that should have been both included on and excluded from the SEFA related to ALN 20.106 (Airport Improvement Program) and State CFSA 55.004 (FDOT Aviation Development Grants). Cause and Effect Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the Authority's schedule of expenditures of federal awards provided to the auditors being inaccurate. Recommendation Internal control procedures should be initiated and enforced to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The Authority will strengthen its controls around the grant review process. In addition to the second-level review and approval process for grant revenue, the Authority will implement a quarterly review to identify eligible expenditures for federal and state grant reimbursements to ensure revenue is recognized in the proper period.
ALN, Federal Agency, and Program Name 20.106 Federal Aviation Administration - Airport Improvement Program State CFSA Number, State Agency, and Program Name - 55.004 Florida Department of Transportation Aviation Development Grants Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR 200.508 (b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee?s financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expended Condition The SEFA required adjustments related to expenditures that were both improperly included and excluded, resulting in revisions to correct the SEFA. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The adjustments made to the schedule of expenditures of federal awards did not impact major program determination. There were certain expenditures that were identified during testing that should have been both included on and excluded from the SEFA related to ALN 20.106 (Airport Improvement Program) and State CFSA 55.004 (FDOT Aviation Development Grants). Cause and Effect Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the Authority's schedule of expenditures of federal awards provided to the auditors being inaccurate. Recommendation Internal control procedures should be initiated and enforced to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The Authority will strengthen its controls around the grant review process. In addition to the second-level review and approval process for grant revenue, the Authority will implement a quarterly review to identify eligible expenditures for federal and state grant reimbursements to ensure revenue is recognized in the proper period.
ALN, Federal Agency, and Program Name 20.106 Federal Aviation Administration - Airport Improvement Program State CFSA Number, State Agency, and Program Name - 55.004 Florida Department of Transportation Aviation Development Grants Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR 200.508 (b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee?s financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expended Condition The SEFA required adjustments related to expenditures that were both improperly included and excluded, resulting in revisions to correct the SEFA. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The adjustments made to the schedule of expenditures of federal awards did not impact major program determination. There were certain expenditures that were identified during testing that should have been both included on and excluded from the SEFA related to ALN 20.106 (Airport Improvement Program) and State CFSA 55.004 (FDOT Aviation Development Grants). Cause and Effect Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the Authority's schedule of expenditures of federal awards provided to the auditors being inaccurate. Recommendation Internal control procedures should be initiated and enforced to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The Authority will strengthen its controls around the grant review process. In addition to the second-level review and approval process for grant revenue, the Authority will implement a quarterly review to identify eligible expenditures for federal and state grant reimbursements to ensure revenue is recognized in the proper period.
ALN, Federal Agency, and Program Name 20.106 Federal Aviation Administration - Airport Improvement Program State CFSA Number, State Agency, and Program Name - 55.004 Florida Department of Transportation Aviation Development Grants Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR 200.508 (b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee?s financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expended Condition The SEFA required adjustments related to expenditures that were both improperly included and excluded, resulting in revisions to correct the SEFA. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The adjustments made to the schedule of expenditures of federal awards did not impact major program determination. There were certain expenditures that were identified during testing that should have been both included on and excluded from the SEFA related to ALN 20.106 (Airport Improvement Program) and State CFSA 55.004 (FDOT Aviation Development Grants). Cause and Effect Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the Authority's schedule of expenditures of federal awards provided to the auditors being inaccurate. Recommendation Internal control procedures should be initiated and enforced to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The Authority will strengthen its controls around the grant review process. In addition to the second-level review and approval process for grant revenue, the Authority will implement a quarterly review to identify eligible expenditures for federal and state grant reimbursements to ensure revenue is recognized in the proper period.
ALN, Federal Agency, and Program Name 20.106 Federal Aviation Administration - Airport Improvement Program State CFSA Number, State Agency, and Program Name - 55.004 Florida Department of Transportation Aviation Development Grants Federal Award Identification Number and Year N/A Pass through Entity N/A Finding Type Material weakness Repeat Finding Yes Criteria Per 2 CFR 200.508 (b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee?s financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expended Condition The SEFA required adjustments related to expenditures that were both improperly included and excluded, resulting in revisions to correct the SEFA. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The adjustments made to the schedule of expenditures of federal awards did not impact major program determination. There were certain expenditures that were identified during testing that should have been both included on and excluded from the SEFA related to ALN 20.106 (Airport Improvement Program) and State CFSA 55.004 (FDOT Aviation Development Grants). Cause and Effect Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the Authority's schedule of expenditures of federal awards provided to the auditors being inaccurate. Recommendation Internal control procedures should be initiated and enforced to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The Authority will strengthen its controls around the grant review process. In addition to the second-level review and approval process for grant revenue, the Authority will implement a quarterly review to identify eligible expenditures for federal and state grant reimbursements to ensure revenue is recognized in the proper period.
