Criteria or Specific Requirement: Title 2 of the Code of Federal Regulations (CFR) 200.302(b)(4) requires non-federal entities to maintain effective internal control over federal programs. Specifically, the organization must reconcile its federal awards with expenditures incurred and revenue received. Additionally, 2 CFR Part 200.510(b)(1-6) specifies that a Schedule of Expenditures of Federal Awards (SEFA) be prepared for each fiscal year in accordance with the applicable federal regulations. The SEFA must include, at a minimum, total federal awards expended for each individual federal program and must accurately report all federal expenditures received and expended during the fiscal year. Condition and Context: During the audit, it was noted that Solvista Health does not reconcile federal awards with the expenditures used and revenue earned. Additionally, Solvista Health did not prepare an accurate SEFA. Questioned Costs: N/A Cause: Solvista Health’s accounting and internal control systems were not designed and implemented to ensure reconciliation of federal awards with expenditures and revenue, and the preparation of an accurate SEFA. Effect: Failure to reconcile federal awards with expenditures and related revenue, along with the absence of an accurate SEFA, could lead to incorrect reporting of federal funds, misstatement of financial information, and non-compliance with federal requirements. This represents a potential risk for improper use of federal funds and an inability to meet compliance and reporting obligations. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend Solvista Health design and implement internal control procedures to reconcile federal awards with the expenditures and revenue received to ensure completeness and accuracy in financial reporting. Additionally, management should prepare and maintain an accurate SEFA in accordance with 2 CFR 200.510 to ensure proper documentation and compliance with federal reporting requirements. Additionally, we recommend that Solvista Health train appropriate personnel on the requirements related to federal award reconciliations and SEFA preparation to mitigate the risk of noncompliance in the future.
Criteria or Specific Requirement: Title 2 of the Code of Federal Regulations (CFR) 200.302(b)(4) requires non-federal entities to maintain effective internal control over federal programs. Specifically, the organization must reconcile its federal awards with expenditures incurred and revenue received. Additionally, 2 CFR Part 200.510(b)(1-6) specifies that a Schedule of Expenditures of Federal Awards (SEFA) be prepared for each fiscal year in accordance with the applicable federal regulations. The SEFA must include, at a minimum, total federal awards expended for each individual federal program and must accurately report all federal expenditures received and expended during the fiscal year. Condition and Context: During the audit, it was noted that Solvista Health does not reconcile federal awards with the expenditures used and revenue earned. Additionally, Solvista Health did not prepare an accurate SEFA. Questioned Costs: N/A Cause: Solvista Health’s accounting and internal control systems were not designed and implemented to ensure reconciliation of federal awards with expenditures and revenue, and the preparation of an accurate SEFA. Effect: Failure to reconcile federal awards with expenditures and related revenue, along with the absence of an accurate SEFA, could lead to incorrect reporting of federal funds, misstatement of financial information, and non-compliance with federal requirements. This represents a potential risk for improper use of federal funds and an inability to meet compliance and reporting obligations. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend Solvista Health design and implement internal control procedures to reconcile federal awards with the expenditures and revenue received to ensure completeness and accuracy in financial reporting. Additionally, management should prepare and maintain an accurate SEFA in accordance with 2 CFR 200.510 to ensure proper documentation and compliance with federal reporting requirements. Additionally, we recommend that Solvista Health train appropriate personnel on the requirements related to federal award reconciliations and SEFA preparation to mitigate the risk of noncompliance in the future.
Criteria or Specific Requirement: Title 2 of the Code of Federal Regulations (CFR) 200.302(b)(4) requires non-federal entities to maintain effective internal control over federal programs. Specifically, the organization must reconcile its federal awards with expenditures incurred and revenue received. Additionally, 2 CFR Part 200.510(b)(1-6) specifies that a Schedule of Expenditures of Federal Awards (SEFA) be prepared for each fiscal year in accordance with the applicable federal regulations. The SEFA must include, at a minimum, total federal awards expended for each individual federal program and must accurately report all federal expenditures received and expended during the fiscal year. Condition and Context: During the audit, it was noted that Solvista Health does not reconcile federal awards with the expenditures used and revenue earned. Additionally, Solvista Health did not prepare an accurate SEFA. Questioned Costs: N/A Cause: Solvista Health’s accounting and internal control systems were not designed and implemented to ensure reconciliation of federal awards with expenditures and revenue, and the preparation of an accurate SEFA. Effect: Failure to reconcile federal awards with expenditures and related revenue, along with the absence of an accurate SEFA, could lead to incorrect reporting of federal funds, misstatement of financial information, and non-compliance with federal requirements. This represents a potential risk for improper use of federal funds and an inability to meet compliance and reporting obligations. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend Solvista Health design and implement internal control procedures to reconcile federal awards with the expenditures and revenue received to ensure completeness and accuracy in financial reporting. Additionally, management should prepare and maintain an accurate SEFA in accordance with 2 CFR 200.510 to ensure proper documentation and compliance with federal reporting requirements. Additionally, we recommend that Solvista Health train appropriate personnel on the requirements related to federal award reconciliations and SEFA preparation to mitigate the risk of noncompliance in the future.
Criteria or Specific Requirement: Title 2 of the Code of Federal Regulations (CFR) 200.302(b)(4) requires non-federal entities to maintain effective internal control over federal programs. Specifically, the organization must reconcile its federal awards with expenditures incurred and revenue received. Additionally, 2 CFR Part 200.510(b)(1-6) specifies that a Schedule of Expenditures of Federal Awards (SEFA) be prepared for each fiscal year in accordance with the applicable federal regulations. The SEFA must include, at a minimum, total federal awards expended for each individual federal program and must accurately report all federal expenditures received and expended during the fiscal year. Condition and Context: During the audit, it was noted that Solvista Health does not reconcile federal awards with the expenditures used and revenue earned. Additionally, Solvista Health did not prepare an accurate SEFA. Questioned Costs: N/A Cause: Solvista Health’s accounting and internal control systems were not designed and implemented to ensure reconciliation of federal awards with expenditures and revenue, and the preparation of an accurate SEFA. Effect: Failure to reconcile federal awards with expenditures and related revenue, along with the absence of an accurate SEFA, could lead to incorrect reporting of federal funds, misstatement of financial information, and non-compliance with federal requirements. This represents a potential risk for improper use of federal funds and an inability to meet compliance and reporting obligations. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend Solvista Health design and implement internal control procedures to reconcile federal awards with the expenditures and revenue received to ensure completeness and accuracy in financial reporting. Additionally, management should prepare and maintain an accurate SEFA in accordance with 2 CFR 200.510 to ensure proper documentation and compliance with federal reporting requirements. Additionally, we recommend that Solvista Health train appropriate personnel on the requirements related to federal award reconciliations and SEFA preparation to mitigate the risk of noncompliance in the future.
