2023-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Statement of Condition During our audit, we reviewed the Coalition’s federal grants report for the fiscal year and identified the federal grants, Assistance Listing #s (AL#s) and the amounts of the federal expenditures and all of the other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). We then had the finance staff of the Coalition confirm the correctness of the SEFA. Despite the confirmation of accuracy, additional federal expenditures and grouping of grant expenditures were identified after several reviews of the SEFA.Criteria 2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, 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 awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, the errors could result in improper selections of major program(s) for the single audit and a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2024 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 13, 2024 (Final copy of the SEFA will not be given to the auditors until requested for the 2024 Audit) Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct. Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None
2023-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Statement of Condition During our audit, we reviewed the Coalition’s federal grants report for the fiscal year and identified the federal grants, Assistance Listing #s (AL#s) and the amounts of the federal expenditures and all of the other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). We then had the finance staff of the Coalition confirm the correctness of the SEFA. Despite the confirmation of accuracy, additional federal expenditures and grouping of grant expenditures were identified after several reviews of the SEFA.Criteria 2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, 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 awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, the errors could result in improper selections of major program(s) for the single audit and a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2024 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 13, 2024 (Final copy of the SEFA will not be given to the auditors until requested for the 2024 Audit) Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct. Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None
2023-002 [2022‐002]—PREPARATION OF SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Federal Agency: All presented in the Schedule of Expenditures of Federal Awards. Program Name: All presented in the Schedule of Expenditures of Federal Awards. Assistance Listing Nos. and Program Expenditures: All presented in Schedule of Expenditures of Federal Awards. Award Number and Program Award Year: All presented in Schedule of Expenditures of Federal Awards. Compliance Requirement: Other – Schedule of Expenditures of Federal Awards preparation Statement of Condition During our audit, we reviewed the Coalition’s federal grants report for the fiscal year and identified the federal grants, Assistance Listing #s (AL#s) and the amounts of the federal expenditures and all of the other items required to properly present the Schedule of Expenditures of Federal Awards (SEFA). We then had the finance staff of the Coalition confirm the correctness of the SEFA. Despite the confirmation of accuracy, additional federal expenditures and grouping of grant expenditures were identified after several reviews of the SEFA.Criteria 2 CFR 200.510 indicates that the auditee must prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502, Basis for Determining Federal Awards Expended. Per 2 CFR 200.502, 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 awards. In addition, 2 CFR Part 200.303 requires the program to establish and maintain effective internal controls over federal awards that provides reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of federal awards. Effect Without an established process governed by effective internal controls, the Coalition may not prevent or detect material misstatements on its SEFA in a timely manner. In addition, the errors could result in improper selections of major program(s) for the single audit and a substandard single audit. Cause Historically, the Coalition has requested the auditor assist in identifying accruals related to federal grant expenditures as the organization has maintained these records on a cash basis. As the organization has taken more responsibility on maintaining its federal grant expenditures on an accrual basis, an incomplete SEFA has been provided. Recommendation We recommend the Coalition prepare the Schedule of Expenditures of Federal Awards and submit this to the auditor for testing. The SEFA should include the name of the grant, name of grantor, the AL #, the pass-through number if applicable and a reconciliation of the federal revenues and expenditures to the Coalition’s general ledger. The Coalition staff should perform more detailed reviews of the reports to ensure they properly reflect grant receipts and expenditures. This review should be performed by someone other than the preparer and should include documented evidence of agreeing the reported data to the accounting records. We further recommend training for those individuals involved in the preparation and review of the reports to ensure they are fully aware of the requirements. View of Responsible Officials and Corrective Action Plan: The corrective Action Plan will be carried out in the 2024 Fiscal Year and information will be given to the auditors when requested for the next audit. The Coalition will ensure that all information needed for the SEFA is kept and entered accurately (this process has already begun). When the fiscal year closes out, the Coalition will provide the auditors with a test SEFA to confirm that the information we are collecting throughout the year and are asserting are the correct numbers for our federal grants, is indeed the correct information. Corrective Action Plan Timeline: Completed by December 13, 2024 (Final copy of the SEFA will not be given to the auditors until requested for the 2024 Audit) Designation Of Employee Position Responsible For Meeting Deadline: Executive Director will oversee this project and work directly with NMCEH finance staff work closely with the auditors to make sure that the information saved and shared is correct. Type of Finding: (F) Significant Deficiency in Internal Control over Compliance of Federal Awards. Questioned Costs: None
Assistance Listing, Federal Agency, and Program Name - ALN 97.036, U.S. Department of Homeland Security, Disaster Grants - Public Assistance (FEMA) Federal Award Identification Number and Year - All grants under ALN Pass-through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2022-004 Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended determined in accordance with Section 200.502. Condition - The FEMA expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - In fiscal year 2023, the County expended approximately $122 million of federal funding. The funding was received by various departments within the County and from several federal and nonfederal entities. The County accumulates the financial data and other required information to complete the SEFA. The FEMA expenditures on the SEFA were understated by $2,449,502. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for FEMA, and, as a result, FEMA expenditures of $2,449,502 were added to the SEFA, impacting major program determination. Recommendation - The County should implement a process to ensure the FEMA expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Planned Corrective Actions - Training on FEMA reporting for the SEFA was requested and performed by our auditors. Fiscal year 2024 is the last year any FEMA obligations will happen. A full understanding of the reported amount has been noted.