2022-006 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat) Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash Management and Allowable Costs/Cost Principles) Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL #20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local Fiscal Recovery Funds (AL #21.027) Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. CFR Section 200.502(a) states that the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grant awards. The County reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis of accounting, in accordance with generally accepted accounting principles. CFR Section 200.510(b) requires the auditee to prepare a SEFA 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(a), as stated above, and must reconcile amounts reported in the SEFA to the amounts reported in the auditee’s financial statements. Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures recorded in the financial statements. Changes were made to major program expenditures, as well as expenditures of other programs, during the closing process and during the completion of the single audit to properly report expenditures on the SEFA. Closing procedures should be in place to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and ensure the expenditures that will be claimed under federal awards are properly reported on the SEFA and audited financial statements prior to the start of the single audit. If expenditures reported on the SEFA are misstated, the County could fail to have a program appropriately identified as a major program and tested as a major program during the single audit. Failure to have a program audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Cause: Closing procedures were not in place and management did not effectively communicate with County departments responsible for administering federal awards to identify all federal grant related activity. Effect: The SEFA required material adjustments to include all federal expenditures prior to the single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during the single audit. Questioned Costs: No costs have been questioned as a result of this finding. Recommendation: We recommend that management meet with department heads throughout the year and during the closing process to identify all expenditures under federal awards. Training should be provided to all staff to make sure they are aware of the importance of accurately reconciling and claiming grant expenditures on a timely basis and providing the information to management for inclusion on the SEFA. Views of Responsible Officials: The County will work to improve closing processes and communications with various departments to ensure the SEFA is complete and accurate.
2022-006 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat) Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash Management and Allowable Costs/Cost Principles) Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL #20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local Fiscal Recovery Funds (AL #21.027) Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. CFR Section 200.502(a) states that the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grant awards. The County reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis of accounting, in accordance with generally accepted accounting principles. CFR Section 200.510(b) requires the auditee to prepare a SEFA 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(a), as stated above, and must reconcile amounts reported in the SEFA to the amounts reported in the auditee’s financial statements. Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures recorded in the financial statements. Changes were made to major program expenditures, as well as expenditures of other programs, during the closing process and during the completion of the single audit to properly report expenditures on the SEFA. Closing procedures should be in place to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and ensure the expenditures that will be claimed under federal awards are properly reported on the SEFA and audited financial statements prior to the start of the single audit. If expenditures reported on the SEFA are misstated, the County could fail to have a program appropriately identified as a major program and tested as a major program during the single audit. Failure to have a program audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Cause: Closing procedures were not in place and management did not effectively communicate with County departments responsible for administering federal awards to identify all federal grant related activity. Effect: The SEFA required material adjustments to include all federal expenditures prior to the single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during the single audit. Questioned Costs: No costs have been questioned as a result of this finding. Recommendation: We recommend that management meet with department heads throughout the year and during the closing process to identify all expenditures under federal awards. Training should be provided to all staff to make sure they are aware of the importance of accurately reconciling and claiming grant expenditures on a timely basis and providing the information to management for inclusion on the SEFA. Views of Responsible Officials: The County will work to improve closing processes and communications with various departments to ensure the SEFA is complete and accurate.
2022-006 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat) Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash Management and Allowable Costs/Cost Principles) Federal Program: U.S. Department of Transportation – Airport Improvement Program (AL #20.106); all project numbers and U.S. Department of Treasury – Coronavirus State and Local Fiscal Recovery Funds (AL #21.027) Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. CFR Section 200.502(a) states that the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grant awards. The County reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis of accounting, in accordance with generally accepted accounting principles. CFR Section 200.510(b) requires the auditee to prepare a SEFA 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(a), as stated above, and must reconcile amounts reported in the SEFA to the amounts reported in the auditee’s financial statements. Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures recorded in the financial statements. Changes were made to major program expenditures, as well as expenditures of other programs, during the closing process and during the completion of the single audit to properly report expenditures on the SEFA. Closing procedures should be in place to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the grantor, claim the grant revenues on a timely basis, reconcile the claim to the general ledger, and ensure the expenditures that will be claimed under federal awards are properly reported on the SEFA and audited financial statements prior to the start of the single audit. If expenditures reported on the SEFA are misstated, the County could fail to have a program appropriately identified as a major program and tested as a major program during the single audit. Failure to have a program audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Cause: Closing procedures were not in place and management did not effectively communicate with County departments responsible for administering federal awards to identify all federal grant related activity. Effect: The SEFA required material adjustments to include all federal expenditures prior to the single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during the single audit. Questioned Costs: No costs have been questioned as a result of this finding. Recommendation: We recommend that management meet with department heads throughout the year and during the closing process to identify all expenditures under federal awards. Training should be provided to all staff to make sure they are aware of the importance of accurately reconciling and claiming grant expenditures on a timely basis and providing the information to management for inclusion on the SEFA. Views of Responsible Officials: The County will work to improve closing processes and communications with various departments to ensure the SEFA is complete and accurate.