Criteria or Specific Requirement: Title 2 of the Code of Federal Regulations (CFR) 200.302(b)(4) requires non-federal entities to maintain effective internal control over federal programs. Specifically, the organization must reconcile its federal awards with expenditures incurred and revenue received. Additionally, 2 CFR Part 200.510(b)(1-6) specifies that a Schedule of Expenditures of Federal Awards (SEFA) be prepared for each fiscal year in accordance with the applicable federal regulations. The SEFA must include, at a minimum, total federal awards expended for each individual federal program and must accurately report all federal expenditures received and expended during the fiscal year. Condition and Context: During the audit, it was noted that Solvista Health does not reconcile federal awards with the expenditures used and revenue earned. Additionally, Solvista Health did not prepare an accurate SEFA. Questioned Costs: N/A Cause: Solvista Health’s accounting and internal control systems were not designed and implemented to ensure reconciliation of federal awards with expenditures and revenue, and the preparation of an accurate SEFA. Effect: Failure to reconcile federal awards with expenditures and related revenue, along with the absence of an accurate SEFA, could lead to incorrect reporting of federal funds, misstatement of financial information, and non-compliance with federal requirements. This represents a potential risk for improper use of federal funds and an inability to meet compliance and reporting obligations. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend Solvista Health design and implement internal control procedures to reconcile federal awards with the expenditures and revenue received to ensure completeness and accuracy in financial reporting. Additionally, management should prepare and maintain an accurate SEFA in accordance with 2 CFR 200.510 to ensure proper documentation and compliance with federal reporting requirements. Additionally, we recommend that Solvista Health train appropriate personnel on the requirements related to federal award reconciliations and SEFA preparation to mitigate the risk of noncompliance in the future.
Criteria or Specific Requirement: 2 CFR 200.302(b)(4) requires non-federal entities to maintain effective internal control over federal programs. Specifically, the organization must reconcile its federal awards with expenditures incurred and revenue received. Additionally, 2 CFR Part 200.510(b)(1-6) mandates that a Schedule of Expenditures of Federal Awards (SEFA) be prepared for each fiscal year in accordance with the applicable federal regulations. The SEFA must include, at a minimum, total federal awards expended for each individual federal program and must accurately report all federal expenditures received and expended during the fiscal year. Condition and Context: During our audit procedures performed over the current year SEFA, it was noted that Solvista Health improperly excluded expenditures for two federal awards from its June 30, 2023 SEFA. Questioned Costs: N/A Cause: Solvista Health’s accounting and internal control systems were not designed and implemented to ensure reconciliation of federal awards with expenditures and revenue, and the preparation of an accurate SEFA. Effect: Failure to reconcile federal awards with expenditures, along with an incomplete and inaccurate SEFA, could lead to incorrect reporting of federal funds, misstatement of financial information, and noncompliance with federal requirements. This represents a potential risk for improper use of federal funds and an inability to meet compliance and reporting obligations. Additionally, the omission of federal awards from the June 30, 2023 SEFA resulted in noncompliance with federal reporting requirements and inaccurate representation of Solvista Health’s federal award activity. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend Solvista Health design and implement internal control procedures to reconcile federal awards with the expenditures and revenue received to ensure completeness and accuracy in financial reporting. Additionally, management should prepare and maintain an accurate SEFA in accordance with 2 CFR 200.510 to ensure proper documentation and compliance with federal reporting requirements. Additionally, we recommend that Solvista Health train appropriate personnel on the requirements related to federal award reconciliations and SEFA preparation to mitigate the risk of noncompliance in the future.
Criteria or Specific Requirement: 2 CFR 200.302(b)(4) requires non-federal entities to maintain effective internal control over federal programs. Specifically, the organization must reconcile its federal awards with expenditures incurred and revenue received. Additionally, 2 CFR Part 200.510(b)(1-6) mandates that a Schedule of Expenditures of Federal Awards (SEFA) be prepared for each fiscal year in accordance with the applicable federal regulations. The SEFA must include, at a minimum, total federal awards expended for each individual federal program and must accurately report all federal expenditures received and expended during the fiscal year. Condition and Context: During our audit procedures performed over the current year SEFA, it was noted that Solvista Health improperly excluded expenditures for two federal awards from its June 30, 2023 SEFA. Questioned Costs: N/A Cause: Solvista Health’s accounting and internal control systems were not designed and implemented to ensure reconciliation of federal awards with expenditures and revenue, and the preparation of an accurate SEFA. Effect: Failure to reconcile federal awards with expenditures, along with an incomplete and inaccurate SEFA, could lead to incorrect reporting of federal funds, misstatement of financial information, and noncompliance with federal requirements. This represents a potential risk for improper use of federal funds and an inability to meet compliance and reporting obligations. Additionally, the omission of federal awards from the June 30, 2023 SEFA resulted in noncompliance with federal reporting requirements and inaccurate representation of Solvista Health’s federal award activity. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend Solvista Health design and implement internal control procedures to reconcile federal awards with the expenditures and revenue received to ensure completeness and accuracy in financial reporting. Additionally, management should prepare and maintain an accurate SEFA in accordance with 2 CFR 200.510 to ensure proper documentation and compliance with federal reporting requirements. Additionally, we recommend that Solvista Health train appropriate personnel on the requirements related to federal award reconciliations and SEFA preparation to mitigate the risk of noncompliance in the future.
Condition: The Organization tracks grants by individual cost-centers, which allows for total revenue and total expenditures by grant to be easily identifiable. In preparation of the Schedule of Expenditures of Federal Awards (SEFA), the Organization did not include a significant grant that is sourced from federal funds and required for testing. Criteria: Section 2 CFR 200.510(b) of the Uniform Guidance requires that an auditee prepare a schedule of expenditures of federal awards, which includes individual federal programs by federal agency and total federal awards expended for each individual federal program and Assistance Listing Number. Management is responsible for establishing and maintaining an effective system of internal control to allow for complete and accurate preparation of the SEFA. Cause: The Organization received a new one-time agreement during 2024, and the granting agency did not provide sufficient information for the Organization to clarify the funds were derived from federal funds. As such, the finance team did not include the grant expenditures in the schedule of expenditures of federal awards. Effect: Inaccurate reporting of federal expenditures could result inaccurate major program determinations, risk assessments, identification of compliance requirements, and ultimately incomplete reporting of federal funds expended to granting agencies. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Findings From Prior Year: No. Recommendation: We recommend management review all new grant agreements for indicators of federal awards (such as an Assistance Listing or CFDA number, references to federal regulations, references to federal laws or bills, etc.), and communicate with granting agencies for clarity. We recommend management receive confirmation in writing from any granting agencies about the source of any grants, when there is doubt about whether a grant is federally-sourced or not. Management Response: Management agrees with the recommendation and will ensure both program and financial staff understand the importance of determining the source of new grant funds, to ensure the schedule of expenditure of federal awards is accurately prepared.
PREPARATION OF SCHEDULE OF EXPENDITURES AND FEDERAL AWARDS QUESTIONED COSTS: N/A Criteria: The Uniform Guidance Subpart F section 200.510 requires the preparation of the Schedule of Expenditures of Federal Awards (SEFA) that includes an accurate reporting of federal awards expended based on the terms and conditions of the grants along with the amount of funds disbursed to sub-recipients. In order for the SEFA to be prepared accurately and properly report the amounts expended for federal awards, a system of controls should be in existence that includes the identification of federal expenditures, timely and accurate preparation and review of the amounts reported on the SEFA. Condition: The initial SEFA prepared by the School Bord’s did not accurately include or identify all the federal award expenditures. The initial SEFA provided for audit included $119,736,508 of expenditures while the final SEFA included $186,491,326. This finding is repeated from the prior year. See the Summary Schedule of Prior Year Findings and Questioned Cost item 2023-003. Universe/ Population: None Sample size: None Cause: The grant awards or agreements were not properly interpreted or reviewed to identify or determine the proper amount to be reported as expenditures or SEFA. The 2 CFR Part 200, Appendix XI, Compliance Supplement publishes and distributed by the President of the United States’ Office of Management and Budget includes requirements for SEFA reporting that were not complied with. Effect: The SEFA provided to us for audit did not contain all the federal programs or the correct amounts of federal expenditures based on the terms of the grant awards and requirements to reporting on some of the federal programs reported. Inaccuracies or excluding information on the SEFA causes delays in completing the single audit and risks filing a SEFA that is incomplete or inaccurate. In addition, auditors may not identify and test the correct major federal programs in accordance with the Uniform Guidance. Recommendation: The School Board should strengthen its controls including its review and approval processes over the identification of federal programs, and the information and balances that are accumulated and reported on the SEFA to make sure the expenditures reported are an accurate representation of federal expenditures. View of Responsible Official: Management agrees with finding. Disaster Grants through FEMA are managed by rules and processes that are not easily accounted for in traditional accounting systems. Procedures will be strengthened to fully and accurately identify all federal program expenditures and record in the appropriate accounting funds.