Assistance Listing, Federal Agency, and Program Name - ALN 97.036, U.S. Department of Homeland Security, Disaster Grants - Public Assistance (FEMA) Federal Award Identification Number and Year - All grants under ALN Pass-through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2022-004 Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended determined in accordance with Section 200.502. Condition - The FEMA expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - In fiscal year 2023, the County expended approximately $122 million of federal funding. The funding was received by various departments within the County and from several federal and nonfederal entities. The County accumulates the financial data and other required information to complete the SEFA. The FEMA expenditures on the SEFA were understated by $2,449,502. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for FEMA, and, as a result, FEMA expenditures of $2,449,502 were added to the SEFA, impacting major program determination. Recommendation - The County should implement a process to ensure the FEMA expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Planned Corrective Actions - Training on FEMA reporting for the SEFA was requested and performed by our auditors. Fiscal year 2024 is the last year any FEMA obligations will happen. A full understanding of the reported amount has been noted.
Assistance Listing, Federal Agency, and Program Name - ALN 97.036, U.S. Department of Homeland Security, Disaster Grants - Public Assistance (FEMA) Federal Award Identification Number and Year - All grants under ALN Pass-through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2022-004 Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended determined in accordance with Section 200.502. Condition - The FEMA expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - In fiscal year 2023, the County expended approximately $122 million of federal funding. The funding was received by various departments within the County and from several federal and nonfederal entities. The County accumulates the financial data and other required information to complete the SEFA. The FEMA expenditures on the SEFA were understated by $2,449,502. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for FEMA, and, as a result, FEMA expenditures of $2,449,502 were added to the SEFA, impacting major program determination. Recommendation - The County should implement a process to ensure the FEMA expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Planned Corrective Actions - Training on FEMA reporting for the SEFA was requested and performed by our auditors. Fiscal year 2024 is the last year any FEMA obligations will happen. A full understanding of the reported amount has been noted.
Assistance Listing, Federal Agency, and Program Name - ALN 97.036, U.S. Department of Homeland Security, Disaster Grants - Public Assistance (FEMA) Federal Award Identification Number and Year - All grants under ALN Pass-through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2022-004 Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended determined in accordance with Section 200.502. Condition - The FEMA expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - In fiscal year 2023, the County expended approximately $122 million of federal funding. The funding was received by various departments within the County and from several federal and nonfederal entities. The County accumulates the financial data and other required information to complete the SEFA. The FEMA expenditures on the SEFA were understated by $2,449,502. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for FEMA, and, as a result, FEMA expenditures of $2,449,502 were added to the SEFA, impacting major program determination. Recommendation - The County should implement a process to ensure the FEMA expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Planned Corrective Actions - Training on FEMA reporting for the SEFA was requested and performed by our auditors. Fiscal year 2024 is the last year any FEMA obligations will happen. A full understanding of the reported amount has been noted.
Finding Number: 2023-011 Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) ALN #: 97.036 Pass-through Entity: State of California – Office of Emergency Services Federal Agency: Federal Emergency Management Agency (FEMA) Grant Award Numbers: 3100202051, 3100202055, 3100202058, and 3100202059 Federal Award Years: January 27, 2023, March 12, 2023, July 17, 2023, July 21, 2023 Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards 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 entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Conditions Found The City did not have adequate internal controls related to the reporting of expenditures on the SEFA for Disaster Grants – Public Assistance (Presidentially Declared Disasters) (Disaster Grants) program. The City incorrectly reported $2,165,166 in expenditures on the September 30, 2023 draft Schedule of Expenditures of Federal Awards (SEFA) related to grants that were not obligated by the Federal Emergency Management Agency (FEMA) as of September 30, 2023, resulting in the draft SEFA being overstated. While the City had incurred costs under these FEMA projects, nonfederal entities may not record expenditures on the SEFA until FEMA has approved the nonfederal entity’s project and has obligated those expenditures to the nonfederal entity. The City subsequently revised the SEFA so that the expenditures reported are accurate. Cause In discussing these conditions with the City, it stated the error was primarily due to the City not understanding the updated guidance issued by FEMA that notes FEMA expenditures are to be recorded on the SEFA at the later of the FEMA obligation date or the incurrence of an allowable expense. Effect Failure to establish effective internal controls regarding financial reporting for the preparation of the Schedule may prevent the City from completing an audit in accordance with the timelines of Uniform Guidance. Questioned Costs Not applicable Repeat finding A similar finding was not reported in the prior year. Statistical sample The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the City implement a system of internal control that is designed and operating at a level of precision to ensure the Schedule is complete and accurate. View of Responsible Officials The Financial Management Department acknowledges there was a deficiency in the manner that expenditures were reported for a declared disaster on the SEFA for the fiscal year ended September 30, 2023. The $2,165,166 overstatement represented expenditures that FEMA obligated within 60 days of September 30, 2023. Given the program is maintained in a Governmental Fund, the Department recorded a revenue accrual in the FY 2023 Annual Comprehensive Financial Report (ACFR) to align with the City’s existing policy to record grant revenue expected to be collected within one year in the same fiscal year expenditures are reported. The Department recognizes FEMA Disaster Grants should be an exception and will prevent this reporting error by updating the Revenue Recognition Policy and issuing a Financial Management Disaster Procedure Manual that will include a narrative on this specific matter. The Procedures Manual will be published on the City Intranet and utilized for all City Staff as a resource for all future disaster grants funded by FEMA’s Public Assistance Program (ALN 97.036). Revisions to the Procedure Manual will be made as needed to ensure the City is current with the latest compliance changes. In addition to attending regular meetings and obtaining direct correspondence and guidance from FEMA representatives, Financial Management will also perform its own research to obtain, read, and apply the latest Uniform Guidance Compliance Supplement prior to the annual SEFA preparation process to ensure the City is meeting compliance requirements. The proper FEMA expenditures amount for fiscal year ended September 30, 2023, was revised in subsequent SEFA drafts and is reflected in the final Single Audit report.