Section III - Findings Required to be Reported in Accordance with Uniform Guidance: 2022-002 Expenditures of Federal Awards-Internal Control and Compliance- AL/CFDA #: 93.243-Federal Program: Substance Abuse and Mental Health Services Projects of Regional and National Significance-Criteria: Chapter 2, Part 200, Subpart F § 200.510 Schedule of Expenditures of Federal Awards (Uniform Guidance) states, "The Auditee must also prepare a schedule of expenditures of federal awards for the period covered by the financial statements which must include the total Federal awards expended as determined in §200.502...(3) Provide total Federal awards expended for each Federal Program..."-Condition: The NIWHRC did not keep adequate accounting records to allow for expenditures to be accumulated by the individual Federal program. All expenditures were recorded as Federal expenditures without information on which program expended the funds.- Cause and Effect: No procedure has been developed to reconcile all balance sheet accounts each month (i.e., restricted cash, utility receivables, account payables, capital assets, etc.). As a result, the balance sheet may be out of balance with the subsidiary accounts and ledgers and the Organization would not be aware of it. - Recommendation: We recommend the NIWHRC develop policy and procedures to record federal expenditures by Federal award. This could also be a function of a third-party CPA to reconcile each Federal award to ensure expenditures are recorded correctly. - Responsible Official's Response: Subsequent to the year end, NIWHRC has engaged an outside CPA firm to reconcile the accounts monthly.
Section III - Findings Required to be Reported in Accordance with Uniform Guidance: 2022-002 Expenditures of Federal Awards-Internal Control and Compliance- AL/CFDA #: 93.243-Federal Program: Substance Abuse and Mental Health Services Projects of Regional and National Significance-Criteria: Chapter 2, Part 200, Subpart F § 200.510 Schedule of Expenditures of Federal Awards (Uniform Guidance) states, "The Auditee must also prepare a schedule of expenditures of federal awards for the period covered by the financial statements which must include the total Federal awards expended as determined in §200.502...(3) Provide total Federal awards expended for each Federal Program..."-Condition: The NIWHRC did not keep adequate accounting records to allow for expenditures to be accumulated by the individual Federal program. All expenditures were recorded as Federal expenditures without information on which program expended the funds.- Cause and Effect: No procedure has been developed to reconcile all balance sheet accounts each month (i.e., restricted cash, utility receivables, account payables, capital assets, etc.). As a result, the balance sheet may be out of balance with the subsidiary accounts and ledgers and the Organization would not be aware of it. - Recommendation: We recommend the NIWHRC develop policy and procedures to record federal expenditures by Federal award. This could also be a function of a third-party CPA to reconcile each Federal award to ensure expenditures are recorded correctly. - Responsible Official's Response: Subsequent to the year end, NIWHRC has engaged an outside CPA firm to reconcile the accounts monthly.
Section III - Findings Required to be Reported in Accordance with Uniform Guidance: 2022-002 Expenditures of Federal Awards-Internal Control and Compliance- AL/CFDA #: 93.243-Federal Program: Substance Abuse and Mental Health Services Projects of Regional and National Significance-Criteria: Chapter 2, Part 200, Subpart F § 200.510 Schedule of Expenditures of Federal Awards (Uniform Guidance) states, "The Auditee must also prepare a schedule of expenditures of federal awards for the period covered by the financial statements which must include the total Federal awards expended as determined in §200.502...(3) Provide total Federal awards expended for each Federal Program..."-Condition: The NIWHRC did not keep adequate accounting records to allow for expenditures to be accumulated by the individual Federal program. All expenditures were recorded as Federal expenditures without information on which program expended the funds.- Cause and Effect: No procedure has been developed to reconcile all balance sheet accounts each month (i.e., restricted cash, utility receivables, account payables, capital assets, etc.). As a result, the balance sheet may be out of balance with the subsidiary accounts and ledgers and the Organization would not be aware of it. - Recommendation: We recommend the NIWHRC develop policy and procedures to record federal expenditures by Federal award. This could also be a function of a third-party CPA to reconcile each Federal award to ensure expenditures are recorded correctly. - Responsible Official's Response: Subsequent to the year end, NIWHRC has engaged an outside CPA firm to reconcile the accounts monthly.
Assistance Listing Number, Federal Agency, and Program Name - 21.027 U.S. Department of the Treasury Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - YDYNCVFA9NH4 Pass through Entity - City of Raleigh, North Carolina Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must prepare appropriate financial statements, including the schedule of expenditures of federal awards, in accordance with 200.510 financial statements. Per 2 CFR 200.510(b), the auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502 basis for determining federal awards expended. Condition - Controls in place were not adequate to ensure the schedule of federal expenditures was complete and accurate. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - WakeMed did not initially include the funds received through the U.S. Department of the Treasury American Rescue Plan Act of 2021, Coronavirus State and Local Fiscal Recovery Funds on the SEFA. Cause and Effect - WakeMed did not have a process in place to identify all potential sources of federal funding received during the year, resulting in the SEFA being incomplete for the year ended September 30, 2022. Upon discovery of the error, WakeMed prepared a SEFA that included the U.S. Department of the Treasury American Rescue Plan Act of 2021, Coronavirus State and Local Fiscal Recovery Funds. This lack of controls resulted in the reissuance of the 2022 single audit. Recommendation - Management should implement controls to ensure all federal funding received is properly identified as such and included on the SEFA. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding as reported. The federal funding was not received until fiscal year 2023 while some expenditures were incurred in fiscal year 2022. The timing of events contributed to the oversight on the 2022 SEFA. WakeMed has reeducated staff on the preparation of the SEFA in order to prevent this error from reoccurring.