Assistance Listing Number, Federal Agency, and Program Name 21.011, U.S. Department of the Treasury Capital Magnet Fund Federal Award Identification Number and Year Year ended June 30, 2024 Pass through Entity Ohio Department of Development Supportive Housing Program Finding Type Significant deficiency Repeat Finding No Criteria Per 2 CFR Section 200.510(b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended determined in accordance with Section 200.502. Condition The expenditures were reported for the Capital Magnet Fund throughout the award period from the year ended June 30, 2019 to the year ended June 30, 2024 on the schedule of expenditures of federal awards (SEFA) but did not accurately report the amount of administrative expenditures incurred during the performance period, and, therefore, the SEFA was not complete and accurate for the year ended June 30, 2019 to the year ended June 30, 2024. Questioned Costs None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs were Undetermined or Otherwise Could Not be Reported N/A Identification of How Questioned Costs Were Computed N/A Context The Organization did not accurately report the administration costs on the SEFA. The Organization incorrectly omitted $375,000 of administration costs that were incurred during the year ended June 30, 2019; however, management implemented controls during the year ended June 30, 2024 that discovered the error, and, therefore, the $375,000 of omitted costs were included on the SEFA during the year ended June 30, 2024. Cause and Effect The Organization did not review all previously reported expenditures on the schedule of expenditures of federal awards for the Capital Magnet Program over the award period and omitted $375,000 of expenditures related to funding received from the Capital Magnet Fund for administrative costs. Recommendation We recommend the Organization implement a process and controls to have additional review of the SEFA compared to the Capital Magnet Performance Report to ensure the expenditures on the SEFA are complete and accurate and any errors are discovered and corrected timely. Views of Responsible Officials and Corrective Action Plan Management has implemented procedures and controls to ensure reports are reviewed prior to submission and distributed funds are reported properly and in the correct period.
Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Evaluation of Finding Material Weakness and Noncompliance – Various Federal Programs Criteria According to the Government Auditing Standards (Yellow Book) and the Uniform Guidance, 2 CFR Part 200, Subpart F—Audit Requirements, sections 200.508 and 200.510, entities receiving federal awards must prepare and submit a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) as part of their annual financial reporting. This schedule is crucial for auditors to determine major programs and conduct the necessary audits in compliance with federal regulations. Condition The City failed to provide a complete SEFA for the fiscal year, leading to inaccuracies pertaining to the ARPA program. This omission resulted in a direct impact on the determination of major programs. Cause The incomplete SEFA was caused by a lack of oversight and insufficient internal controls within the City's financial management department. Effect or Potential Effect The failure to provide a complete SEFA has significant implications, including: • Inaccurate determination of major programs, which can affect the scope and quality of the audit process. • Increased risk of non-compliance with federal regulations, potentially leading to financial penalties and loss of federal funding. Context The City did not submit a complete SEFA for the year ended June 30, 2024, as required by federal guidelines. This incomplete reporting could compromise transparency, affect audit procedures, and hinder compliance with federal regulations. Repeat Finding Yes, in relation to reconciliation of grant activity. Recommendation To address this material weakness, the following actions are recommended: • Develop detailed procedures and timelines: Establish and enforce comprehensive procedures and timelines for the preparation and submission of the SEFA to ensure completeness and accuracy. • Enhance staffing and resources: Allocate adequate staffing and resources to the financial management department to support the accurate compilation and timely submission of the SEFA. • Provide comprehensive training: Offer training to financial management staff on the requirements and importance of the SEFA, including techniques for ensuring its accuracy and completeness.. • Regularly audit the SEFA preparation process: Conduct regular audits of the SEFA preparation process to ensure compliance with established policies and procedures and address any deficiencies promptly. This should be completed monthly and at a minimum quarterly. By implementing these recommendations, the City can strengthen its internal controls, improve the accuracy of its financial reporting, and ensure compliance with Government Auditing Standards and other regulatory requirements. Management Response Management agrees with the finding and recommendations. The City will begin to implement policies and procedures to assist with monthly reconciliations and review processes to mitigate these errors in the future. Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Material Weakness and Noncompliance Assistance Listing Number: All Federal Programs reported on the SEFA Criteria Refer to finding 2024-005 in section II above. Condition Refer to finding 2024-005 in section II above. Cause of Condition Refer to finding 2024-005 in section II above. Effect or Potential Effect of Condition Refer to finding 2024-005 in section II above. Questioned costs None. Context Refer to finding 2024-005 in section II above. Repeat Finding Refer to finding 2024-005 in section II above. Recommendation Refer to finding 2024-005 in section II above. Management Response Refer to finding 2024-005 in section II above.
Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Evaluation of Finding Material Weakness and Noncompliance – Various Federal Programs Criteria According to the Government Auditing Standards (Yellow Book) and the Uniform Guidance, 2 CFR Part 200, Subpart F—Audit Requirements, sections 200.508 and 200.510, entities receiving federal awards must prepare and submit a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) as part of their annual financial reporting. This schedule is crucial for auditors to determine major programs and conduct the necessary audits in compliance with federal regulations. Condition The City failed to provide a complete SEFA for the fiscal year, leading to inaccuracies pertaining to the ARPA program. This omission resulted in a direct impact on the determination of major programs. Cause The incomplete SEFA was caused by a lack of oversight and insufficient internal controls within the City's financial management department. Effect or Potential Effect The failure to provide a complete SEFA has significant implications, including: • Inaccurate determination of major programs, which can affect the scope and quality of the audit process. • Increased risk of non-compliance with federal regulations, potentially leading to financial penalties and loss of federal funding. Context The City did not submit a complete SEFA for the year ended June 30, 2024, as required by federal guidelines. This incomplete reporting could compromise transparency, affect audit procedures, and hinder compliance with federal regulations. Repeat Finding Yes, in relation to reconciliation of grant activity. Recommendation To address this material weakness, the following actions are recommended: • Develop detailed procedures and timelines: Establish and enforce comprehensive procedures and timelines for the preparation and submission of the SEFA to ensure completeness and accuracy. • Enhance staffing and resources: Allocate adequate staffing and resources to the financial management department to support the accurate compilation and timely submission of the SEFA. • Provide comprehensive training: Offer training to financial management staff on the requirements and importance of the SEFA, including techniques for ensuring its accuracy and completeness.. • Regularly audit the SEFA preparation process: Conduct regular audits of the SEFA preparation process to ensure compliance with established policies and procedures and address any deficiencies promptly. This should be completed monthly and at a minimum quarterly. By implementing these recommendations, the City can strengthen its internal controls, improve the accuracy of its financial reporting, and ensure compliance with Government Auditing Standards and other regulatory requirements. Management Response Management agrees with the finding and recommendations. The City will begin to implement policies and procedures to assist with monthly reconciliations and review processes to mitigate these errors in the future. Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Material Weakness and Noncompliance Assistance Listing Number: All Federal Programs reported on the SEFA Criteria Refer to finding 2024-005 in section II above. Condition Refer to finding 2024-005 in section II above. Cause of Condition Refer to finding 2024-005 in section II above. Effect or Potential Effect of Condition Refer to finding 2024-005 in section II above. Questioned costs None. Context Refer to finding 2024-005 in section II above. Repeat Finding Refer to finding 2024-005 in section II above. Recommendation Refer to finding 2024-005 in section II above. Management Response Refer to finding 2024-005 in section II above.
Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Evaluation of Finding Material Weakness and Noncompliance – Various Federal Programs Criteria According to the Government Auditing Standards (Yellow Book) and the Uniform Guidance, 2 CFR Part 200, Subpart F—Audit Requirements, sections 200.508 and 200.510, entities receiving federal awards must prepare and submit a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) as part of their annual financial reporting. This schedule is crucial for auditors to determine major programs and conduct the necessary audits in compliance with federal regulations. Condition The City failed to provide a complete SEFA for the fiscal year, leading to inaccuracies pertaining to the ARPA program. This omission resulted in a direct impact on the determination of major programs. Cause The incomplete SEFA was caused by a lack of oversight and insufficient internal controls within the City's financial management department. Effect or Potential Effect The failure to provide a complete SEFA has significant implications, including: • Inaccurate determination of major programs, which can affect the scope and quality of the audit process. • Increased risk of non-compliance with federal regulations, potentially leading to financial penalties and loss of federal funding. Context The City did not submit a complete SEFA for the year ended June 30, 2024, as required by federal guidelines. This incomplete reporting could compromise transparency, affect audit procedures, and hinder compliance with federal regulations. Repeat Finding Yes, in relation to reconciliation of grant activity. Recommendation To address this material weakness, the following actions are recommended: • Develop detailed procedures and timelines: Establish and enforce comprehensive procedures and timelines for the preparation and submission of the SEFA to ensure completeness and accuracy. • Enhance staffing and resources: Allocate adequate staffing and resources to the financial management department to support the accurate compilation and timely submission of the SEFA. • Provide comprehensive training: Offer training to financial management staff on the requirements and importance of the SEFA, including techniques for ensuring its accuracy and completeness.. • Regularly audit the SEFA preparation process: Conduct regular audits of the SEFA preparation process to ensure compliance with established policies and procedures and address any deficiencies promptly. This should be completed monthly and at a minimum quarterly. By implementing these recommendations, the City can strengthen its internal controls, improve the accuracy of its financial reporting, and ensure compliance with Government Auditing Standards and other regulatory requirements. Management Response Management agrees with the finding and recommendations. The City will begin to implement policies and procedures to assist with monthly reconciliations and review processes to mitigate these errors in the future. Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Material Weakness and Noncompliance Assistance Listing Number: All Federal Programs reported on the SEFA Criteria Refer to finding 2024-005 in section II above. Condition Refer to finding 2024-005 in section II above. Cause of Condition Refer to finding 2024-005 in section II above. Effect or Potential Effect of Condition Refer to finding 2024-005 in section II above. Questioned costs None. Context Refer to finding 2024-005 in section II above. Repeat Finding Refer to finding 2024-005 in section II above. Recommendation Refer to finding 2024-005 in section II above. Management Response Refer to finding 2024-005 in section II above.
Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Evaluation of Finding Material Weakness and Noncompliance – Various Federal Programs Criteria According to the Government Auditing Standards (Yellow Book) and the Uniform Guidance, 2 CFR Part 200, Subpart F—Audit Requirements, sections 200.508 and 200.510, entities receiving federal awards must prepare and submit a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) as part of their annual financial reporting. This schedule is crucial for auditors to determine major programs and conduct the necessary audits in compliance with federal regulations. Condition The City failed to provide a complete SEFA for the fiscal year, leading to inaccuracies pertaining to the ARPA program. This omission resulted in a direct impact on the determination of major programs. Cause The incomplete SEFA was caused by a lack of oversight and insufficient internal controls within the City's financial management department. Effect or Potential Effect The failure to provide a complete SEFA has significant implications, including: • Inaccurate determination of major programs, which can affect the scope and quality of the audit process. • Increased risk of non-compliance with federal regulations, potentially leading to financial penalties and loss of federal funding. Context The City did not submit a complete SEFA for the year ended June 30, 2024, as required by federal guidelines. This incomplete reporting could compromise transparency, affect audit procedures, and hinder compliance with federal regulations. Repeat Finding Yes, in relation to reconciliation of grant activity. Recommendation To address this material weakness, the following actions are recommended: • Develop detailed procedures and timelines: Establish and enforce comprehensive procedures and timelines for the preparation and submission of the SEFA to ensure completeness and accuracy. • Enhance staffing and resources: Allocate adequate staffing and resources to the financial management department to support the accurate compilation and timely submission of the SEFA. • Provide comprehensive training: Offer training to financial management staff on the requirements and importance of the SEFA, including techniques for ensuring its accuracy and completeness.. • Regularly audit the SEFA preparation process: Conduct regular audits of the SEFA preparation process to ensure compliance with established policies and procedures and address any deficiencies promptly. This should be completed monthly and at a minimum quarterly. By implementing these recommendations, the City can strengthen its internal controls, improve the accuracy of its financial reporting, and ensure compliance with Government Auditing Standards and other regulatory requirements. Management Response Management agrees with the finding and recommendations. The City will begin to implement policies and procedures to assist with monthly reconciliations and review processes to mitigate these errors in the future. Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Material Weakness and Noncompliance Assistance Listing Number: All Federal Programs reported on the SEFA Criteria Refer to finding 2024-005 in section II above. Condition Refer to finding 2024-005 in section II above. Cause of Condition Refer to finding 2024-005 in section II above. Effect or Potential Effect of Condition Refer to finding 2024-005 in section II above. Questioned costs None. Context Refer to finding 2024-005 in section II above. Repeat Finding Refer to finding 2024-005 in section II above. Recommendation Refer to finding 2024-005 in section II above. Management Response Refer to finding 2024-005 in section II above.
Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Evaluation of Finding Material Weakness and Noncompliance – Various Federal Programs Criteria According to the Government Auditing Standards (Yellow Book) and the Uniform Guidance, 2 CFR Part 200, Subpart F—Audit Requirements, sections 200.508 and 200.510, entities receiving federal awards must prepare and submit a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) as part of their annual financial reporting. This schedule is crucial for auditors to determine major programs and conduct the necessary audits in compliance with federal regulations. Condition The City failed to provide a complete SEFA for the fiscal year, leading to inaccuracies pertaining to the ARPA program. This omission resulted in a direct impact on the determination of major programs. Cause The incomplete SEFA was caused by a lack of oversight and insufficient internal controls within the City's financial management department. Effect or Potential Effect The failure to provide a complete SEFA has significant implications, including: • Inaccurate determination of major programs, which can affect the scope and quality of the audit process. • Increased risk of non-compliance with federal regulations, potentially leading to financial penalties and loss of federal funding. Context The City did not submit a complete SEFA for the year ended June 30, 2024, as required by federal guidelines. This incomplete reporting could compromise transparency, affect audit procedures, and hinder compliance with federal regulations. Repeat Finding Yes, in relation to reconciliation of grant activity. Recommendation To address this material weakness, the following actions are recommended: • Develop detailed procedures and timelines: Establish and enforce comprehensive procedures and timelines for the preparation and submission of the SEFA to ensure completeness and accuracy. • Enhance staffing and resources: Allocate adequate staffing and resources to the financial management department to support the accurate compilation and timely submission of the SEFA. • Provide comprehensive training: Offer training to financial management staff on the requirements and importance of the SEFA, including techniques for ensuring its accuracy and completeness.. • Regularly audit the SEFA preparation process: Conduct regular audits of the SEFA preparation process to ensure compliance with established policies and procedures and address any deficiencies promptly. This should be completed monthly and at a minimum quarterly. By implementing these recommendations, the City can strengthen its internal controls, improve the accuracy of its financial reporting, and ensure compliance with Government Auditing Standards and other regulatory requirements. Management Response Management agrees with the finding and recommendations. The City will begin to implement policies and procedures to assist with monthly reconciliations and review processes to mitigate these errors in the future. Reference Number 2024-005 – Incomplete Schedule of Expenditures of Federal Awards Material Weakness and Noncompliance Assistance Listing Number: All Federal Programs reported on the SEFA Criteria Refer to finding 2024-005 in section II above. Condition Refer to finding 2024-005 in section II above. Cause of Condition Refer to finding 2024-005 in section II above. Effect or Potential Effect of Condition Refer to finding 2024-005 in section II above. Questioned costs None. Context Refer to finding 2024-005 in section II above. Repeat Finding Refer to finding 2024-005 in section II above. Recommendation Refer to finding 2024-005 in section II above. Management Response Refer to finding 2024-005 in section II above.
Condition: During our audit we reviewed the expenditures included on the Organization’s schedule of expenditures of federal awards. We noted the Organization did not include all federal expenditures incurred during the reporting period. Criteria: As described in 2 CFR § 200.510(b) the Organization is required to prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements. This schedule must include total federal awards expended. Cause: The Organization utilizes an outsourced accountants to assist with the management of the Organization’s finances. During the year the Organization received a grant related to the construction of a community center. The Organization hired another contractor to assist with the construction of the community center. There are multiple entities with unique understanding of the finances tied to the federal program selected for testing. Effect: Due to not including all federal expenditures on the schedule of expenditures of federal awards this caused the schedule to be understated to a material degree. Recommendation: After thoroughly reviewing the unique circumstance that led to this audit finding, we have determined that it is highly unlikely to recur. Given the organization's strong compliance history and familiarity with SEFA reporting under Uniform Guidance, we do not see a cost-effective benefit to revamping internal controls specifically for this issue. Instead, we recommend continuing to; review government awards, provide refresher trainings to staff, and conduct periodic reviews of internal controls to ensure ongoing compliance. These measures will effectively address the finding without incurring unnecessary costs. Views of Resposible Officials: Management agrees with the finding.
2024-001 Improve Internal Controls over the Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Federal Program(s) Information Federal Agency: Environmental Protection Agency Award Name: Drinking Water State Revolving Fund Assistance Listing Number: 66.468 Award Year: 2024 Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Per 2 CFR 200.510(b), auditees must prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The SEFA must identify all federal awards expended, organized by federal program and Assistance Listing Number (ALN), and include all required disclosures. Condition and Context While preparing its draft SEFA, the City incorrectly classified $3,473,784 in federal expenditures as Drinking Water State Revolving Fund when those expenditures should have been classified as Coronavirus State and Local Fiscal Recovery Fund program expenditures. As a result of the initial improper expenditure amounts, the auditors’ assessment over major program determination was impacted. The misclassification was limited to the preparation of the SEFA and there was no impact on amounts reported to and/or claims for reimbursement from the respective funding source(s). This classification error was corrected for purposes of the final SEFA. Cause The City did not have adequate controls in place in order to ensure the complete and accurate preparation of the SEFA, including reconciling federal expenditures reported in the general ledger with the information included on the SEFA and verifying the correct allocation to the proper federal programs. SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (CONTINUED) Effect or Potential Effect Due to the weakness in internal controls noted above, there is a risk that amounts reported on the SEFA are not complete and accurate. The lack of a complete and accurate SEFA may impact the determination if a single audit is required, as well as major program determination. Recommendation The City should ensure that adequate procedures and controls are in place to ensure that the SEFA is complete and accurate. This should include controls requiring the reconciliation of federal expenditures to the appropriate supporting documentation (e.g., general ledger, grant reports, etc.) and formal review by a knowledgeable individual following preparation of the SEFA. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.
Finding 2024-004 Accounting for Grants, Schedule of Expenditures of Federal Awards, and Fiscal Man-agement (Material Weakness) Assistance Listing Number and Title: 84.041 Impact Aid Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: CFR Part 200.508, CFR Part 200.510, Auditee Responsibilities state that the auditee must prepare the Sched-ule of Expenditures of Federal Awards, which must list individual Federal awards by Federal Agency, including the to-tal Federal awards expended, name of the pass-through entity, CFDA number, and total amount provided to subrecipi-ents. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was presented for audit with values that were not reconciled with the general ledger, and contained inaccuracies, including: • Overclaimed revenues for Title I • Inability to provide sufficient documentation of Impact Aid revenues and specific Impact Aid program infor-mation • Incorrect reporting of state and federal revenues for National School Lunch Program. Cause: The District does not have effective internal control over the preparation of the Schedule of Expenditures of Federal Awards. The district did not reconcile the expenditures reported on the SEFA with the amounts reported on the district's general ledger. Effect or Potential Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected and corrected. Because the SEFA was completed incorrectly, and not reconciled to the general ledger, the financial statements were materially misstated prior to the auditor's adjust-ments. Questioned Cost: No Context: Lack of adequate controls over the Schedule of Expenditures of Federal Awards and related accounting re-sulted in the following: SEFA was originally presented for auditors with incorrect information, and not reconciled to the general ledger Repeat of a Prior-Year Finding: No Recommendation: We recommend that the District establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Internal controls should be designed to prevent, detect, or cor-rect errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The District should provide appropriate training to staff who are assigned to prepare and re-view the SEFA. District’s Response: The District acknowledges the deficiencies. Corrective Action Plan: The District will establish policies and procedures to ensure that all Federal awards are identi-fied and reported accurately on future SEFAs. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager Section IV—Summary Schedule of Prior Audit Findings There were no findings for the fiscal year ended June 30, 2023.