2023-006: Preparing Accurate and Complete Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal controls and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.510(b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined with section 200.502. Condition: The Authority did not identify that they were subject to an audit under the Uniform Guidance (U.G.) and a schedule of expenditures of federal awards (SEFA) was not prepared by management. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None Context: This was the first year of the CCBHC grant which was $568,350 of the total of $1,029,718 federal awards. In reviewing if a single audit was required only the CCBHC grant was consider which was below the $750,000 threshold, however when combined with the entities other federal awards the amount exceed the $750,000 threshold. As a result, management may fail to identify that an audit under the Uniform Guidance is required and that all federal dollars are included. Cause/Effect: The Authority’s controls were not adequate to ensure that they identify the requirement to have an audit under the Uniform Guidance and the preparation of an accurate and complete SEFA. As a result, management may fail to identify that an audit under the Uniform Guidance is required and that all federal dollars are included. Recommendation: We recommend the Authority review federal, state, and local grants to determine if they are federally funded and, if federally funded, utilize the account number outlined in the State of Michigan chart of accounts to track federal funding. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.
Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat) Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash Management and Allowable Costs/Cost Principles) Federal Program: U.S. Department of Treasury – Coronavirus State and Local Fiscal Recovery Funds (AL #21.027) and Local Assistance and Tribal Consistency Fund (AL #21.032) Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. CFR Section 200.502(a) states that the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grant awards. The County reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis of accounting, in accordance with generally accepted accounting principles. CFR Section 200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section 200.502(a), as stated above, and must reconcile amounts reported in the SEFA to the amounts reported in the auditee’s financial statements. Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures recorded in the financial statements. Changes were made to major program expenditures, as well as expenditures of other programs, during the closing process and during the completion of the single audit to properly report expenditures on the SEFA. Closing procedures should be in place to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the grantor, claim the g ant revenues on a timely basis, reconcile the claim to the general ledger, and ensure the expenditures that will be claimed under federal awards are properly reported on the SEFA and audited financial statements prior to the start of the single audit. If expenditures reported on the SEFA are misstated, the County could fail to have a program appropriately identified as a major program and tested as a major program during the single audit. Failure to have a program audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Cause: Closing procedures were not in place and management did not effectively communicate with County departments responsible for administering federal awards to identify all federal grant related activity. Effect: The SEFA required material adjustments to include all federal expenditures prior to the single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during the single audit. In addition, the lack of closing procedures resulted in audit delays which caused the 2022 and 2023 financial reporting process, including data collection form submission, to be untimely. Questioned Costs: No costs have been questioned as a result of this finding. Recommendation: We recommend that management meet with department heads throughout the year and during the closing process to identify all expenditures under federal awards. Training should be provided to all staff to make sure they are aware of the importance of accurately reconciling and claiming grant expenditures on a timely basis and providing the information to management for inclusion on the SEFA. Views of Responsible Officials: The County will work to improve closing processes and communications with various departments to ensure the SEFA is complete and accurate.
Preparation of Schedule of Expenditures of Federal Awards (SEFA) (repeat) Finding Type: Material Weakness in Internal Controls and Noncompliance (Reporting, Cash Management and Allowable Costs/Cost Principles) Federal Program: U.S. Department of Treasury – Coronavirus State and Local Fiscal Recovery Funds (AL #21.027) and Local Assistance and Tribal Consistency Fund (AL #21.032) Criteria: The Code of Federal Regulations (CFR) Section 200.303(b) requires non-Federal entities to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. CFR Section 200.502(a) states that the determination of when a Federal award is expended should be based on when the activity related to the Federal award occurs. Generally, the activity pertains to events that require the nonFederal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as expenditure/expense transactions associated with grant awards. The County reports expenditures on the SEFA when the expenditure has been incurred, or on the accrual basis of accounting, in accordance with generally accepted accounting principles. CFR Section 200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section 200.502(a), as stated above, and must reconcile amounts reported in the SEFA to the amounts reported in the auditee’s financial statements. Condition: The SEFA was not appropriately reconciled to federal grant revenues and expenditures recorded in the financial statements. Changes were made to major program expenditures, as well as expenditures of other programs, during the closing process and during the completion of the single audit to properly report expenditures on the SEFA. Closing procedures should be in place to reconcile grant expenditures incurred at year-end, confirm the amount as eligible with the grantor, claim the g ant revenues on a timely basis, reconcile the claim to the general ledger, and ensure the expenditures that will be claimed under federal awards are properly reported on the SEFA and audited financial statements prior to the start of the single audit. If expenditures reported on the SEFA are misstated, the County could fail to have a program appropriately identified as a major program and tested as a major program during the single audit. Failure to have a program audited during the single audit would result in noncompliance with Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Cause: Closing procedures were not in place and management did not effectively communicate with County departments responsible for administering federal awards to identify all federal grant related activity. Effect: The SEFA required material adjustments to include all federal expenditures prior to the single audit beginning, which resulted in a misstated preliminary SEFA and inefficiencies during the single audit. In addition, the lack of closing procedures resulted in audit delays which caused the 2022 and 2023 financial reporting process, including data collection form submission, to be untimely. Questioned Costs: No costs have been questioned as a result of this finding. Recommendation: We recommend that management meet with department heads throughout the year and during the closing process to identify all expenditures under federal awards. Training should be provided to all staff to make sure they are aware of the importance of accurately reconciling and claiming grant expenditures on a timely basis and providing the information to management for inclusion on the SEFA. Views of Responsible Officials: The County will work to improve closing processes and communications with various departments to ensure the SEFA is complete and accurate.
