Finding 2024-007 – Schedule of Expenditures of Federal Awards (SEFA) – Incorrect CFDA / Assistance Listing Numbers Reporting; Internal Control over Compliance (Significant Deficiency) Name of Federal Agency: U.S. Environmental Protection Agency Federal Program Name: Nonpoint Source Implementation Grants Assistance Listing Numbers: 66.460 Pass-Through Entity: Oregon Department of Environmental Quality Name of Federal Agency: U.S. Department of Commerce – National Oceanic and Atmospheric Administration Federal Program Name: Pacific Coast Salmon Recovery Program Assistance Listing Numbers: 11.438, 15.015, 15.244 Pass-Through Entity: State of Oregon – Oregon Watershed Enhancement Board (OWEB) Name of Federal Agency: U.S. Department of Agriculture Federal Program Name: National Fish and Wildlife FoundationAssistance Listing Numbers: 10.665 Pass-Through Entity: U.S. Forest Service Name of Federal Agency: U.S. Department of Agriculture Federal Program Name: Natural Resources Conservation Service Assistance Listing Numbers: 10.905 Pass-Through Entity: U.S. Forest Service Name of Federal Agency: U.S. Department of the Interior Federal Program Name: Wildlife, Sport Fish and Restoration Program Assistance Listing Numbers: 15.244 Pass-Through Entity: Bureau of Land Management Name of Federal Agency: U.S. Department of the Interior Federal Program Name: Secure Rural Schools and community Self-Determination – Watershed and water-quality improvements Assistance Listing Numbers: 15.234 Pass-Through Entity: Bureau of Land Management Criteria: Under 2 CFR 200.510(b), auditees must prepare a complete and accurate SEFA including correct Assistance Listing (formerly CFDA) numbers, program names, and amounts. This is essential for proper identification of federal programs and determination of major programs. Condition: The SEFA for fiscal year ended June 30, 2024 was provided after asking for the SEFA repeatedly. When finally received, the SEFA contained incorrect Assistance Listing numbers for multiple programs/awards, which could lead to misclassification of federal awards. Context: The SEFA reported $1,381,646 in federal expenditures across 27 programs/grant agreements. Testing revealed that 23 of the 27 grant awards had incorrect Assistance Listing numbers on the SEFA and were not aligned with agreements or program information. The SEFA was finalized, only after significant auditor follow-up. Cause: Management did not have adequate procedures for compiling and reviewing SEFA information, including verification of Assistance Listing numbers against official sources and award documents. Effect or Potential Effect: Incorrect CFDA / Assistance Listing numbers may: Impair auditor’s ability to properly identify major programs, Result in noncompliance with Uniform Guidance reporting requirements, Increase risk of audit findings and questioned costs in future periods. Questioned Cost: None identified Repeat of a Prior-Year Finding: No, Prior- year did not require a Single Audit. Recommendation: We recommend that Partnership for the Umpqua Rivers: Establish a formal SEFA preparation process, including a checklist for verifying Assistance Listing numbers against award documents and official listings, Assign responsibility for timely SEFA submission, and require supervisory review before providing to auditors. Maintain documentation supporting CFDA/ Assistance Listing numbers and program details in a centralized grant file. District Response: Partnership for the Umpqua Rivers acknowledges the deficiencies. Corrective Action Plan: ____________ (To be completed by Partnership for the Umpqua Rivers) Planned Implementation Date: ___________ Responsible Person: Partnership for the Umpqua Rivers Finance Manager
Reference Number: 2024-024 Prior Year Finding: No Federal Agency: U.S. Department of Health and Human Services State Agency: Department of Human Services Federal Program: Refugee and Entrant Assistance State Administered Programs Assistance Listing Number: 93.566 Award Number and Year: 2201MDRSSS (10/1/2021 – 9/30/2024) 2301MDRSSS (10/1/2022 – 9/30/2026) 2301MDRCMA (10/1/2022 – 9/30/2024) 2401MDRCMA (10/1/2023 – 9/30/2025) Compliance Requirement: SEFA Reporting Type of Finding: Material Weakness in Internal Control over Compliance, Material Noncompliance Criteria or specific requirement: Compliance: 2 CFR, Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F, §200.510(b) requires that auditees prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502. Internal Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: A material error was made by the Department of Human Services (Department) in the amount reported for the program on the Schedule of Expenditures of Federal Awards (SEFA). Context: The Department made a late adjustment to their SEFA reporting for the program which reduced total expenditures by $3.77 million, or approximately 10%. Cause: The General Accounting Department consulted with Department to “reasonably” determine the current year federal program expenditures. However, the Department incorrectly accounted for and reported the federal program expenditures as part of their closing reporting package and subsequently reduced expenditures by approximately 10%. Effect: The SEFA was not prepared in accordance with OMB requirements which could impact the major program risk assessment. Questioned costs: None noted. Recommendation: We recommend that the Department review and enhance its reporting procedures and internal controls to ensure that expenditures reported on the SEFA are accurate. Views of responsible officials: Management agrees with the finding.
2024-001 SEFA REPORTING Federal Program Information: Federal Agency and Program Name U.S. Department of Health and Human Services Every Student Succeeds Act/Preschool Development Grants Grant Award G240352 Federal Assistance Listing Number 93.434 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.510(b) states that “the auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502.” Condition: The Organization’s internal controls are not adequate to ensure that the schedule of expenditures of Federal awards (SEFA) accurately reports Federal assistance. The Organization did not identify its expenditures under Assistance Listing 93.434 in fiscal year 2024. Questioned Costs: $0 Context: Total federal expenditures for Assistance Listing 93.434 were $2,860,000 for the year ended June 30, 2024. Cause: The Organization does not have adequate internal controls in place to ensure the accuracy of the SEFA. Effect: The Organization is not reporting accurate financial information in its SEFA. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization implement additional controls over financial reporting, including the SEFA, to ensure accuracy of financial data. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024-002: Schedule of Expenditures of Federal Awards (SEFA) Preparation Questioned Costs: None How the questioned costs were computed: N/A Grant Funding Source Grant Period Maternal, Infant, and U.S. Department of Health Oregon Health 10/01/2022-09/30/23 Early Childhood Home and Human Services Care Authority 10/01/2023-09/30/24 Visiting Program Condition: The SEFA provided for the audit contained significant errors that were identified and corrected during the audit. Criteria: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Cause: Umatilla-Morrow Head Start, Inc. had a third-party prepare the SEFA as of May 31, 2024. However, the report was not reviewed by management of Umatilla-Morrow Head Start, Inc. before it was provided for the audit. Effect: Errors in the preparation of the SEFA schedule could lead funding agencies to misinterpret the level of spending for a particular program for the period under audit. Additionally, the identification of major federal award programs chosen for specific compliance testing could be erroneous, depending on the misstatement in the total amount of federal expenditures for the year. Recommendation: Umatilla-Morrow Head Start, Inc. should perform a timely review of the SEFA to help ensure accurate reporting of federal expenditures in the SEFA report. View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.