Finding 2024-004 Accounting for Grants, Schedule of Expenditures of Federal Awards, and Fiscal Man-agement (Material Weakness) Assistance Listing Number and Title: 84.041 Impact Aid Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: CFR Part 200.508, CFR Part 200.510, Auditee Responsibilities state that the auditee must prepare the Sched-ule of Expenditures of Federal Awards, which must list individual Federal awards by Federal Agency, including the to-tal Federal awards expended, name of the pass-through entity, CFDA number, and total amount provided to subrecipi-ents. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was presented for audit with values that were not reconciled with the general ledger, and contained inaccuracies, including: • Overclaimed revenues for Title I • Inability to provide sufficient documentation of Impact Aid revenues and specific Impact Aid program infor-mation • Incorrect reporting of state and federal revenues for National School Lunch Program. Cause: The District does not have effective internal control over the preparation of the Schedule of Expenditures of Federal Awards. The district did not reconcile the expenditures reported on the SEFA with the amounts reported on the district's general ledger. Effect or Potential Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected and corrected. Because the SEFA was completed incorrectly, and not reconciled to the general ledger, the financial statements were materially misstated prior to the auditor's adjust-ments. Questioned Cost: No Context: Lack of adequate controls over the Schedule of Expenditures of Federal Awards and related accounting re-sulted in the following: SEFA was originally presented for auditors with incorrect information, and not reconciled to the general ledger Repeat of a Prior-Year Finding: No Recommendation: We recommend that the District establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Internal controls should be designed to prevent, detect, or cor-rect errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The District should provide appropriate training to staff who are assigned to prepare and re-view the SEFA. District’s Response: The District acknowledges the deficiencies. Corrective Action Plan: The District will establish policies and procedures to ensure that all Federal awards are identi-fied and reported accurately on future SEFAs. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager Section IV—Summary Schedule of Prior Audit Findings There were no findings for the fiscal year ended June 30, 2023.
Finding 2024-004 Accounting for Grants, Schedule of Expenditures of Federal Awards, and Fiscal Man-agement (Material Weakness) Assistance Listing Number and Title: 84.041 Impact Aid Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: CFR Part 200.508, CFR Part 200.510, Auditee Responsibilities state that the auditee must prepare the Sched-ule of Expenditures of Federal Awards, which must list individual Federal awards by Federal Agency, including the to-tal Federal awards expended, name of the pass-through entity, CFDA number, and total amount provided to subrecipi-ents. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was presented for audit with values that were not reconciled with the general ledger, and contained inaccuracies, including: • Overclaimed revenues for Title I • Inability to provide sufficient documentation of Impact Aid revenues and specific Impact Aid program infor-mation • Incorrect reporting of state and federal revenues for National School Lunch Program. Cause: The District does not have effective internal control over the preparation of the Schedule of Expenditures of Federal Awards. The district did not reconcile the expenditures reported on the SEFA with the amounts reported on the district's general ledger. Effect or Potential Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected and corrected. Because the SEFA was completed incorrectly, and not reconciled to the general ledger, the financial statements were materially misstated prior to the auditor's adjust-ments. Questioned Cost: No Context: Lack of adequate controls over the Schedule of Expenditures of Federal Awards and related accounting re-sulted in the following: SEFA was originally presented for auditors with incorrect information, and not reconciled to the general ledger Repeat of a Prior-Year Finding: No Recommendation: We recommend that the District establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Internal controls should be designed to prevent, detect, or cor-rect errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The District should provide appropriate training to staff who are assigned to prepare and re-view the SEFA. District’s Response: The District acknowledges the deficiencies. Corrective Action Plan: The District will establish policies and procedures to ensure that all Federal awards are identi-fied and reported accurately on future SEFAs. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager Section IV—Summary Schedule of Prior Audit Findings There were no findings for the fiscal year ended June 30, 2023.
Finding 2024-004 Accounting for Grants, Schedule of Expenditures of Federal Awards, and Fiscal Man-agement (Material Weakness) Assistance Listing Number and Title: 84.041 Impact Aid Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: CFR Part 200.508, CFR Part 200.510, Auditee Responsibilities state that the auditee must prepare the Sched-ule of Expenditures of Federal Awards, which must list individual Federal awards by Federal Agency, including the to-tal Federal awards expended, name of the pass-through entity, CFDA number, and total amount provided to subrecipi-ents. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was presented for audit with values that were not reconciled with the general ledger, and contained inaccuracies, including: • Overclaimed revenues for Title I • Inability to provide sufficient documentation of Impact Aid revenues and specific Impact Aid program infor-mation • Incorrect reporting of state and federal revenues for National School Lunch Program. Cause: The District does not have effective internal control over the preparation of the Schedule of Expenditures of Federal Awards. The district did not reconcile the expenditures reported on the SEFA with the amounts reported on the district's general ledger. Effect or Potential Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected and corrected. Because the SEFA was completed incorrectly, and not reconciled to the general ledger, the financial statements were materially misstated prior to the auditor's adjust-ments. Questioned Cost: No Context: Lack of adequate controls over the Schedule of Expenditures of Federal Awards and related accounting re-sulted in the following: SEFA was originally presented for auditors with incorrect information, and not reconciled to the general ledger Repeat of a Prior-Year Finding: No Recommendation: We recommend that the District establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Internal controls should be designed to prevent, detect, or cor-rect errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The District should provide appropriate training to staff who are assigned to prepare and re-view the SEFA. District’s Response: The District acknowledges the deficiencies. Corrective Action Plan: The District will establish policies and procedures to ensure that all Federal awards are identi-fied and reported accurately on future SEFAs. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager Section IV—Summary Schedule of Prior Audit Findings There were no findings for the fiscal year ended June 30, 2023.
Finding 2024-004 Accounting for Grants, Schedule of Expenditures of Federal Awards, and Fiscal Man-agement (Material Weakness) Assistance Listing Number and Title: 84.041 Impact Aid Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: CFR Part 200.508, CFR Part 200.510, Auditee Responsibilities state that the auditee must prepare the Sched-ule of Expenditures of Federal Awards, which must list individual Federal awards by Federal Agency, including the to-tal Federal awards expended, name of the pass-through entity, CFDA number, and total amount provided to subrecipi-ents. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was presented for audit with values that were not reconciled with the general ledger, and contained inaccuracies, including: • Overclaimed revenues for Title I • Inability to provide sufficient documentation of Impact Aid revenues and specific Impact Aid program infor-mation • Incorrect reporting of state and federal revenues for National School Lunch Program. Cause: The District does not have effective internal control over the preparation of the Schedule of Expenditures of Federal Awards. The district did not reconcile the expenditures reported on the SEFA with the amounts reported on the district's general ledger. Effect or Potential Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected and corrected. Because the SEFA was completed incorrectly, and not reconciled to the general ledger, the financial statements were materially misstated prior to the auditor's adjust-ments. Questioned Cost: No Context: Lack of adequate controls over the Schedule of Expenditures of Federal Awards and related accounting re-sulted in the following: SEFA was originally presented for auditors with incorrect information, and not reconciled to the general ledger Repeat of a Prior-Year Finding: No Recommendation: We recommend that the District establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Internal controls should be designed to prevent, detect, or cor-rect errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The District should provide appropriate training to staff who are assigned to prepare and re-view the SEFA. District’s Response: The District acknowledges the deficiencies. Corrective Action Plan: The District will establish policies and procedures to ensure that all Federal awards are identi-fied and reported accurately on future SEFAs. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager Section IV—Summary Schedule of Prior Audit Findings There were no findings for the fiscal year ended June 30, 2023.