2023-003: Significant deficiency over preparation of the Schedule of Expenditures of Federal Awards Assistance listing number(s): All Agency: All Program: All Grant Year: 2023 Criteria: According to 2 CFR 200.510(b), the audit is responsible for the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The SEFA must include, at a minimum, the information required by 2 CFR 200.510(b). Condition: One award was initially excluded from the Schedule of Expenditures of Federal Awards (SEFA) despite being a federal subaward. In addition, certain award balances were not correctly calculated by improperly excluding amounts already expended that will be reimbursed under the federal award, or improperly including amounts advanced and not yet expended. Cause: Balances on the schedule were calculated in-line with internal budgets rather than actual expenditures. Effect: The SEFA was not properly prepared for the year ended September 30, 2023. Questioned costs: There were no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Auditor’s recommendation: We recommend all agreements be reviewed to determine whether they are grants or contracts. Written policies and procedures should detail how the SEFA gets compiled to ensure proper and complete information. The calculations on the SEFA should be reviewed and approved by a supervisor and compared against expected balances. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
2023-003: Significant deficiency over preparation of the Schedule of Expenditures of Federal Awards Assistance listing number(s): All Agency: All Program: All Grant Year: 2023 Criteria: According to 2 CFR 200.510(b), the audit is responsible for the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The SEFA must include, at a minimum, the information required by 2 CFR 200.510(b). Condition: One award was initially excluded from the Schedule of Expenditures of Federal Awards (SEFA) despite being a federal subaward. In addition, certain award balances were not correctly calculated by improperly excluding amounts already expended that will be reimbursed under the federal award, or improperly including amounts advanced and not yet expended. Cause: Balances on the schedule were calculated in-line with internal budgets rather than actual expenditures. Effect: The SEFA was not properly prepared for the year ended September 30, 2023. Questioned costs: There were no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Auditor’s recommendation: We recommend all agreements be reviewed to determine whether they are grants or contracts. Written policies and procedures should detail how the SEFA gets compiled to ensure proper and complete information. The calculations on the SEFA should be reviewed and approved by a supervisor and compared against expected balances. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
2023-003: Significant deficiency over preparation of the Schedule of Expenditures of Federal Awards Assistance listing number(s): All Agency: All Program: All Grant Year: 2023 Criteria: According to 2 CFR 200.510(b), the audit is responsible for the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The SEFA must include, at a minimum, the information required by 2 CFR 200.510(b). Condition: One award was initially excluded from the Schedule of Expenditures of Federal Awards (SEFA) despite being a federal subaward. In addition, certain award balances were not correctly calculated by improperly excluding amounts already expended that will be reimbursed under the federal award, or improperly including amounts advanced and not yet expended. Cause: Balances on the schedule were calculated in-line with internal budgets rather than actual expenditures. Effect: The SEFA was not properly prepared for the year ended September 30, 2023. Questioned costs: There were no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Auditor’s recommendation: We recommend all agreements be reviewed to determine whether they are grants or contracts. Written policies and procedures should detail how the SEFA gets compiled to ensure proper and complete information. The calculations on the SEFA should be reviewed and approved by a supervisor and compared against expected balances. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
2023-003: Significant deficiency over preparation of the Schedule of Expenditures of Federal Awards Assistance listing number(s): All Agency: All Program: All Grant Year: 2023 Criteria: According to 2 CFR 200.510(b), the audit is responsible for the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The SEFA must include, at a minimum, the information required by 2 CFR 200.510(b). Condition: One award was initially excluded from the Schedule of Expenditures of Federal Awards (SEFA) despite being a federal subaward. In addition, certain award balances were not correctly calculated by improperly excluding amounts already expended that will be reimbursed under the federal award, or improperly including amounts advanced and not yet expended. Cause: Balances on the schedule were calculated in-line with internal budgets rather than actual expenditures. Effect: The SEFA was not properly prepared for the year ended September 30, 2023. Questioned costs: There were no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Auditor’s recommendation: We recommend all agreements be reviewed to determine whether they are grants or contracts. Written policies and procedures should detail how the SEFA gets compiled to ensure proper and complete information. The calculations on the SEFA should be reviewed and approved by a supervisor and compared against expected balances. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
2023-003: Significant deficiency over preparation of the Schedule of Expenditures of Federal Awards Assistance listing number(s): All Agency: All Program: All Grant Year: 2023 Criteria: According to 2 CFR 200.510(b), the audit is responsible for the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The SEFA must include, at a minimum, the information required by 2 CFR 200.510(b). Condition: One award was initially excluded from the Schedule of Expenditures of Federal Awards (SEFA) despite being a federal subaward. In addition, certain award balances were not correctly calculated by improperly excluding amounts already expended that will be reimbursed under the federal award, or improperly including amounts advanced and not yet expended. Cause: Balances on the schedule were calculated in-line with internal budgets rather than actual expenditures. Effect: The SEFA was not properly prepared for the year ended September 30, 2023. Questioned costs: There were no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Auditor’s recommendation: We recommend all agreements be reviewed to determine whether they are grants or contracts. Written policies and procedures should detail how the SEFA gets compiled to ensure proper and complete information. The calculations on the SEFA should be reviewed and approved by a supervisor and compared against expected balances. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