US Department of the Treasury Passed through Missouri Department of Higher Education and Workforce Development Program Name: Coronavirus State and Local Fiscal Recovery Fund / American Rescue Plan Act / MoExcels Grant Assistance Listing #: 21.027 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the College initially failed to include $768,053 of Coronavirus State and Local Fiscal Recovery Fund (ARPA) funding received from the State of Missouri on the Schedule of Expenditures of Federal Awards. Additionally, the College incorrectly included $78,539 of 2024-25 SEOG funding that was drawn but not expended in the 2023-24 SEFA, resulting in an overstatement of SEOG expenditures. These errors were identified subsequent to the issuance of the report and require a re-issuance of the related audit reports. The internal control system did not prevent or detect these errors during the SEFA preparation process. Cause: The College's procedures for identifying and reporting federal expenditures were insufficient. The MoExcels grant application was submitted outside of the finance office without early communication to finance personnel regarding the federal funding source. Since the College rarely receives federal funding beyond routine Student Financial Aid programs, finance personnel were initially unaware that the MoExcels funding originated from a federal source and therefore required inclusion on the SEFA. Additionally, the College lacked adequate cutoff procedures to ensure federal expenditures were reported in the correct period based on when costs were incurred rather than when funds were drawn down from federal systems. The absence of formal communication protocols between program staff and the finance staff who prepared the SEFA, combined with insufficient review procedures for year-end federal drawdown cutoff, contributed to these oversights. Effect: The initial errors resulted in an understatement of federal expenditures on the originally issued SEFA by $768,053 for ARPA funds and an overstatement by $78,539 for SEOG funds, for a net understatement of $689,514. While these errors have been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the College implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all grant agreements to identify federal funding sources; (2) establishing regular communication between program and finance departments to identify all federal awards received; (3) maintaining a master listing of all grants that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (4) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are drawn down from federal systems; and (5) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against grant documentation and proper period reporting. We note that the College's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the College's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The College has implemented immediate corrective actions including development of a comprehensive grant tracking spreadsheet and establishment of regular meetings between program and finance staff. Additionally, effective immediately, all grant applications must be reviewed and approved by the Controller prior to submission to ensure proper identification of funding sources and compliance requirements. The College will also implement cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred. The Controller will review all G5 drawdowns near year-end to verify proper period reporting. Formal written procedures for SEFA preparation will be implemented by October 15, 2025. The Controller will maintain the master grant listing and review all grant agreements to determine federal funding sources. Beginning with fiscal year 2026 SEFA preparation, the CFO will perform an independent review for completeness and accuracy, including verification of proper period reporting for all federal expenditures.
2024-002: Schedule of Expenditures of Federal Awards (SEFA) Preparation Questioned Costs: None How the questioned costs were computed: N/A Grant Funding Source Grant Period Maternal, Infant, and U.S. Department of Health Oregon Health 10/01/2022-09/30/23 Early Childhood Home and Human Services Care Authority 10/01/2023-09/30/24 Visiting Program Condition: The SEFA provided for the audit contained significant errors that were identified and corrected during the audit. Criteria: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Cause: Umatilla-Morrow Head Start, Inc. had a third-party prepare the SEFA as of May 31, 2024. However, the report was not reviewed by management of Umatilla-Morrow Head Start, Inc. before it was provided for the audit. Effect: Errors in the preparation of the SEFA schedule could lead funding agencies to misinterpret the level of spending for a particular program for the period under audit. Additionally, the identification of major federal award programs chosen for specific compliance testing could be erroneous, depending on the misstatement in the total amount of federal expenditures for the year. Recommendation: Umatilla-Morrow Head Start, Inc. should perform a timely review of the SEFA to help ensure accurate reporting of federal expenditures in the SEFA report. View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.
US Department of the Treasury Passed through Missouri Department of Higher Education and Workforce Development Program Name: Coronavirus State and Local Fiscal Recovery Fund / American Rescue Plan Act / MoExcels Grant Assistance Listing #: 21.027 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the College initially failed to include $768,053 of Coronavirus State and Local Fiscal Recovery Fund (ARPA) funding received from the State of Missouri on the Schedule of Expenditures of Federal Awards. Additionally, the College incorrectly included $78,539 of 2024-25 SEOG funding that was drawn but not expended in the 2023-24 SEFA, resulting in an overstatement of SEOG expenditures. These errors were identified subsequent to the issuance of the report and require a re-issuance of the related audit reports. The internal control system did not prevent or detect these errors during the SEFA preparation process. Cause: The College's procedures for identifying and reporting federal expenditures were insufficient. The MoExcels grant application was submitted outside of the finance office without early communication to finance personnel regarding the federal funding source. Since the College rarely receives federal funding beyond routine Student Financial Aid programs, finance personnel were initially unaware that the MoExcels funding originated from a federal source and therefore required inclusion on the SEFA. Additionally, the College lacked adequate cutoff procedures to ensure federal expenditures were reported in the correct period based on when costs were incurred rather than when funds were drawn down from federal systems. The absence of formal communication protocols between program staff and the finance staff who prepared the SEFA, combined with insufficient review procedures for year-end federal drawdown cutoff, contributed to these oversights. Effect: The initial errors resulted in an understatement of federal expenditures on the originally issued SEFA by $768,053 for ARPA funds and an overstatement by $78,539 for SEOG funds, for a net understatement of $689,514. While these errors have been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the College implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all grant agreements to identify federal funding sources; (2) establishing regular communication between program and finance departments to identify all federal awards received; (3) maintaining a master listing of all grants that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (4) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are drawn down from federal systems; and (5) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against grant documentation and proper period reporting. We note that the College's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the College's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The College has implemented immediate corrective actions including development of a comprehensive grant tracking spreadsheet and establishment of regular meetings between program and finance staff. Additionally, effective immediately, all grant applications must be reviewed and approved by the Controller prior to submission to ensure proper identification of funding sources and compliance requirements. The College will also implement cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred. The Controller will review all G5 drawdowns near year-end to verify proper period reporting. Formal written procedures for SEFA preparation will be implemented by October 15, 2025. The Controller will maintain the master grant listing and review all grant agreements to determine federal funding sources. Beginning with fiscal year 2026 SEFA preparation, the CFO will perform an independent review for completeness and accuracy, including verification of proper period reporting for all federal expenditures.