Finding 2024-004 Accounting for Grants, Schedule of Expenditures of Federal Awards, and Fiscal Man-agement (Material Weakness) Assistance Listing Number and Title: 84.041 Impact Aid Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: CFR Part 200.508, CFR Part 200.510, Auditee Responsibilities state that the auditee must prepare the Sched-ule of Expenditures of Federal Awards, which must list individual Federal awards by Federal Agency, including the to-tal Federal awards expended, name of the pass-through entity, CFDA number, and total amount provided to subrecipi-ents. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was presented for audit with values that were not reconciled with the general ledger, and contained inaccuracies, including: • Overclaimed revenues for Title I • Inability to provide sufficient documentation of Impact Aid revenues and specific Impact Aid program infor-mation • Incorrect reporting of state and federal revenues for National School Lunch Program. Cause: The District does not have effective internal control over the preparation of the Schedule of Expenditures of Federal Awards. The district did not reconcile the expenditures reported on the SEFA with the amounts reported on the district's general ledger. Effect or Potential Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected and corrected. Because the SEFA was completed incorrectly, and not reconciled to the general ledger, the financial statements were materially misstated prior to the auditor's adjust-ments. Questioned Cost: No Context: Lack of adequate controls over the Schedule of Expenditures of Federal Awards and related accounting re-sulted in the following: SEFA was originally presented for auditors with incorrect information, and not reconciled to the general ledger Repeat of a Prior-Year Finding: No Recommendation: We recommend that the District establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Internal controls should be designed to prevent, detect, or cor-rect errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The District should provide appropriate training to staff who are assigned to prepare and re-view the SEFA. District’s Response: The District acknowledges the deficiencies. Corrective Action Plan: The District will establish policies and procedures to ensure that all Federal awards are identi-fied and reported accurately on future SEFAs. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager Section IV—Summary Schedule of Prior Audit Findings There were no findings for the fiscal year ended June 30, 2023.
Finding 2024-004 Accounting for Grants, Schedule of Expenditures of Federal Awards, and Fiscal Man-agement (Material Weakness) Assistance Listing Number and Title: 84.041 Impact Aid Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 84.010 Title I Name of Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 10.553 and 10.555 National School Lunch Breakfast and Lunch Name of Federal Agency: U.S. Department of Agriculture Criteria: CFR Part 200.508, CFR Part 200.510, Auditee Responsibilities state that the auditee must prepare the Sched-ule of Expenditures of Federal Awards, which must list individual Federal awards by Federal Agency, including the to-tal Federal awards expended, name of the pass-through entity, CFDA number, and total amount provided to subrecipi-ents. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was presented for audit with values that were not reconciled with the general ledger, and contained inaccuracies, including: • Overclaimed revenues for Title I • Inability to provide sufficient documentation of Impact Aid revenues and specific Impact Aid program infor-mation • Incorrect reporting of state and federal revenues for National School Lunch Program. Cause: The District does not have effective internal control over the preparation of the Schedule of Expenditures of Federal Awards. The district did not reconcile the expenditures reported on the SEFA with the amounts reported on the district's general ledger. Effect or Potential Effect: Potential understatement or overstatement of expenditures could exist in the Schedule of Expenditures of Federal Awards and not be detected and corrected. Because the SEFA was completed incorrectly, and not reconciled to the general ledger, the financial statements were materially misstated prior to the auditor's adjust-ments. Questioned Cost: No Context: Lack of adequate controls over the Schedule of Expenditures of Federal Awards and related accounting re-sulted in the following: SEFA was originally presented for auditors with incorrect information, and not reconciled to the general ledger Repeat of a Prior-Year Finding: No Recommendation: We recommend that the District establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Internal controls should be designed to prevent, detect, or cor-rect errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The District should provide appropriate training to staff who are assigned to prepare and re-view the SEFA. District’s Response: The District acknowledges the deficiencies. Corrective Action Plan: The District will establish policies and procedures to ensure that all Federal awards are identi-fied and reported accurately on future SEFAs. Planned Implementation Date: August 1, 2025 Responsible Person: District Business Manager Section IV—Summary Schedule of Prior Audit Findings There were no findings for the fiscal year ended June 30, 2023.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Finding 2024-003 – Preparation of Schedule of Expenditures of Federal Awards (SEFA) (Material Weakness) (Repeat Finding) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2023-2024 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly included Federal expenditures from AL No. 20.507 and AL No. 20.509 that were accrued and recorded in fiscal year 2023 in the amount of $2,160,408, and excluded expenditures from AL No. 20.507 Federal Transit Formula Grants in the amount of $2,924,012 and 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,259,151 on its preliminary SEFA. Cause of Condition The Agency’s existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $2,842,283; the final revised expenditures totaled $5,865,038. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan We acknowledge the findings regarding the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Management agrees that there were errors in the classification and reporting of federal expenditures during the fiscal year 2023-2024, which resulted from inadequate review controls and documentation procedures. The Agency is committed to enhancing internal controls and year-end closing processes to ensure that the SEFA is complete, accurate, and compliant with 2 CFR Part 200 requirements.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster Pass-through Entity: Michigan Department of Education Finding Type: Material weakness in internal controls over compliance. Repeat Finding: No Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502. Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention. Questioned Costs: None Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies: - $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA. - $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA. Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances. View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.
2024-001 – Reporting - Preparation of the Schedule of Expenditures of Federal Awards Identification of the Federal Program – Department of Housing and Urban Development - 14.128 Mortgage Insurance Hospitals - FHA Section 242 Mortgage Insurance Program Loan Criteria – CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards (Schedule) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502”. Also, in accordance with CFR Section §200.302, 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. Condition – We noted that there were adjustments needed to the Schedule to include initial debt issuance costs incurred and drawn during the period in connection with the new HUD mortgage secured during January 2024. Cause – Internal controls over review of the completeness of the Schedule were not properly implemented during the period of additional mortgages secured. Such internal controls were designed to require timely review of the completeness of the Schedule by appropriate personnel. Effect – The Schedule for the year ended June 30, 2024 inappropriately excluded $845,273 of related expenditures against the latest HUD mortgage established during January 2024. Questioned costs – none Context – Internal controls did not operate as intended to ensure the Schedule captured nonrecurring expenditures. In connection with securing the January 2024 HUD mortgage, certain debt issuance costs were charged against the mortgage upon closing. These expenditures were not part of the routine expenditure and draw processes and controls in place at the Authority due to their unique nature and infrequency. Therefore, management did not identify such initial closing costs for capture on the Schedule. Repeat finding – No Recommendation – We recommend the Schedule to be reviewed timely and with sufficient precision by the appropriate level of personnel and reconciliation of new HUD mortgage closing documents. View of Responsible Officials - Management agrees with the Federal Award Finding regarding the determination of when a Federal award is expended. As part of the Corrective Action Plan, management will validate mortgage activity against HUD mortgage provided information.
Criteria: 2 CFR section 200.510(b) requires the auditee to prepare a Schedule of Expenditures of Federal Awards (“SEFA”) that must contain all federal awards expended during the period. 2 CFR section 200.502 requires proper tracking and accounting of federal expenditures incurred under the same basis of accounting as the basic financial statements to ensure proper cutoff and reporting. Condition: The School failed to timely prepare a complete and accurate SEFA. Cause: The School did not have an adequate process to track expenditures of federal awards for which purchases were made on the School’s behalf by the pass-through grantor. This resulted in the School’s initial draft of their SEFA not including all federal expenditures made by the School. Effect: Failure to adequately track all expenditures of federal awards could result in the SEFA being prepared inaccurately or in an untimely manner. Recommendation: Marshall Jones recommends that the School establish a process to track the expenditures of federal awards during the year, including awards for which purchases are made on the School’s behalf by the pass-through grantor. This will better enable the School to timely prepare a complete and accurate SEFA. Views of Responsible Officials: Management of the School concurs with the finding. Please refer to the Corrective Action Plan.