2023-003: Significant deficiency over preparation of the Schedule of Expenditures of Federal Awards Assistance listing number(s): All Agency: All Program: All Grant Year: 2023 Criteria: According to 2 CFR 200.510(b), the audit is responsible for the preparation of the Schedule of Expenditures of Federal Awards (SEFA). The SEFA must include, at a minimum, the information required by 2 CFR 200.510(b). Condition: One award was initially excluded from the Schedule of Expenditures of Federal Awards (SEFA) despite being a federal subaward. In addition, certain award balances were not correctly calculated by improperly excluding amounts already expended that will be reimbursed under the federal award, or improperly including amounts advanced and not yet expended. Cause: Balances on the schedule were calculated in-line with internal budgets rather than actual expenditures. Effect: The SEFA was not properly prepared for the year ended September 30, 2023. Questioned costs: There were no questioned costs related to this finding. Repeat finding: This is not a repeat finding. Auditor’s recommendation: We recommend all agreements be reviewed to determine whether they are grants or contracts. Written policies and procedures should detail how the SEFA gets compiled to ensure proper and complete information. The calculations on the SEFA should be reviewed and approved by a supervisor and compared against expected balances. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
Assistance Listing, Federal Agency, and Program Name 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 14.218, U.S. Department of Housing and Urban Development, CDBG Entitlement Grants Cluster Community Development Block Grant Federal Award Identification Number and Year N/A Pass through Entity ALN 14.218 Wayne County Finding Type Material weakness Repeat Finding Yes 2022 002 Criteria The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of Federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule. Condition The schedule of expenditures of federal awards (SEFA) was not accurate. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context During the fiscal year ended September 30, 2023, the City expended approximately $921,000 of federal funding. The initial draft of the SEFA included the following inaccuracies: ALN 66.818 The expenditures reported on the SEFA were understated by $689,255. ALN 14.218 The expenditures reported on the SEFA were understated by $55,192. The errors noted above have been corrected on the SEFA as of September 30, 2023. Cause and Effect Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit. The errors resulted in the understatement of federal expenditures. Additionally, the understatement of federal expenditures on the SEFA resulted in the incorrect conclusion that federal activity was below $750,000 and, therefore, a single audit was not needed. Recommendation We recommend the City implement a process to ensure that the SEFA is complete and accurate. Views of Responsible Officials and Corrective Action Plan The City will review its process for identifying and communicating Federal Grant expenditures to its auditors.
Assistance Listing, Federal Agency, and Program Name 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 14.218, U.S. Department of Housing and Urban Development, CDBG Entitlement Grants Cluster Community Development Block Grant Federal Award Identification Number and Year N/A Pass through Entity ALN 14.218 Wayne County Finding Type Material weakness Repeat Finding Yes 2022 002 Criteria The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of Federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule. Condition The schedule of expenditures of federal awards (SEFA) was not accurate. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context During the fiscal year ended September 30, 2023, the City expended approximately $921,000 of federal funding. The initial draft of the SEFA included the following inaccuracies: ALN 66.818 The expenditures reported on the SEFA were understated by $689,255. ALN 14.218 The expenditures reported on the SEFA were understated by $55,192. The errors noted above have been corrected on the SEFA as of September 30, 2023. Cause and Effect Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit. The errors resulted in the understatement of federal expenditures. Additionally, the understatement of federal expenditures on the SEFA resulted in the incorrect conclusion that federal activity was below $750,000 and, therefore, a single audit was not needed. Recommendation We recommend the City implement a process to ensure that the SEFA is complete and accurate. Views of Responsible Officials and Corrective Action Plan The City will review its process for identifying and communicating Federal Grant expenditures to its auditors.
Assistance Listing Number, Federal Agency, and Program Name - ALN 97.036, U.S. Department of Homeland Security, Disaster Grants Public Assistance (FEMA) Federal Award Identification Number and Year - All grants under ALN Pass through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2022 004 Criteria - Per 2 CFR 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 determined in accordance with Section 200.502. Condition - The FEMA expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - In fiscal year 2023, the County expended approximately $122 million of federal funding. The funding was received by various departments within the County and from several federal and nonfederal entities. The County accumulates the financial data and other required information to complete the SEFA. The FEMA expenditures on the SEFA were understated by $2,449,502. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for FEMA, and, as a result, FEMA expenditures of $2,449,502 were added to the SEFA, impacting major program determination. Recommendation - The County should implement a process to ensure the FEMA expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Planned Corrective Actions - Training on FEMA reporting for the SEFA was requested and performed by our auditors. Fiscal year 2024 is the last year any FEMA obligations will happen. A full understanding of the reported amount has been noted.