III – Findings and questioned costs for Federal awards US Department of the Treasury Passed through Missouri Department of Higher Education and Workforce Development Program Name: Coronavirus State and Local Fiscal Recovery Fund / American Rescue Plan Act / MoExcels Grant Assistance Listing #: 21.027 Finding: 2024 – 001 SIGNIFICANT DEFICIENCY Reporting Condition: During our original audit, the College initially failed to include $768,053 of Coronavirus State and Local Fiscal Recovery Fund (ARPA) funding received from the State of Missouri on the Schedule of Expenditures of Federal Awards. Additionally, the College incorrectly included $78,539 of 2024-25 SEOG funding that was drawn but not expended in the 2023-24 SEFA, resulting in an overstatement of SEOG expenditures. These errors were identified subsequent to the issuance of the report and require a re-issuance of the related audit reports. The internal control system did not prevent or detect these errors during the SEFA preparation process. Cause: The College's procedures for identifying and reporting federal expenditures were insufficient. The MoExcels grant application was submitted outside of the finance office without early communication to finance personnel regarding the federal funding source. Since the College rarely receives federal funding beyond routine Student Financial Aid programs, finance personnel were initially unaware that the MoExcels funding originated from a federal source and therefore required inclusion on the SEFA. Additionally, the College lacked adequate cutoff procedures to ensure federal expenditures were reported in the correct period based on when costs were incurred rather than when funds were drawn down from federal systems. The absence of formal communication protocols between program staff and the finance staff who prepared the SEFA, combined with insufficient review procedures for year-end federal drawdown cutoff, contributed to these oversights. Effect: The initial errors resulted in an understatement of federal expenditures on the originally issued SEFA by $768,053 for ARPA funds and an overstatement by $78,539 for SEOG funds, for a net understatement of $689,514. While these errors have been corrected, the control deficiency increases the risk that future federal awards could be incorrectly reported on the SEFA, potentially resulting in noncompliance with federal reporting requirements and incomplete or inaccurate identification of major programs subject to audit. Questioned Costs: $0 Criteria: 2 CFR 200.510(b) requires that the auditee prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires that non-federal entities establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing the awards in compliance with Federal statutes, regulations, and the terms and conditions of the related awards. Recommendation: We recommend the College implement written procedures for SEFA preparation that include: (1) obtaining and reviewing all grant agreements to identify federal funding sources; (2) establishing regular communication between program and finance departments to identify all federal awards received; (3) maintaining a master listing of all grants that identifies the funding source (federal/state/local) and applicable Assistance Listing Numbers; (4) implementing cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred, not when funds are drawn down from federal systems; and (5) requiring independent review of the SEFA by someone knowledgeable about federal compliance requirements who verifies completeness against grant documentation and proper period reporting. We note that the College's finance office maintains good communication practices with auditors regarding federal funding when they are aware of such awards; therefore, strengthening the internal identification and cutoff processes will enhance the College's ability to provide complete, accurate, and timely information to auditors about all federal funding sources. Views of responsible personnel and planned corrective actions: Management concurs with this finding. The College has implemented immediate corrective actions including development of a comprehensive grant tracking spreadsheet and establishment of regular meetings between program and finance staff. Additionally, effective immediately, all grant applications must be reviewed and approved by the Controller prior to submission to ensure proper identification of funding sources and compliance requirements. The College will also implement cutoff procedures to ensure federal expenditures are reported in the correct period based on when eligible costs are incurred. The Controller will review all G5 drawdowns near year-end to verify proper period reporting. Formal written procedures for SEFA preparation will be implemented by October 15, 2025. The Controller will maintain the master grant listing and review all grant agreements to determine federal funding sources. Beginning with fiscal year 2026 SEFA preparation, the CFO will perform an independent review for completeness and accuracy, including verification of proper period reporting for all federal expenditures.
Finding 2024-001--Reporting of the Schedule of Expenditure of Federal Awards Federal Agency: U.S. Department of Health and Human Services Federal Program: ALN 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) – Passed through Health Research, Inc. Grant Period: Year ended April 30, 2024 Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Condition: The Organization’s internal controls did not identify amounts expended under the ELC program as federal expenditures. The related grant was inadvertently identified as a state grant and was initially excluded from the schedule of expenditures of federal awards (SEFA). As a result, the Organization should have reported ELC expenditures totaling $1,167,015 on the SEFA for the year ended April 30, 2024. Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the recipient’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. In addition, 2 CFR 200.303 requires non-Federal entities receiving federal awards to establish and maintain internal controls designated to reasonably ensure compliance with federal laws, regulations and program compliance. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Cause: The grant was originally coded as a state grant was overlooked when management prepared the SEFA. Effect: The SEFA was understated by $1,167,015. In addition, the inaccurate preparation of the SEFA may prevent the Organization from completing an audit in accordance with the timelines established in the Uniform Guidance. Questioned Costs: Not applicable Statistical Sampling: Not appliable Repeat Finding: No Recommendation: We recommend that the Organization implement additional processes and procedures to ensure that the SEFA is complete and accurate. Views of Responsible Officials: We agree with the finding noted above. Although the grant income was federally sourced, our contract was with a state department and was classified as such in our books and records. As soon as the error was realized, we notified the auditors so the necessary corrections could be made. This incident is isolated and not recurring. The grant for which this finding is associated was a temporary grant that has since ended. To prevent future errors from occurring, all new contracts will be reviewed prior to submitting the summary of federal awards to the auditor to ensure that any federally sourced funding is properly identified regardless of grantor. CARES of NY, Inc. will implement a check and balance procedure where the grants director will review the listing prior to audit submission for accuracy.