Material Weakness in Internal Control Over Compliance Information on the Federal Programs: Assistance Listing Number 14.157 – Section 202 Supportive Housing for the Elderly, U.S. Department of Housing and Urban Development Assistance Listing Number 14.218 – Community Development Block Grants/Entitlement Grants, U.S. Department of Housing and Urban Development Assistance Listing Number 14.239 – HOME Investments Partnership Program, U.S. Department of Housing and Urban Development Criteria: The regulations in 2 CFR 200.510 requires the auditee to prepare a schedule of expenditures of Federal awards which includes the Federal awards expended for each individual Federal program and in total. Condition: For the year June 30, 2024, the unadjusted schedule of expenditures of Federal awards did not report the correct Federal awards expended for each individual Federal program or in total. Cause: Management does not have internal control over preparation of the schedule of expenditures of Federal awards or reconciliation of the reported expenditures to source documentation. Effect or Potential Effect: Material misstatements of the schedule of expenditures of Federal awards could be undetected and determination of major program(s) could be based on inaccurate information. Questioned Costs: None Context: This finding relates to all aspects of the schedule of expenditures of federal awards. Recommendation: We recommend that management develop and implement internal controls over the preparation of the schedule of expenditures of Federal awards. At a minimum, they should require identification of Federal award source documentation and documentation of how the expenditure amount reported for each was calculated. Views of Responsible Official: Management will develop internal controls and oversight over the schedule of expenditures of Federal awards.
Material Weakness in Internal Control Over Compliance Information on the Federal Programs: Assistance Listing Number 14.157 – Section 202 Supportive Housing for the Elderly, U.S. Department of Housing and Urban Development Assistance Listing Number 14.218 – Community Development Block Grants/Entitlement Grants, U.S. Department of Housing and Urban Development Assistance Listing Number 14.239 – HOME Investments Partnership Program, U.S. Department of Housing and Urban Development Criteria: The regulations in 2 CFR 200.510 requires the auditee to prepare a schedule of expenditures of Federal awards which includes the Federal awards expended for each individual Federal program and in total. Condition: For the year June 30, 2024, the unadjusted schedule of expenditures of Federal awards did not report the correct Federal awards expended for each individual Federal program or in total. Cause: Management does not have internal control over preparation of the schedule of expenditures of Federal awards or reconciliation of the reported expenditures to source documentation. Effect or Potential Effect: Material misstatements of the schedule of expenditures of Federal awards could be undetected and determination of major program(s) could be based on inaccurate information. Questioned Costs: None Context: This finding relates to all aspects of the schedule of expenditures of federal awards. Recommendation: We recommend that management develop and implement internal controls over the preparation of the schedule of expenditures of Federal awards. At a minimum, they should require identification of Federal award source documentation and documentation of how the expenditure amount reported for each was calculated. Views of Responsible Official: Management will develop internal controls and oversight over the schedule of expenditures of Federal awards.
Material Weakness in Internal Control Over Compliance Information on the Federal Programs: Assistance Listing Number 14.157 – Section 202 Supportive Housing for the Elderly, U.S. Department of Housing and Urban Development Assistance Listing Number 14.218 – Community Development Block Grants/Entitlement Grants, U.S. Department of Housing and Urban Development Assistance Listing Number 14.239 – HOME Investments Partnership Program, U.S. Department of Housing and Urban Development Criteria: The regulations in 2 CFR 200.510 requires the auditee to prepare a schedule of expenditures of Federal awards which includes the Federal awards expended for each individual Federal program and in total. Condition: For the year June 30, 2024, the unadjusted schedule of expenditures of Federal awards did not report the correct Federal awards expended for each individual Federal program or in total. Cause: Management does not have internal control over preparation of the schedule of expenditures of Federal awards or reconciliation of the reported expenditures to source documentation. Effect or Potential Effect: Material misstatements of the schedule of expenditures of Federal awards could be undetected and determination of major program(s) could be based on inaccurate information. Questioned Costs: None Context: This finding relates to all aspects of the schedule of expenditures of federal awards. Recommendation: We recommend that management develop and implement internal controls over the preparation of the schedule of expenditures of Federal awards. At a minimum, they should require identification of Federal award source documentation and documentation of how the expenditure amount reported for each was calculated. Views of Responsible Official: Management will develop internal controls and oversight over the schedule of expenditures of Federal awards.
Material Weakness in Internal Control Over Compliance Information on the Federal Programs: Assistance Listing Number 14.157 – Section 202 Supportive Housing for the Elderly, U.S. Department of Housing and Urban Development Assistance Listing Number 14.218 – Community Development Block Grants/Entitlement Grants, U.S. Department of Housing and Urban Development Assistance Listing Number 14.239 – HOME Investments Partnership Program, U.S. Department of Housing and Urban Development Criteria: The regulations in 2 CFR 200.510 requires the auditee to prepare a schedule of expenditures of Federal awards which includes the Federal awards expended for each individual Federal program and in total. Condition: For the year June 30, 2024, the unadjusted schedule of expenditures of Federal awards did not report the correct Federal awards expended for each individual Federal program or in total. Cause: Management does not have internal control over preparation of the schedule of expenditures of Federal awards or reconciliation of the reported expenditures to source documentation. Effect or Potential Effect: Material misstatements of the schedule of expenditures of Federal awards could be undetected and determination of major program(s) could be based on inaccurate information. Questioned Costs: None Context: This finding relates to all aspects of the schedule of expenditures of federal awards. Recommendation: We recommend that management develop and implement internal controls over the preparation of the schedule of expenditures of Federal awards. At a minimum, they should require identification of Federal award source documentation and documentation of how the expenditure amount reported for each was calculated. Views of Responsible Official: Management will develop internal controls and oversight over the schedule of expenditures of Federal awards.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.
2024-003 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness in Internal Controls over Compliance)—All Awards) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, £200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Condition and Context: The following errors were noted and corrected as a result of auditing procedures on the SEFA: • CRA program federal expenditures (CFDA #14.228) were understated by $23,893. • ACL Independent Living State Grants federal expenditures (CFDA #93.369) were overstated by $21,856 due to errors in SEFA preparation. • Several presentational errors including incorrect identifying numbers listed, incorrect award terms listed, and incorrect CFDA #’s listed for multiple awards. Cause: Insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents. Effect: Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections, if not made, would have led to the SEFA being materially misstated. They could also lead to findings and corrective action with funders. Questioned Costs: None Recommendation: Management should continue to seek additional training for the fiscal department on preparation of the SEFA and reporting standards. In addition, review processes over the SEFA and supporting reports should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Steps should be taken to prevent further adjustment of supporting profit and loss reports once reconciled without the express review and approval of the Fiscal Director. Review of the standards for supporting grant reports should be strengthened to prevent errors in reporting leading to errors on the SEFA. Any inconsistencies should be resolved before beginning the audit. Management has taken steps to identify and seek training in areas they have identified as needing improvement. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the audit findings and the material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The errors identified stemmed from insufficient internal controls over the preparation and review process. Additionally, there were inconsistencies in how the SEFA was prepared in previous years, compounded by a quick turnover to a new controller at year-end, which disrupted continuity and contributed to the lack of clear guidance in the SEFA preparation process. To address these challenges, management has implemented immediate corrective actions, including enhanced training for all staff involved in the SEFA preparation to ensure a thorough understanding of federal reporting standards and the required minimum elements. Furthermore, all SEFA components will be reconciled with original source documents, such as grant awards and trial balances, prior to submission for audit. Management believes that, with the new internal control measures and training in place, these errors are not expected to occur in future years.