Assistance Listing Number, Federal Agency, and Program Name - ALN 97.036, U.S. Department of Homeland Security, Disaster Grants Public Assistance (FEMA) Federal Award Identification Number and Year - All grants under ALN Pass through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2022 004 Criteria - Per 2 CFR 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 determined in accordance with Section 200.502. Condition - The FEMA expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - In fiscal year 2023, the County expended approximately $122 million of federal funding. The funding was received by various departments within the County and from several federal and nonfederal entities. The County accumulates the financial data and other required information to complete the SEFA. The FEMA expenditures on the SEFA were understated by $2,449,502. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for FEMA, and, as a result, FEMA expenditures of $2,449,502 were added to the SEFA, impacting major program determination. Recommendation - The County should implement a process to ensure the FEMA expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Planned Corrective Actions - Training on FEMA reporting for the SEFA was requested and performed by our auditors. Fiscal year 2024 is the last year any FEMA obligations will happen. A full understanding of the reported amount has been noted.
Assistance Listing Number, Federal Agency, and Program Name - ALN 97.036, U.S. Department of Homeland Security, Disaster Grants Public Assistance (FEMA) Federal Award Identification Number and Year - All grants under ALN Pass through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2022 004 Criteria - Per 2 CFR 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 determined in accordance with Section 200.502. Condition - The FEMA expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - In fiscal year 2023, the County expended approximately $122 million of federal funding. The funding was received by various departments within the County and from several federal and nonfederal entities. The County accumulates the financial data and other required information to complete the SEFA. The FEMA expenditures on the SEFA were understated by $2,449,502. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for FEMA, and, as a result, FEMA expenditures of $2,449,502 were added to the SEFA, impacting major program determination. Recommendation - The County should implement a process to ensure the FEMA expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Planned Corrective Actions - Training on FEMA reporting for the SEFA was requested and performed by our auditors. Fiscal year 2024 is the last year any FEMA obligations will happen. A full understanding of the reported amount has been noted.
Assistance Listing Number, Federal Agency, and Program Name - ALN 97.036, U.S. Department of Homeland Security, Disaster Grants Public Assistance (FEMA) Federal Award Identification Number and Year - All grants under ALN Pass through Entity - Michigan Department of State Police Finding Type - Material weakness Repeat Finding - Yes 2022 004 Criteria - Per 2 CFR 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 determined in accordance with Section 200.502. Condition - The FEMA expenditures on the schedule of expenditures of federal awards (SEFA) initially presented for audit were not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - In fiscal year 2023, the County expended approximately $122 million of federal funding. The funding was received by various departments within the County and from several federal and nonfederal entities. The County accumulates the financial data and other required information to complete the SEFA. The FEMA expenditures on the SEFA were understated by $2,449,502. Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for FEMA, and, as a result, FEMA expenditures of $2,449,502 were added to the SEFA, impacting major program determination. Recommendation - The County should implement a process to ensure the FEMA expenditures reported on the SEFA are complete and accurate. Views of Responsible Officials and Planned Corrective Actions - Training on FEMA reporting for the SEFA was requested and performed by our auditors. Fiscal year 2024 is the last year any FEMA obligations will happen. A full understanding of the reported amount has been noted.
Assistance Listing Number, Federal Agency, and Program Name - ALN 66.458, U.S. Environment Protection Agency Capitalization Grants for Clean Water State Revolving Funds (CWSRF) Federal Award Identification Number and Year - Project Number 5834 01 (2023) Pass through Entity - Michigan Department Environment, Great Lakes and Energy Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must prepare appropriate financial statements, including the schedule of expenditures of federal awards, in accordance with 200.510 financial statements. Per 2 CFR 200.510(b), the auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended, as determined in accordance with 200.502 basis for determining federal awards expended. Condition - Controls in place were not adequate to ensure the schedule of federal expenditures was complete and accurate. If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - The County did not initially include the funds received through the Capitalization Grants for Clean Water State Revolving Funds. Cause and Effect - The County did not have a process in place to identify all potential sources of federal funding received during the year, resulting in the SEFA being incomplete for the year ended September 30, 2023. Upon discovery of the error, the County prepared a SEFA that included the Capitalization Grants for Clean Water State Revolving Funds. This lack of controls resulted in the reissuance of the 2023 single audit. Recommendation - Management should implement controls to ensure all federal funding received is properly identified as such and included on the SEFA. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding as reported. The federal funding was not received until fiscal year 2023, while expenditures were incurred prior to fiscal year 2023. The timing of events contributed to the oversight on the 2023 SEFA. The County has reeducated staff on the preparation of the SEFA in order to prevent this error from reoccurring.
2023-02 Expenditures of Federal Awards Internal Control and Compliance AL/CFDA#: 93.243 Federal Program: Substance Abuse and Mental Health Services Projects of Regional and National Significance Criteria: The Uniform Guidance-2CFR 200.508(b) and 2 CFR 200.508(d)-state: “The auditee must:…(b) Prepare appropriate financial statements, including the schedule of Federal awards in accordance with §200.510…(d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and other information as needed for the auditor to perform the audit required by this part.” Also, the Uniform Guidance §200.512 requires “the audit be completed and the data collection form described in paragraph (b) of this section must be submitted within the earlier of 30 calendar days after receipts of the auditor’s report(s), or nine months after the end of the audit period.” Condition: The NIWHRC experienced a change in the Executive Director and also in their accounting firm during the period under audit. The NIWHRC also experienced difficulty in finding a qualified audit firm to perform the audit. Cause and Effect: NIWHRC is out of compliance with the reporting deadline for the audit. Recommendation: I recommend the NIWHRC develop policy and procedures to ensure the organization remains in compliance with federal award obligations. Responsible Official's Response: The Executive Director has returned from sabbatical and has resumed duties and the NIWHRC has engaged a CPA audit firm.