Finding 2024-001--Reporting of the Schedule of Expenditure of Federal Awards Federal Agency: U.S. Department of Health and Human Services Federal Program: ALN 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) – Passed through Health Research, Inc. Grant Period: Year ended April 30, 2024 Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Condition: The Organization’s internal controls did not identify amounts expended under the ELC program as federal expenditures. The related grant was inadvertently identified as a state grant and was initially excluded from the schedule of expenditures of federal awards (SEFA). As a result, the Organization should have reported ELC expenditures totaling $1,167,015 on the SEFA for the year ended April 30, 2024. Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the recipient’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. In addition, 2 CFR 200.303 requires non-Federal entities receiving federal awards to establish and maintain internal controls designated to reasonably ensure compliance with federal laws, regulations and program compliance. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Cause: The grant was originally coded as a state grant was overlooked when management prepared the SEFA. Effect: The SEFA was understated by $1,167,015. In addition, the inaccurate preparation of the SEFA may prevent the Organization from completing an audit in accordance with the timelines established in the Uniform Guidance. Questioned Costs: Not applicable Statistical Sampling: Not appliable Repeat Finding: No Recommendation: We recommend that the Organization implement additional processes and procedures to ensure that the SEFA is complete and accurate. Views of Responsible Officials: We agree with the finding noted above. Although the grant income was federally sourced, our contract was with a state department and was classified as such in our books and records. As soon as the error was realized, we notified the auditors so the necessary corrections could be made. This incident is isolated and not recurring. The grant for which this finding is associated was a temporary grant that has since ended. To prevent future errors from occurring, all new contracts will be reviewed prior to submitting the summary of federal awards to the auditor to ensure that any federally sourced funding is properly identified regardless of grantor. CARES of NY, Inc. will implement a check and balance procedure where the grants director will review the listing prior to audit submission for accuracy.
Finding 2024-002 Preparation of the Schedule Expenditures of Federal Awards -Significant Deficiency in Internal Control over Compliance Program: U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Award year: 2022, 2023 Criteria: The Uniform Guidance (2 CFR 200) Section 200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]….at a minimum shall…list individual Federal programs by Federal agency…[and] provide total Federal awards expended for each individual Federal program and the Assistance Listing Number (ALN) number or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Organization is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition/Cause: The Health Center did not have sufficient controls to ensure the SEFA included all expenditures that qualified as an expenditure of a federal award during the period. Effect: The total expenditures presented per the preliminary SEFA increased by $4,800,000 related to ALN #21.027, Coronavirus State and Local Fiscal Recovery Funds, which resulted in an additional major program. No changes to the other financial statements were needed and the final SEFA was corrected to reflect the change. Questioned Costs: Not applicable. Context: Factors contributing to the condition included the high volume of activity related to new COVID-19 programs and the lack of understanding that the related payments represented grant expenditures from a Federal source that were required to be reported on the SEFA as opposed to grant payments from a non-federal source. Repeat Finding: Not applicable. Recommendation: We recommend the Health Center develop and implement a review process through the year to ensure compliance with SEFA reporting requirements as outlined in the Uniform Guidance. Views of Responsible Officials: Processes will be put in place to compile the SEFA, provide adequete training to staff, and perform a related review prior to audit. In addition, grant agreements will be thoroughly reviewed.
Federal Agency: United States Department of the Treasury Federal Program: COVID-19 – State Small Business Credit Initiative Technical Assistance Grant Program (21.031) Federal Award Number: SSBCI-21031-0037 Federal Award Year: 2024 State Agency: Department of Economic Development and Office of the State Comptroller Reference: 2024-002 Criteria Reporting In accordance with Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 200.510(b), The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with section 200.502. For reporting purposes, State Small Business Credit Initiative (SSBCI) capital funds are not considered federal financial assistance. The SSBCI statute, 12 U.S.C. section 5702(c)(5), specifically states that capital funds transferred to jurisdictions are not considered federal financial assistance for the purposes of 31 U.S.C. subtitle V. Funds given to provide technical assistance, however, are considered federal financial assistance. Internal controls Lastly, 2 CFR 200.303(a) states the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Office of the State Comptroller (OSC) is responsible for the preparation of the schedule of expenditures of federal awards (SEFA). Annually, OSC provides the New York State agencies with a proposed SEFA with their respective expenditures by assistance listing number and each agency is charged with reviewing and providing adjustments and feedback. The proposed agency SEFA subschedule for State fiscal year 2024 provided to the Department of Economic Development (DED) did not include the expenditures for the SSBCI program. Upon DED review of the proposed agency SEFA subschedule, DED did not identify and report any expenditures for the SBBCI program that had been disbursed by DED. OSC utilized information in the Statewide Financial System (SFS) to populate the SEFA and which included expenditures totaling $154,792,221 for the SSBCI program. The amount was comprised of $151,191,199 related to capital funds and $3,601,022 of technical assistance funds. In accordance with 12 U.S.C. § 5702(c)(5), capital funds are not considered Federal financial assistance and therefore for reporting purposes should not be included on the SEFA. The preliminary SEFA including SBBCI expenditures of $154,792,221 was provided to the auditors and the SBBCI program was selected as a high-risk B program to be audited as a major program for State fiscal year 2024. Upon audit inquiry, it was determined that $151,191,199 related to capital funds and should not have been included on the SEFA. OSC appropriately adjusted the SEFA prior to finalizing the audit. DED did not properly review and report expenditures related to the SSBCI program on their SEFA subschedule. The communication between the Agencies was not sufficient to uncover the improper reporting on the SEFA. Cause DED did not properly review and report expenditures related to the SSBCI program to OSC. Possible Asserted Effect The effect was the incorrect reporting of federal expenditures, which necessitated adjustments on the SEFA during the audit process and highlighted potential compliance and oversight issues. Questioned Costs None Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation To address the identified issues and prevent future occurrences of improper reporting on the SEFA, we recommend that DED thoroughly review and report federal expenditures on their SEFA subschedule. We also recommend OSC review and enhance its guidelines provided to the Agencies to specifically highlight the Agencies responsibility to communicate to OSC any specific requirements of the programs, and the classification and reporting of different types of funds, such as capital funds and technical assistance funds, in accordance with relevant statutes and regulations. By implementing these recommendations, the State can enhance the accuracy and reliability of SEFA reporting, ensure compliance with federal regulations, and improve overall internal controls and communication between the Agencies.