Finding 2022 – 008: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Repeat Finding: 2019-007, 2020-007 and 2021-006) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Governmental Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the Governmental Department did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance, and it was discovered that certain adjustments for grants receivable, unearned revenues and grant revenue had not been made in order to properly report total federal expenditures. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Governmental Department’s general ledger. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Governmental Department was not able to produce an accurate and timely SEFA, which required additional effort and resources by the Governmental Department and auditor during the audit process. Recommendation: We recommend that the Governmental Department becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 008: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Repeat Finding: 2019-007, 2020-007 and 2021-006) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Governmental Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the Governmental Department did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance, and it was discovered that certain adjustments for grants receivable, unearned revenues and grant revenue had not been made in order to properly report total federal expenditures. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Governmental Department’s general ledger. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Governmental Department was not able to produce an accurate and timely SEFA, which required additional effort and resources by the Governmental Department and auditor during the audit process. Recommendation: We recommend that the Governmental Department becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 008: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Repeat Finding: 2019-007, 2020-007 and 2021-006) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Governmental Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the Governmental Department did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance, and it was discovered that certain adjustments for grants receivable, unearned revenues and grant revenue had not been made in order to properly report total federal expenditures. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Governmental Department’s general ledger. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Governmental Department was not able to produce an accurate and timely SEFA, which required additional effort and resources by the Governmental Department and auditor during the audit process. Recommendation: We recommend that the Governmental Department becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 008: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Repeat Finding: 2019-007, 2020-007 and 2021-006) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Governmental Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the Governmental Department did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance, and it was discovered that certain adjustments for grants receivable, unearned revenues and grant revenue had not been made in order to properly report total federal expenditures. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Governmental Department’s general ledger. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Governmental Department was not able to produce an accurate and timely SEFA, which required additional effort and resources by the Governmental Department and auditor during the audit process. Recommendation: We recommend that the Governmental Department becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 008: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Repeat Finding: 2019-007, 2020-007 and 2021-006) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Governmental Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the Governmental Department did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance, and it was discovered that certain adjustments for grants receivable, unearned revenues and grant revenue had not been made in order to properly report total federal expenditures. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Governmental Department’s general ledger. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Governmental Department was not able to produce an accurate and timely SEFA, which required additional effort and resources by the Governmental Department and auditor during the audit process. Recommendation: We recommend that the Governmental Department becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 008: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Repeat Finding: 2019-007, 2020-007 and 2021-006) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Governmental Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the Governmental Department did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance, and it was discovered that certain adjustments for grants receivable, unearned revenues and grant revenue had not been made in order to properly report total federal expenditures. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Governmental Department’s general ledger. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Governmental Department was not able to produce an accurate and timely SEFA, which required additional effort and resources by the Governmental Department and auditor during the audit process. Recommendation: We recommend that the Governmental Department becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Assistance Listing Number, Federal Agency, and Program Name - 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 14.218, U.S. Department of Housing and Urban Development, Community Development Block Grant Entitlement Grants Cluster Federal Award Identification Number and Year - N/A Passthrough Entity - 66.818, Brownfields Assessment and Cleanup of Cooperative Agreements is direct funded. 14.218, Community Development Block Grant is passed through Wayne County, Michigan. Finding Type - Material weakness Repeat Finding - No Criteria - The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of Federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule. Condition - The schedule of expenditures of federal awards (SEFA) was not accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During the fiscal year ended September 30, 2022, the City expended approximately $921,000 of federal funding. The initial draft of the SEFA included the following inaccuracies: ALN 66.818 The expenditures reported on the SEFA were understated by $125,687. ALN 14.218 The expenditures reported on the SEFA were understated by $80,468. The errors noted above have been corrected on the SEFA as of September 30, 2022. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit, as the City did not include use of program income in its review of federal expenditures. The errors resulted in the understatement of federal expenditures, as noted in the context above. Additionally, the understatement of federal expenditures on the SEFA resulted in the incorrect conclusion that federal activity was below $750,000, and, therefore, a single audit was not needed. Recommendation - We recommend the City implement a process to ensure that the SEFA is complete and accurate. Views of Responsible Officials and Corrective Action Plan - The City will review its process for identifying and communicating Federal Grant expenditures to its auditors.