Finding 2023 – 007: Reporting: Preparation of the Schedule of Expenditures of Federal Awards (SEFA), (Repeat Finding: 2019-007, 2020-007, 2021-006 and 2022-008) Criteria: Uniform Guidance 2 CFR §200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]… at a minimum shall…list individual Federal programs by Federal agency… [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing Number (ALN) or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Governmental Department is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2023, the Governmental Department did not have sufficient controls to ensure the SEFA accurately reflected each award’s federal expenditures. There were differences noted in reconciling expenditures from the original SEFA to the trial balance. These errors were corrected through adjustments proposed as part of the audit, and the final version of the SEFA reconciles to the Governmental Department’s general ledger. Questioned Costs: None Cause: Insufficient training or understanding of Uniform Guidance, including some of the required elements of the SEFA, contributed to this finding. Effect: The Governmental Department could not produce an accurate and timely SEFA, which required additional effort and resources by the Governmental Department and auditor during the audit process. Recommendation: We recommend that the Governmental Department becomes familiar with the SEFA reporting elements required by Uniform Guidance and develop and implement a review process to ensure compliance with those reporting requirements. These processes and controls should include reconciling SEFA federal expenditures to the current year general ledger expenditures and reviewing other grant related information to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2023 – 006: Reporting - Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Repeat Finding: 2021-007 and 2022-006) Criteria: Uniform Guidance 2 CFR § 200.510 requires an auditee to "prepare a schedule of expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements [that]… at a minimum shall… list individual Federal programs by Federal agency... [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing number or other identifying number when the ALN information is not available." In accordance with Uniform Guidance, the auditee is required to maintain a structure of internal controls to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2023, the Organization did not have adequate controls in place to ensure the SEFA accurately reflected each award's federal agency and assistance listing number. There were differences between the SEFA and the grant agreements/compliance supplements, requiring adjustments to the SEFA. Questioned Costs: None. Cause: A lack of sufficient training or understanding of Uniform Guidance requirements, particularly related to SEFA reporting elements, contributed to this finding. Effect: The Organization was unable to produce an accurate and timely SEFA, requiring additional effort and resources from both the Organization and the auditor to correct reporting errors during the audit process. Failure to produce an accurate SEFA resulted in noncompliance with requirements of Uniform Guidance which could lead to sanctions by funding agencies and curtailment of future funding. Recommendation: We recommend the Organization enhance its understanding of SEFA reporting requirements under Uniform Guidance, develop and implement a structured review process to ensure compliance with those reporting requirements, reconcile federal expenditures reported on the SEFA to the amounts recorded in the general ledger, and review federal agency names and assistance listing numbers against grant documentation to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.
Finding 2023-005 – SEFA Preparation – Material Weakness and Noncompliance Federal Program: Aging Cluster Federal Agency: U.S. Department of Health and Human Services ALN: 93.044, 93.045, 93.053 (Aging Cluster) Federal Award Number: 2301ALOASS, 2101ALSSC6, 2301ALOACM/2301ALOAHD, 2101ALCMC6/2101ALHDC6 Compliance Requirement: Reporting Criteria: 2 CFR 200.510(b) requires nonfederal entities to prepare a Schedule of Expenditures of Federal Awards (SEFA) that accurately reflects total federal expenditures for each federal program for the fiscal year. In addition, entities are required to maintain effective internal control over financial reporting and compliance to ensure that federal program expenditures are properly recorded, accumulated, and reported in accordance with federal requirements. Condition: During matching testing of the Aging Cluster, we identified errors in the preparation of the SEFA. Specifically, the expenditures reported on the initial SEFA for the Aging Cluster did not agree to the amounts reported on supporting reports submitted to the federal awarding agency for 4 out of the 8 reports selected for testing. The initial SEFA understated federal expenditures by approximately $502,000. Management indicated that the discrepancy resulted from errors in recording meals certificate revenue and complications arising from changes in accounting software during the fiscal year. The SEFA was subsequently corrected during the audit. Cause: Internal controls were not adequately designed or implemented to ensure that meals certificate revenue was properly recorded and that data migrated from the old accounting system into the new accounting system was complete and accurate for SEFA reporting purposes. Effect: This misstatement increased the risk that federal expenditures were not reported in accordance with Uniform Guidance. Repeat Finding: This is not a repeat finding. Questioned Costs: None noted. Recommendation: Warren Averett recommends that the Commission strengthen its documented policies and procedures regarding the recording and reporting of federal expenditures, particularly related to meals certificate revenue. This should include establishing formal reconciliation procedures between the trial balance, SEFA, and reports submitted to federal awarding agencies. View of Responsible Officials: See Corrective Action Plan at the end of the report.