Finding 2024-002 Preparation of the Schedule Expenditures of Federal Awards -Significant Deficiency in Internal Control over Compliance Program: U.S. Department of Treasury Coronavirus State and Local Fiscal Recovery Funds ALN 21.027 Award year: 2022, 2023 Criteria: The Uniform Guidance (2 CFR 200) Section 200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]….at a minimum shall…list individual Federal programs by Federal agency…[and] provide total Federal awards expended for each individual Federal program and the Assistance Listing Number (ALN) number or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Organization is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition/Cause: The Health Center did not have sufficient controls to ensure the SEFA included all expenditures that qualified as an expenditure of a federal award during the period. Effect: The total expenditures presented per the preliminary SEFA increased by $4,800,000 related to ALN #21.027, Coronavirus State and Local Fiscal Recovery Funds, which resulted in an additional major program. No changes to the other financial statements were needed and the final SEFA was corrected to reflect the change. Questioned Costs: Not applicable. Context: Factors contributing to the condition included the high volume of activity related to new COVID-19 programs and the lack of understanding that the related payments represented grant expenditures from a Federal source that were required to be reported on the SEFA as opposed to grant payments from a non-federal source. Repeat Finding: Not applicable. Recommendation: We recommend the Health Center develop and implement a review process through the year to ensure compliance with SEFA reporting requirements as outlined in the Uniform Guidance. Views of Responsible Officials: Processes will be put in place to compile the SEFA, provide adequete training to staff, and perform a related review prior to audit. In addition, grant agreements will be thoroughly reviewed.
Federal Agency: United States Department of the Treasury Federal Program: COVID-19 – State Small Business Credit Initiative Technical Assistance Grant Program (21.031) Federal Award Number: SSBCI-21031-0037 Federal Award Year: 2024 State Agency: Department of Economic Development and Office of the State Comptroller Reference: 2024-002 Criteria Reporting In accordance with Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 200.510(b), The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with section 200.502. For reporting purposes, State Small Business Credit Initiative (SSBCI) capital funds are not considered federal financial assistance. The SSBCI statute, 12 U.S.C. section 5702(c)(5), specifically states that capital funds transferred to jurisdictions are not considered federal financial assistance for the purposes of 31 U.S.C. subtitle V. Funds given to provide technical assistance, however, are considered federal financial assistance. Internal controls Lastly, 2 CFR 200.303(a) states the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control Integrated Framework", issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Office of the State Comptroller (OSC) is responsible for the preparation of the schedule of expenditures of federal awards (SEFA). Annually, OSC provides the New York State agencies with a proposed SEFA with their respective expenditures by assistance listing number and each agency is charged with reviewing and providing adjustments and feedback. The proposed agency SEFA subschedule for State fiscal year 2024 provided to the Department of Economic Development (DED) did not include the expenditures for the SSBCI program. Upon DED review of the proposed agency SEFA subschedule, DED did not identify and report any expenditures for the SBBCI program that had been disbursed by DED. OSC utilized information in the Statewide Financial System (SFS) to populate the SEFA and which included expenditures totaling $154,792,221 for the SSBCI program. The amount was comprised of $151,191,199 related to capital funds and $3,601,022 of technical assistance funds. In accordance with 12 U.S.C. § 5702(c)(5), capital funds are not considered Federal financial assistance and therefore for reporting purposes should not be included on the SEFA. The preliminary SEFA including SBBCI expenditures of $154,792,221 was provided to the auditors and the SBBCI program was selected as a high-risk B program to be audited as a major program for State fiscal year 2024. Upon audit inquiry, it was determined that $151,191,199 related to capital funds and should not have been included on the SEFA. OSC appropriately adjusted the SEFA prior to finalizing the audit. DED did not properly review and report expenditures related to the SSBCI program on their SEFA subschedule. The communication between the Agencies was not sufficient to uncover the improper reporting on the SEFA. Cause DED did not properly review and report expenditures related to the SSBCI program to OSC. Possible Asserted Effect The effect was the incorrect reporting of federal expenditures, which necessitated adjustments on the SEFA during the audit process and highlighted potential compliance and oversight issues. Questioned Costs None Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation To address the identified issues and prevent future occurrences of improper reporting on the SEFA, we recommend that DED thoroughly review and report federal expenditures on their SEFA subschedule. We also recommend OSC review and enhance its guidelines provided to the Agencies to specifically highlight the Agencies responsibility to communicate to OSC any specific requirements of the programs, and the classification and reporting of different types of funds, such as capital funds and technical assistance funds, in accordance with relevant statutes and regulations. By implementing these recommendations, the State can enhance the accuracy and reliability of SEFA reporting, ensure compliance with federal regulations, and improve overall internal controls and communication between the Agencies.
2023-001 Internal Controls Over Compliance and Compliance with Reporting - Preparation of the Schedule of Expenditures of Federal Awards Information on the Major Federal Program - Federal Agency: Department of Health and Human Services Assistance Listing Number: 93.855 Assistance Listing Name: Research and Development Cluster Award Number: 1G20AI174721-01 Award Period: 09/16/2022 – 02/29/2024 Criteria: The Uniform Guidance in 2 CFR Section 200.510 (b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR Section 200.502 Basis for determining Federal awards expended.” The Schedule must provide total Federal awards expended for each individual Federal program. Condition: Expenditures for a grant under the Department of Health and Human Services program of approximately $1.3 million were incurred in 2023, but improperly not included in the Schedule. These expenditures were incurred but not billed to the federal awarding agency at December 31, 2023. Cause: The internal controls established for the review and reconciliation of the Schedule to the underlying accounting records were not consistently followed to ensure accurate reporting of expenditures to the Schedule. Questioned Costs: None. Context: We reviewed the Schedule and found the exception as noted in the condition. Effect: Failure to properly review and support expenditures reported in the Schedule can result in inaccurate reporting and non-compliance with laws and regulations. Repeat Finding: This is not a repeat finding. Recommendation: Internal controls should be designed to prevent, detect and correct errors and/or omissions in a timely manner. Without adequate controls, the Organization cannot provide reasonable assurance that the Schedule is fairly presented. See management’s response for further details.