Assistance Listing Number, Federal Agency, and Program Name - 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 14.218, U.S. Department of Housing and Urban Development, Community Development Block Grant Entitlement Grants Cluster Federal Award Identification Number and Year - N/A Passthrough Entity - 66.818, Brownfields Assessment and Cleanup of Cooperative Agreements is direct funded. 14.218, Community Development Block Grant is passed through Wayne County, Michigan. Finding Type - Material weakness Repeat Finding - No Criteria - The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of Federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule. Condition - The schedule of expenditures of federal awards (SEFA) was not accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - During the fiscal year ended September 30, 2022, the City expended approximately $921,000 of federal funding. The initial draft of the SEFA included the following inaccuracies: ALN 66.818 The expenditures reported on the SEFA were understated by $125,687. ALN 14.218 The expenditures reported on the SEFA were understated by $80,468. The errors noted above have been corrected on the SEFA as of September 30, 2022. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit, as the City did not include use of program income in its review of federal expenditures. The errors resulted in the understatement of federal expenditures, as noted in the context above. Additionally, the understatement of federal expenditures on the SEFA resulted in the incorrect conclusion that federal activity was below $750,000, and, therefore, a single audit was not needed. Recommendation - We recommend the City implement a process to ensure that the SEFA is complete and accurate. Views of Responsible Officials and Corrective Action Plan - The City will review its process for identifying and communicating Federal Grant expenditures to its auditors.
Finding 2022 – 006: Reporting - Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Criteria: Uniform Guidance 2 CFR § 200.510 requires an auditee to "prepare a schedule of expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements [that]… at a minimum shall… list individual Federal programs by Federal agency... [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing number or other identifying number when the ALN information is not available." In accordance with Uniform Guidance, the auditee is required to maintain a structure of internal controls to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the Organization did not have adequate controls in place to ensure the SEFA accurately reflected each award's federal agency and assistance listing number. There were differences between the SEFA and the grant agreements/compliance supplements, requiring adjustments to the SEFA. Questioned Costs: None. Cause: A lack of sufficient training or understanding of Uniform Guidance requirements, particularly related to SEFA reporting elements, contributed to this finding. Effect: The Organization was unable to produce an accurate and timely SEFA, requiring additional effort and resources from both the Organization and the auditor to correct reporting errors during the audit process. Recommendation: We recommend the Organization enhance its understanding of SEFA reporting requirements under Uniform Guidance, develop and implement a structured review process to ensure compliance with those reporting requirements, reconcile federal expenditures reported on the SEFA to the amounts recorded in the general ledger, and review federal agency names and assistance listing numbers against grant documentation to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2022 – 006: Reporting - Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Criteria: Uniform Guidance 2 CFR § 200.510 requires an auditee to "prepare a schedule of expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements [that]… at a minimum shall… list individual Federal programs by Federal agency... [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing number or other identifying number when the ALN information is not available." In accordance with Uniform Guidance, the auditee is required to maintain a structure of internal controls to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2022, the Organization did not have adequate controls in place to ensure the SEFA accurately reflected each award's federal agency and assistance listing number. There were differences between the SEFA and the grant agreements/compliance supplements, requiring adjustments to the SEFA. Questioned Costs: None. Cause: A lack of sufficient training or understanding of Uniform Guidance requirements, particularly related to SEFA reporting elements, contributed to this finding. Effect: The Organization was unable to produce an accurate and timely SEFA, requiring additional effort and resources from both the Organization and the auditor to correct reporting errors during the audit process. Recommendation: We recommend the Organization enhance its understanding of SEFA reporting requirements under Uniform Guidance, develop and implement a structured review process to ensure compliance with those reporting requirements, reconcile federal expenditures reported on the SEFA to the amounts recorded in the general ledger, and review federal agency names and assistance listing numbers against grant documentation to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
2022-002 ? Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?The auditee must also prepare a schedule of expenditures of Federal awards 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 ?200.328 Financial Reporting and ?200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition ? During the year ended August 31, 2022, the Center received additional EIDL funds. Prior to the COVID-19 pandemic, the Center did not receive and spend federal dollars in excess of the limit that required a single audit to be performed. Due to the lack of expertise surrounding the preparation of the SEFA and the non-recurring nature of the COVID-19 pandemic relief funding provided by the federal government, the Center was uncertain of some of the specifics on the SEFA statement. Cause ? The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect ? Management was unaware that the EIDL was a federal award requiring a single audit prior to discussion with the auditors. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend management attend Federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the Federal funds are reported accurately on the SEFA and that programs are reported under the correct assistance listing number. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. The Center will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Preparation of Schedule of Expenditures of Federal Awards (All Federal Awards) Condition: The District did not prepare a Schedule of Expenditures of Federal Awards (SEFA). Criteria: 2CFR Section 200.510(b) of Uniform Guidance requires minimum data elements for preparation of the Schedule of Expenditures of Federal Awards. Effect of the Condition: Corrections were required to have accurate figures, determination of clusters, and listing by programs of federal agency. Cause of the Condition: The District separately lists federal expenditures using a specific grouping number for each grant separately and relies on this information for tracking federal revenue and expenditures. Recommendation: The District should document each federal program including the federal agency, clusters, and total federal expenditures. Auditee Response: Management will complete the SEFA annually in future years.