Finding 2023-001: Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards – Other U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction (Federal-Aid Highway Program) – ALN 20.205 U.S. DEPARTMENT OF TREASURY COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, “the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for determining Federal awards expended. Condition: Prior to correction, certain federal expenditures were not properly identified on the schedule of expenditures of federal awards (SEFA). During our audit, it was determined total federal expenditures for the Highway Planning and Construction program were overstated by approximately $481,000 and federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds program were understated by approximately $340,000 on the SEFA. Cause: Internal controls were not in place to ensure program related revenues (which are used to prepare the federal expenditures for the SEFA) were properly recorded for the Highway Planning and Construction program and that calculations for the Coronavirus State and Local Fiscal Recovery Funds program were reviewed for accuracy. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not accurately reflect the total amount of federal dollars expended during a particular year. Context: The SEFA was originally overstated by $481,000 for the Highway Planning and Construction program due to reporting $377,000 of expenditures as federal instead of local, reporting $120,000 of remaining encumbrances as 2023 expenditures, and excluding $16,000 of expenditures incurred as a result of recording retainage on a project. The Coronavirus State and Local Fiscal Recovery Funds program expenditures were originally understated on the SEFA by $340,000 due to a formula error relating to the calculation of total federal expenditures for the program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend staff review procedures related to revenue recognition of its highway construction programs to ensure amounts are properly reported on the SEFA, and that federal expenditure calculations are reviewed for accuracy. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in the City of Bloomington’s Corrective Action Plan.
Finding 2023-001: Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards – Other U.S. DEPARTMENT OF TRANSPORTATION Highway Planning and Construction (Federal-Aid Highway Program) – ALN 20.205 U.S. DEPARTMENT OF TREASURY COVID-19 - Coronavirus State and Local Fiscal Recovery Funds – ALN 21.027 Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, “the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for determining Federal awards expended. Condition: Prior to correction, certain federal expenditures were not properly identified on the schedule of expenditures of federal awards (SEFA). During our audit, it was determined total federal expenditures for the Highway Planning and Construction program were overstated by approximately $481,000 and federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds program were understated by approximately $340,000 on the SEFA. Cause: Internal controls were not in place to ensure program related revenues (which are used to prepare the federal expenditures for the SEFA) were properly recorded for the Highway Planning and Construction program and that calculations for the Coronavirus State and Local Fiscal Recovery Funds program were reviewed for accuracy. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not accurately reflect the total amount of federal dollars expended during a particular year. Context: The SEFA was originally overstated by $481,000 for the Highway Planning and Construction program due to reporting $377,000 of expenditures as federal instead of local, reporting $120,000 of remaining encumbrances as 2023 expenditures, and excluding $16,000 of expenditures incurred as a result of recording retainage on a project. The Coronavirus State and Local Fiscal Recovery Funds program expenditures were originally understated on the SEFA by $340,000 due to a formula error relating to the calculation of total federal expenditures for the program. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend staff review procedures related to revenue recognition of its highway construction programs to ensure amounts are properly reported on the SEFA, and that federal expenditure calculations are reviewed for accuracy. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in the City of Bloomington’s Corrective Action Plan.
PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.
PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.
PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.
PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.
PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.
PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.
PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.
PREPARATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS: FINDING TYPE: MATERIAL NONCOMPLIANCE/MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE (REPORTING, CASH MANAGEMENT AND ALLOWABLE COSTS/COST PRINCIPLES. PROGRAMS: SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN; ASSISTANCE LISTING NUMBER 10.557; AWARD NUMBERS 50022 AND 50035, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. ELC CONTRACT TRACING, INVESTIGATION, TESTING COORD., AND INFECTION PREVENTION; ASSISTANCE LISTING NUMBER 93.323; AWARD NUMBER 251126, PASSED-THROUGH THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH. CRITERIA: THE CODE OF FEDERAL REGULATIONS (CFR) SECTION 200.303(B) REQUIRES NON-FEDERAL ENTITIES TO ESTABLISH AND MAINTAIN EFFECTIVE INTERNAL CONTROL OVER THE FEDERAL AWARD THAT PROVIDES REASONABLE ASSURANCE THAT THE NON-FEDERAL ENTITY IS MANAGING BY THE FEDERAL AWARD IN COMPLIANCE WITH FEDERAL STATUTES, REGULATIONS, AND TERMS AND CONDITIONS OF THE FEDERAL AWARD. CFR SECTION 200.502(A) STATES THAT THE DETERMINATION OF WHEN A FEDERAL AWARD IS EXPENDED SHOULD BE BASED ON WHEN THE ACTIVITY RELATED TO THE FEDERAL AWARD OCCURS. GENERALLY, THE ACTIVITY PERTAINS TO EVENTS THAT REQUIRE THE NON-FEDERAL ENTITY TO COMPLY WITH FEDERAL STATUTES, REGULATIONS, AND THE TERMS AND CONDITIONS OF FEDERAL AWARDS, SUCH AS EXPENDITURE/EXPENSE TRANSACTIONS ASSOCIATED WITH GRANT AWARDS. THE HEALTH DEPARTMENT REPORTS EXPENDITURES ON THE SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA WHEN THE EXPENDITURE HAS BEEN INCURRED, OR ON THE ACCRUAL BASIS OF ACCOUNTING, IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. CFR SECTION 200.510(B) REQUIRES THE AUDITEE TO PREPARE A SEFA FOR THE PERIOD COVERED BY THE AUDITEE'S FINANCIAL STATEMENTS WHICH MUST INCLUDE TH TOTAL FEDERAL AWARDS EXPENDED AS DETERMINED IN ACCORANCE WITH CRF SECTION 200.502(A), AS STATED ABOVE, AND MUST RECONCILE AMOUNTS REPORTED IN THE SEFA TO THE AMOUNTS REPORTED IN THE AUDITEEE'S FINANCIAL STATEMENTS. CONDITION: THE SEFA WAS NOT APPROPRIATELY RECONCILED TO THE FEDERAL GRANT REVENUES AND EXPENDITURES RECORDED IN THE FINANCIAL STATEMENTS. CHANGES WERE MADE TO MAJOR PROGRAM EXPENDITURES, AS WELL AS EXPENDITURES OF OTHR PROGRAMS DURING THE CLOSING PROCESS AND DURING COMPLETION OF THE SINGLE AUDIT TO PROPERLY REPORT EXPENDITURES ON THE SEFA. CLOSING PROCEDURES SHOULD BE IN PLACE TO RECONCILE GRANT EXPENDITURES INCURRED AT YEAR-END, CONFIRM THE AMOUNT AS ELIGIBLE WITH THE GRANTOR, CLAIM THE GRANT REVENUES ON A TIMELY BASIS, RECONCILE THE CLAIM TO THE GENERAL LEDGER, AND ENSURE THE EXPENDITURES THAT WILL BE CLAIMED UNDER FEDERAL AWARDS ARE PROPERTLY REPORTED ON THE SEFA AND AUDITED FINANCIAL STATEMENTS PRIOR TO THE START OF THE SINGLE AUDIT. IF EXPENDITURES REPORTED ON THE SEFA ARE MISSTATED, THE COUNTY COULD FAIL TO HAVE A PROGRAM APPROPRIATELY INDENTIFIED AS A MAJOR PROGRAM AND TESTED AS A MAJOR PROGRAM DURING THE SINGLE AUDIT. FAILURE TO HAVE A PROGRAM AUDITED DURING THE SINGLE AUDIT WOULD RESULT IN NONCOMPLIANCE WITH TITLE 2 U.S. CODE OF FEDERAL REGULATIONS PART 200, UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS (UNIFORM GUIDANCE). CAUSE: THE WAS THE HEALTH DEPARTMENT'S FIRST STANDALONE AUDIT AND MANAGEMENT HAD NOT PREPARED A SEFA IN THE PAST. EFFECT: THE SEFA RQUIRED MATERIAL ADJUSTMENTS TO INCLUDE ALL FEDERAL EXPENDITURES PRIOR TO THE SINGLE AUDIT BEGINNING, WHICH RESULTED IN A MISSTATED PRELIMINARY SEFA AND INEFFICIENCIES DURING THE SINGLE AUDIT. QUESTIONED COSTS: NO COSTS HAVE BEEN QUESTIONED AS A RESULT OF THIS FINDING. RECOMMENDATION: WE RECOMMEND THAT THE HEALTH DEPARTMENT TRACT THEIR FEDERAL AWARDS MORE REGULARLY AND RECONCILE IT TO THE GENERAL LEDGER. VIEW OF RESPONSIBLE OFFICIALS: THE HEALTH DEPARTMENT WILL REVISIT THEIR PROCEDURES AND METHOD OF FEDERAL AWARDS.
Federal agency: All agencies in the SEFA Assistance Listing Number: See SEFA Award Period: 01/01/2023 to 12/31/2023 Type of Finding: Significant Deficiency in Internal Control Over Financial Reporting Criteria or Specific Requirement: 2 CFR Section C: Subpart F Audit Requirements § 200.510 Financial statements Part (b) states: The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502 – Basis for determining Federal awards expended. Condition: Adjustments to the SEFA were necessary due to the internal controls not recognizing and correcting expenditures initially reported in the SEFA provided for audit. The SEFA as presented has been adjusted and is correct. Cause: The internal preparation and review processes did not identify the misstatement of the SEFA prepared for audit purposes. Effect or potential effect: If the SEFA is misstated related to the programs and expenditures incurred for the program. This could impact the scope of the audit and therefore the federal agencies’ reliance on the audit results. In addition, inaccurate tracking of federal expenditures may prevent the Organization from identifying when an audit in accordance with Government Auditing Standards and Uniform Guidance is required. Repeat Finding: No Auditor’s Recommendation: We recommend the auditee prepare supporting documentation for the calculation of the SEFA programs and amounts. We also recommend that the supporting documentation is reviewed and agreed with the SEFA for completeness and accuracy. Finally, we recommend that the Organization include fiscal training related to Uniform Guidance if federal programs continue to be a source of revenue. Views of Responsible Officials and Planned Corrective Actions: We agree that, due to data entry errors, the SEFA provided at the start of the single audit did not include the appropriate and applicable federal expenditures. We will be more diligent in the preparation of the SEFA to help prevent the potential for inadvertently misrepresenting the total federal expenditures and avoid the necessity for adjustments to the SEFA in future audits. At the issuance of the reports, we have enhanced our internal controls and processes related to the preparation of the SEFA to prevent this situation in future years. Our goal is to eliminate any errors to ensure that all applicable federal expenditures are complete and accurate.
Federal agency: All agencies in the SEFA Assistance Listing Number: See SEFA Award Period: 01/01/2023 to 12/31/2023 Type of Finding: Significant Deficiency in Internal Control Over Financial Reporting Criteria or Specific Requirement: 2 CFR Section C: Subpart F Audit Requirements § 200.510 Financial statements Part (b) states: The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502 – Basis for determining Federal awards expended. Condition: Adjustments to the SEFA were necessary due to the internal controls not recognizing and correcting expenditures initially reported in the SEFA provided for audit. The SEFA as presented has been adjusted and is correct. Cause: The internal preparation and review processes did not identify the misstatement of the SEFA prepared for audit purposes. Effect or potential effect: If the SEFA is misstated related to the programs and expenditures incurred for the program. This could impact the scope of the audit and therefore the federal agencies’ reliance on the audit results. In addition, inaccurate tracking of federal expenditures may prevent the Organization from identifying when an audit in accordance with Government Auditing Standards and Uniform Guidance is required. Repeat Finding: No Auditor’s Recommendation: We recommend the auditee prepare supporting documentation for the calculation of the SEFA programs and amounts. We also recommend that the supporting documentation is reviewed and agreed with the SEFA for completeness and accuracy. Finally, we recommend that the Organization include fiscal training related to Uniform Guidance if federal programs continue to be a source of revenue. Views of Responsible Officials and Planned Corrective Actions: We agree that, due to data entry errors, the SEFA provided at the start of the single audit did not include the appropriate and applicable federal expenditures. We will be more diligent in the preparation of the SEFA to help prevent the potential for inadvertently misrepresenting the total federal expenditures and avoid the necessity for adjustments to the SEFA in future audits. At the issuance of the reports, we have enhanced our internal controls and processes related to the preparation of the SEFA to prevent this situation in future years. Our goal is to eliminate any errors to ensure that all applicable federal expenditures are complete and accurate.