Material Weakness in Internal Control Over Grant Reporting Assistance Listing Numbers 21.027 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Program Federal Agency U.S. Department of Treasury Passthrough Agency Not applicable Award Number/Year 2022 Criteria The County is required to maintain a system of controls over the preparation of its Schedule of Expenditures of Federal Awards (SEFA) per the Uniform Guidance at 2 CFR 200.510(b) and its Consolidated Year-End Financial Report (CYEFR) in compliance with the 30 ILCS 708/1 Grant Accountability and Transparency Act (GATA). Condition The County did not have a centralized process for maintaining its grant accounting records and related supporting documentation to ensure that all federal grants expenditures were included on its SEFA and to ensure that all state grant expenditures were included on its CYEFR for fiscal year 2022. The County’s expenditures totaling $499,973 for its CSLFRF program were not included in its original SEFA which resulted in the SEFA being materially misstated. Additionally, it appears that certain offices and departments are noncompliant with the County’s financial policy that requires that all financial accounting records and related supporting documentation be provided to the County Treasurer so that the County Treasurer can maintain a complete set of grant accounting records for the entire County. Cause The County does not have internal personnel or contracted personnel with the requisite knowledge and experience to prepare its SEFA and CYEFR. Additionally, offices and departments within the County that receive and administer grants maintain the grant accounting records and related supporting documentation independent of the County Treasurer. These offices and departments provide the grant expenditures that are included in the CYEFR but do not consistently provide the detailed grant accounting records for use to prepare the SEFA and CYEFR. Effect Allowing these conditions to persist puts the County, its management and the Board of Commissioners at risk of 1) material misstatements being included in the County’s SEFA and CYEFR without being detected and noncompliance with grant agreements. These conditions could also result in a suspension of funding from grant funding sources, investigations of potential abuse and/or misappropriation of grant funds, and orders to return grant funds. Recommendation We recommend that management either 1) provide training for its key accounting personnel so that they will be able to prepare SEFA and CYEFR for the County and/or 2) contract with an accountant or firm that has the relevant skills, knowledge and experience to prepare the SEFA and CYEFR. We further recommend that the Board of Commissioners enforce the County’s policy of requiring that all accounting records and related supporting documentation be made available to the County Treasurer so that there is a process in which all of the County’s financial activity pertaining to grants is compiled, reconciled and included in a complete set of grant financial reports utilized to prepare the SEFA and CYEFR for the County. Questioned Costs None noted. Repeat Finding Yes. This finding also occurred in 2020 (2020-003) and 2019 (2019-002). Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Material Weakness in Internal Control Over Grant Reporting Assistance Listing Numbers 21.027 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Program Federal Agency U.S. Department of Treasury Passthrough Agency Not applicable Award Number/Year 2022 Criteria The County is required to maintain a system of controls over the preparation of its Schedule of Expenditures of Federal Awards (SEFA) per the Uniform Guidance at 2 CFR 200.510(b) and its Consolidated Year-End Financial Report (CYEFR) in compliance with the 30 ILCS 708/1 Grant Accountability and Transparency Act (GATA). Condition The County did not have a centralized process for maintaining its grant accounting records and related supporting documentation to ensure that all federal grants expenditures were included on its SEFA and to ensure that all state grant expenditures were included on its CYEFR for fiscal year 2022. The County’s expenditures totaling $499,973 for its CSLFRF program were not included in its original SEFA which resulted in the SEFA being materially misstated. Additionally, it appears that certain offices and departments are noncompliant with the County’s financial policy that requires that all financial accounting records and related supporting documentation be provided to the County Treasurer so that the County Treasurer can maintain a complete set of grant accounting records for the entire County. Cause The County does not have internal personnel or contracted personnel with the requisite knowledge and experience to prepare its SEFA and CYEFR. Additionally, offices and departments within the County that receive and administer grants maintain the grant accounting records and related supporting documentation independent of the County Treasurer. These offices and departments provide the grant expenditures that are included in the CYEFR but do not consistently provide the detailed grant accounting records for use to prepare the SEFA and CYEFR. Effect Allowing these conditions to persist puts the County, its management and the Board of Commissioners at risk of 1) material misstatements being included in the County’s SEFA and CYEFR without being detected and noncompliance with grant agreements. These conditions could also result in a suspension of funding from grant funding sources, investigations of potential abuse and/or misappropriation of grant funds, and orders to return grant funds. Recommendation We recommend that management either 1) provide training for its key accounting personnel so that they will be able to prepare SEFA and CYEFR for the County and/or 2) contract with an accountant or firm that has the relevant skills, knowledge and experience to prepare the SEFA and CYEFR. We further recommend that the Board of Commissioners enforce the County’s policy of requiring that all accounting records and related supporting documentation be made available to the County Treasurer so that there is a process in which all of the County’s financial activity pertaining to grants is compiled, reconciled and included in a complete set of grant financial reports utilized to prepare the SEFA and CYEFR for the County. Questioned Costs None noted. Repeat Finding Yes. This finding also occurred in 2020 (2020-003) and 2019 (2019-002). Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Material Weakness in Internal Control Over Grant Reporting Assistance Listing Numbers 21.027 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Program Federal Agency U.S. Department of Treasury Passthrough Agency Not applicable Award Number/Year 2022 Criteria The County is required to maintain a system of controls over the preparation of its Schedule of Expenditures of Federal Awards (SEFA) per the Uniform Guidance at 2 CFR 200.510(b) and its Consolidated Year-End Financial Report (CYEFR) in compliance with the 30 ILCS 708/1 Grant Accountability and Transparency Act (GATA). Condition The County did not have a centralized process for maintaining its grant accounting records and related supporting documentation to ensure that all federal grants expenditures were included on its SEFA and to ensure that all state grant expenditures were included on its CYEFR for fiscal year 2022. The County’s expenditures totaling $499,973 for its CSLFRF program were not included in its original SEFA which resulted in the SEFA being materially misstated. Additionally, it appears that certain offices and departments are noncompliant with the County’s financial policy that requires that all financial accounting records and related supporting documentation be provided to the County Treasurer so that the County Treasurer can maintain a complete set of grant accounting records for the entire County. Cause The County does not have internal personnel or contracted personnel with the requisite knowledge and experience to prepare its SEFA and CYEFR. Additionally, offices and departments within the County that receive and administer grants maintain the grant accounting records and related supporting documentation independent of the County Treasurer. These offices and departments provide the grant expenditures that are included in the CYEFR but do not consistently provide the detailed grant accounting records for use to prepare the SEFA and CYEFR. Effect Allowing these conditions to persist puts the County, its management and the Board of Commissioners at risk of 1) material misstatements being included in the County’s SEFA and CYEFR without being detected and noncompliance with grant agreements. These conditions could also result in a suspension of funding from grant funding sources, investigations of potential abuse and/or misappropriation of grant funds, and orders to return grant funds. Recommendation We recommend that management either 1) provide training for its key accounting personnel so that they will be able to prepare SEFA and CYEFR for the County and/or 2) contract with an accountant or firm that has the relevant skills, knowledge and experience to prepare the SEFA and CYEFR. We further recommend that the Board of Commissioners enforce the County’s policy of requiring that all accounting records and related supporting documentation be made available to the County Treasurer so that there is a process in which all of the County’s financial activity pertaining to grants is compiled, reconciled and included in a complete set of grant financial reports utilized to prepare the SEFA and CYEFR for the County. Questioned Costs None noted. Repeat Finding Yes. This finding also occurred in 2020 (2020-003) and 2019 (2019-002). Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Material Weakness in Internal Control Over Grant Reporting Assistance Listing Numbers 21.027 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Program Federal Agency U.S. Department of Treasury Passthrough Agency Not applicable Award Number/Year 2022 Criteria The County is required to maintain a system of controls over the preparation of its Schedule of Expenditures of Federal Awards (SEFA) per the Uniform Guidance at 2 CFR 200.510(b) and its Consolidated Year-End Financial Report (CYEFR) in compliance with the 30 ILCS 708/1 Grant Accountability and Transparency Act (GATA). Condition The County did not have a centralized process for maintaining its grant accounting records and related supporting documentation to ensure that all federal grants expenditures were included on its SEFA and to ensure that all state grant expenditures were included on its CYEFR for fiscal year 2022. The County’s expenditures totaling $499,973 for its CSLFRF program were not included in its original SEFA which resulted in the SEFA being materially misstated. Additionally, it appears that certain offices and departments are noncompliant with the County’s financial policy that requires that all financial accounting records and related supporting documentation be provided to the County Treasurer so that the County Treasurer can maintain a complete set of grant accounting records for the entire County. Cause The County does not have internal personnel or contracted personnel with the requisite knowledge and experience to prepare its SEFA and CYEFR. Additionally, offices and departments within the County that receive and administer grants maintain the grant accounting records and related supporting documentation independent of the County Treasurer. These offices and departments provide the grant expenditures that are included in the CYEFR but do not consistently provide the detailed grant accounting records for use to prepare the SEFA and CYEFR. Effect Allowing these conditions to persist puts the County, its management and the Board of Commissioners at risk of 1) material misstatements being included in the County’s SEFA and CYEFR without being detected and noncompliance with grant agreements. These conditions could also result in a suspension of funding from grant funding sources, investigations of potential abuse and/or misappropriation of grant funds, and orders to return grant funds. Recommendation We recommend that management either 1) provide training for its key accounting personnel so that they will be able to prepare SEFA and CYEFR for the County and/or 2) contract with an accountant or firm that has the relevant skills, knowledge and experience to prepare the SEFA and CYEFR. We further recommend that the Board of Commissioners enforce the County’s policy of requiring that all accounting records and related supporting documentation be made available to the County Treasurer so that there is a process in which all of the County’s financial activity pertaining to grants is compiled, reconciled and included in a complete set of grant financial reports utilized to prepare the SEFA and CYEFR for the County. Questioned Costs None noted. Repeat Finding Yes. This finding also occurred in 2020 (2020-003) and 2019 (2019-002). Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Material Weakness in Internal Control Over Grant Reporting Assistance Listing Numbers 21.027 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Program Federal Agency U.S. Department of Treasury Passthrough Agency Not applicable Award Number/Year 2022 Criteria The County is required to maintain a system of controls over the preparation of its Schedule of Expenditures of Federal Awards (SEFA) per the Uniform Guidance at 2 CFR 200.510(b) and its Consolidated Year-End Financial Report (CYEFR) in compliance with the 30 ILCS 708/1 Grant Accountability and Transparency Act (GATA). Condition The County did not have a centralized process for maintaining its grant accounting records and related supporting documentation to ensure that all federal grants expenditures were included on its SEFA and to ensure that all state grant expenditures were included on its CYEFR for fiscal year 2022. The County’s expenditures totaling $499,973 for its CSLFRF program were not included in its original SEFA which resulted in the SEFA being materially misstated. Additionally, it appears that certain offices and departments are noncompliant with the County’s financial policy that requires that all financial accounting records and related supporting documentation be provided to the County Treasurer so that the County Treasurer can maintain a complete set of grant accounting records for the entire County. Cause The County does not have internal personnel or contracted personnel with the requisite knowledge and experience to prepare its SEFA and CYEFR. Additionally, offices and departments within the County that receive and administer grants maintain the grant accounting records and related supporting documentation independent of the County Treasurer. These offices and departments provide the grant expenditures that are included in the CYEFR but do not consistently provide the detailed grant accounting records for use to prepare the SEFA and CYEFR. Effect Allowing these conditions to persist puts the County, its management and the Board of Commissioners at risk of 1) material misstatements being included in the County’s SEFA and CYEFR without being detected and noncompliance with grant agreements. These conditions could also result in a suspension of funding from grant funding sources, investigations of potential abuse and/or misappropriation of grant funds, and orders to return grant funds. Recommendation We recommend that management either 1) provide training for its key accounting personnel so that they will be able to prepare SEFA and CYEFR for the County and/or 2) contract with an accountant or firm that has the relevant skills, knowledge and experience to prepare the SEFA and CYEFR. We further recommend that the Board of Commissioners enforce the County’s policy of requiring that all accounting records and related supporting documentation be made available to the County Treasurer so that there is a process in which all of the County’s financial activity pertaining to grants is compiled, reconciled and included in a complete set of grant financial reports utilized to prepare the SEFA and CYEFR for the County. Questioned Costs None noted. Repeat Finding Yes. This finding also occurred in 2020 (2020-003) and 2019 (2019-002). Views of Responsible Officials and Planned Corrective Actions See corrective action plan.
Material Weakness in Internal Control Over Grant Reporting Assistance Listing Numbers 21.027 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Program Federal Agency U.S. Department of Treasury Passthrough Agency Not applicable Award Number/Year 2022 Criteria The County is required to maintain a system of controls over the preparation of its Schedule of Expenditures of Federal Awards (SEFA) per the Uniform Guidance at 2 CFR 200.510(b) and its Consolidated Year-End Financial Report (CYEFR) in compliance with the 30 ILCS 708/1 Grant Accountability and Transparency Act (GATA). Condition The County did not have a centralized process for maintaining its grant accounting records and related supporting documentation to ensure that all federal grants expenditures were included on its SEFA and to ensure that all state grant expenditures were included on its CYEFR for fiscal year 2022. The County’s expenditures totaling $499,973 for its CSLFRF program were not included in its original SEFA which resulted in the SEFA being materially misstated. Additionally, it appears that certain offices and departments are noncompliant with the County’s financial policy that requires that all financial accounting records and related supporting documentation be provided to the County Treasurer so that the County Treasurer can maintain a complete set of grant accounting records for the entire County. Cause The County does not have internal personnel or contracted personnel with the requisite knowledge and experience to prepare its SEFA and CYEFR. Additionally, offices and departments within the County that receive and administer grants maintain the grant accounting records and related supporting documentation independent of the County Treasurer. These offices and departments provide the grant expenditures that are included in the CYEFR but do not consistently provide the detailed grant accounting records for use to prepare the SEFA and CYEFR. Effect Allowing these conditions to persist puts the County, its management and the Board of Commissioners at risk of 1) material misstatements being included in the County’s SEFA and CYEFR without being detected and noncompliance with grant agreements. These conditions could also result in a suspension of funding from grant funding sources, investigations of potential abuse and/or misappropriation of grant funds, and orders to return grant funds. Recommendation We recommend that management either 1) provide training for its key accounting personnel so that they will be able to prepare SEFA and CYEFR for the County and/or 2) contract with an accountant or firm that has the relevant skills, knowledge and experience to prepare the SEFA and CYEFR. We further recommend that the Board of Commissioners enforce the County’s policy of requiring that all accounting records and related supporting documentation be made available to the County Treasurer so that there is a process in which all of the County’s financial activity pertaining to grants is compiled, reconciled and included in a complete set of grant financial reports utilized to prepare the SEFA and CYEFR for the County. Questioned Costs None noted. Repeat Finding Yes. This finding also occurred in 2020 (2020-003) and 2019 (2019-002). Views of Responsible Officials and Planned Corrective Actions See corrective action plan.