Significant Deficiency: Schedule of Expenditures of Federal Awards (SEFA) - Control Finding Criteria Or Specific Requirement: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance) provides guidance related to preparation and reporting of the SEFA. 2 CFR Section 200.100 identifies the required elements of the SEFA and 2 CFR Section 200.510 specifically requires that the SEFA include information on each federal award expended during the year. The County is required to prepare a complete and accurate SEFA and to have a system of internal controls, the design and operation of which allows management or employees in the normal course of performing their assigned functions to prevent, or detect and correct, errors on a timely basis. Condition: The SEFA was understated by a construction invoice that was not accrued as of year-end. A portion of those expenditures were included under a federal grant program. Cause: Management internal control process did not function properly in this instance to ensure an accurate SEFA. Effect: The possibility exists that errors within the SEFA could become material to the financial statements or result in an incorrect major program determination or incomplete testing of a major program. Questioned Costs: Not applicable Context: A sufficient review of the federal expenditure accruals did not occur so that an error to the SEFA report were not detected by management. Identification As A Repeat Finding: N/A Recommendation: We recommend that the County strengthen the processes within the internal control framework surrounding the review of year-end accruals for federal grant programs to ensure that all federal expenditures are complete and included in the correct period’s SEFA. Views Of Responsible Officials And Planned Corrective Action: The County agrees with the finding and has put together a correction action plan for the finding.
Finding 2023-001: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Accountability Lab experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of Accountability Lab's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. We also noted that a certain award was not clearly identified as Federal pass-through funds and therefore not initially included on the SEFA. As a result, several adjustments were posted to the financial statements to ensure Federal receivables, refundable advances and Federal revenue were properly recognized and accurately stated at year-end. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of Accountability Lab’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend Accountability Lab establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-001: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Accountability Lab experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of Accountability Lab's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. We also noted that a certain award was not clearly identified as Federal pass-through funds and therefore not initially included on the SEFA. As a result, several adjustments were posted to the financial statements to ensure Federal receivables, refundable advances and Federal revenue were properly recognized and accurately stated at year-end. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of Accountability Lab’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend Accountability Lab establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-001: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Accountability Lab experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of Accountability Lab's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. We also noted that a certain award was not clearly identified as Federal pass-through funds and therefore not initially included on the SEFA. As a result, several adjustments were posted to the financial statements to ensure Federal receivables, refundable advances and Federal revenue were properly recognized and accurately stated at year-end. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of Accountability Lab’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend Accountability Lab establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-001: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Accountability Lab experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of Accountability Lab's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. We also noted that a certain award was not clearly identified as Federal pass-through funds and therefore not initially included on the SEFA. As a result, several adjustments were posted to the financial statements to ensure Federal receivables, refundable advances and Federal revenue were properly recognized and accurately stated at year-end. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of Accountability Lab’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend Accountability Lab establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-001: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Accountability Lab experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of Accountability Lab's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. We also noted that a certain award was not clearly identified as Federal pass-through funds and therefore not initially included on the SEFA. As a result, several adjustments were posted to the financial statements to ensure Federal receivables, refundable advances and Federal revenue were properly recognized and accurately stated at year-end. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of Accountability Lab’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend Accountability Lab establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-001: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Accountability Lab experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of Accountability Lab's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. We also noted that a certain award was not clearly identified as Federal pass-through funds and therefore not initially included on the SEFA. As a result, several adjustments were posted to the financial statements to ensure Federal receivables, refundable advances and Federal revenue were properly recognized and accurately stated at year-end. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of Accountability Lab’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend Accountability Lab establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Finding 2023-001: Preparation of Schedule of Expenditures of Federal Awards (SEFA) Information on the Federal Programs: All Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510 “Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non- Federal entity must: establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: Accountability Lab experienced difficulty in preparing and ensuring that all Federal expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal Awards. The preparation of Accountability Lab's SEFA required manual adjustments of Federal costs. We noted that the manual adjustments were not completed prior to the start of the audit. We also noted that a certain award was not clearly identified as Federal pass-through funds and therefore not initially included on the SEFA. As a result, several adjustments were posted to the financial statements to ensure Federal receivables, refundable advances and Federal revenue were properly recognized and accurately stated at year-end. Cause: The year-end close process did not provide for the preparation of a complete and accurate schedule of expenditures of Federal awards. Effect: Without periodic training and consistent application of Accountability Lab’s internal policies and procedures, this could potentially result in unreliable and erroneous grant reporting, internal record keeping and decision making. Questioned Costs: None noted. Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that the issue was systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend Accountability Lab establish internal controls to correctly identify and track all Federal awards received either directly or indirectly.
Condition: This finding is repeated from the financial statement section. Before beginning the audit, inquiry was made of management about the amount of federal funds expended in the audit year ending December 31, 2023. Management indicated $160,000 in grant funds had been expended by forwarding an eamil from GWADD. In the course of our audit, we determined the district spent $1,764,760 in Federal loan funds, along with $6,933 in Rural Develoment grant proceeds. Managment was unable to provide evidence of proper internal controls over expenditures of Federal funds, i.e. written procedures. Criteria: 2 CFR 200.510 (b) states in part, "Schedule of expenditures of Federal awards. The auditee must also prepare a schedul of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as detrmined in accordance with 2 CFR 200.502." Effect: Failure to disclose the correct amount of federal funds expended. Cause: Failure to implement proper internal controls. Recommendation: We recommend the District implement proper internal controls over expenditures of Federal funds, including written procedures. We also recommend the District compete a schedule of expenditures of Federal awards (SEFA) in any year federal funds are expended.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule must provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For a cluster of programs, the total for the cluster must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. BDO identified the following matters during our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and development. In each case, the federal awarding agency or pass-through entity noted in the award agreement the award was not classified or considered as research and development. Management subsequently updated the classifications on the SEFA and corrected the presentation of various programs presented as both clusters and nonclusters on the SEFA. The SEFA, as presented, includes the corrections made by management. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Any samples selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per year in conjunction with the annual audit and did not include a procedure to properly identify research and development classification. Effect: The SEFA provided to BDO required several awards to be removed from the research and development cluster. Failure to present the SEFA correctly would have resulted in incorrect major program selection and an incorrect presentation of the overall SEFA. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management continue to focus on training for both preparer and reviewers of the SEFA to ensure the identification of research and development classification from federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest this review process begin before the Institute signs an award agreement to determine whether the agreement states whether it is considered to be research and development. The Institute would then be aware of the classification prior to committing to the terms of the award. This will ensure that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA and major program determination. Views of Responsible Officials: Management of the Institute agrees with the finding and recommendations set forth within and has developed a corrective action plan to address the instances of noncompliance identified and lapses in prescribed internal controls.