Assistance Listing, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - 38080710K, 2022 Pass-through Entity - Illinois Department of Public Health (IDPH) Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303, the recipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should align with the 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 (COSO). Per 2 CFR 200.403, except where otherwise authorized by statute, in order to be allowable under Federal awards, costs must be determined in accordance with generally accepted accounting principles (GAAP), incurred during the approved budget period, and adequately documented. Per 2 CFR 200.510, the auditee must prepare a schedule of federal expenditures (SEFA) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502. Per 2 CFR 200.328, the funding agency establishes the financial reporting basis of accounting. Based on the reimbursement certificate template required by the passthrough funding agency, the recipient should report expenditures from expense activity, as well as cash or in-kind matching contributions where applicable. Condition - Management lacked adequate controls at the transaction level to ensure compliance with activities allowed or unallowed, allowable cost principles, and period of performance, which resulted in the improper inclusion of duplicate costs and costs from a prior fiscal period. Further, a lack of effective controls over financial reporting and over preparation of the SEFA resulted in management reporting activity on a cash basis, inconsistent with the basis of reporting established in Note 1 and with requirements established by the passthrough funding agency. Questioned Costs - $109,149 If Questioned Costs Are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not Be Reported - N/A Identification of How Questioned Costs Were Computed - Questioned costs totaling $49,754 represent a duplicate invoice found as the result of compliance testing. An additional $59,395 of costs were identified during compliance testing from invoices for goods or services received during fiscal year 2022. Context - During a walkthrough of management's processes and controls, we noted management did not have controls in place at the invoice level for 2 of the 3 vendors charged to the program during the fiscal period under audit to ensure compliance with activities allowed or unallowed, allowable cost principles, or period of performance. As the result of compliance testing, we identified 1 invoice in the amount of $49,754 out of 60 samples that was a duplicate transaction of another sample. As the result of compliance testing, we identified 7 out of 60 transactions totaling $59,395 incurred during the fiscal year ended September 30, 2022. Through discussions with management and in an effort to reconcile the SEFA to underlying general ledger expenditure activity incurred during the fiscal period under audit, we noted that the amount on the SEFA reflected cash reimbursed by IDPH and not expenditures incurred during the fiscal period. In addition, for 2 of the 4 quarterly financial reports selected for testing, we noted that amounts requested for reimbursement for those periods were overstated by approximately $217,000 in aggregate, in relation to the underlying expenditure activity incurred at the time of the submission of the financial report to and request for reimbursement from IDPH. Cause and Effect - A lack of effective controls over the preparation of the SEFA could result in material inaccuracies to the SEFA. A lack of effective controls at the transaction level resulted in noncompliance with accounting principles, duplicate charges to the program, and questioned costs. A lack of effective controls over financial reporting resulted in noncompliance with reporting requirements and an inaccurate reflection of activity incurred during the period reported. Recommendation - We recommend management implement effective controls at the transaction level to ensure costs are allowable under the terms and conditions of the grant agreement have not been duplicated within the population of costs charged to the program and are in compliance with cost principles outlined within the Uniform Guidance. In addition, we recommend that management review the Uniform Guidance and grant agreements carefully to understand the required basis of accounting and to implement an effective set of controls to ensure compliance with these requirements. Views of Responsible Officials and Corrective Action Plan - Management has implemented a new review and oversight process related to the process for the grant submissions in question.
SCHEDULE OF FINDINGS AND QUESTIONED COSTS Financial Statement Findings and Questioned Costs September 30, 2023 Comment #2023-002 INTERNAL CONTROLS OVER FINANCIAL STATEMENT PREPARATION, GRANT CLOSE OUT AND COMPLIANCE WITH RELATED PROVISIONS OF GRANTS AND CONTRACTS SHOULD BE IMPROVED HEAD START AND SUPPORTIVE SERVICES FOR VETERAN FAMILIES PROGRAM FAL # 93.600 AND 64.003 Condition: As part of our auditing procedures, we assisted in the preparation of the financial statements, related disclosures, and the schedule of expenditures of federal awards of the Authority. The preparation of these financial statements is in accordance with generally accepted accounting principles (GAAP) and Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is the responsibility of the grantee. The authoritative and regulatory standards states in summary, that management should authorize, process, reconcile and close-out each grant and contract in a timely manner to ensure proper accounting and reporting of such activity in accordance with the specific professional standards and regulatory requirements. The close-out process is designed to reduce the risk of errors, fraud, material misstatement of financial and compliance reporting and recognition of expenditures (or revenue) in the proper period. We noted that the current system of internal controls over financial statements and compliance is not designed to ensure that the objectives are achieved. Further, the capacity and experience of the current staff does not allow for adequate analysis of grants and contracts, proper allocations of shared costs and support services provided, grantor receivables, accounts payable, deferred revenue, and the reconciliation of bank accounts accurately and in a timely manner. This resulted in adjustments necessary to properly present the financial statements and disclosures of the Authority as of September 30, 2023. We also noted significant weaknesses in internal controls over personnel payroll and the processing, maintaining and reconciling payroll activity to the general ledger and external regulatory reporting (IRS Form 941's, IRS Form 990 filings, state filings, etc.) Therefore, the risk exists that grant receivables and/or cash from the various programs are not recorded properly during the reporting period (interim and annually). This condition also makes it difficult to prepare accurate external reports required by the various funding sources in a timely manner (i.e. SF-425). The SEFA may exclude pertinent information required by the Uniform Guidance. The systemic cause appears to be the untimely resignation of key personnel, a lack of personnel with the skills, knowledge, and experience with grant accounting and a weakness in the overall system of internal accounting controls and monitoring. Context: Review of internal control structure of the Authority’s in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP and GAS. The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. [2 CFR §200.510(a) and (b)] (Continued) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§200.327 Financial reporting and 200.328 Monitoring and reporting program performance [2 CFR §200.302(b)(2)]. When applicable to a single audit, the auditor must report as audit findings, significant deficiencies and material weaknesses in internal control over major programs (2 CFR §200.516(a)). In addition, Government Auditing Standards require auditors to report as findings significant deficiencies and material weaknesses in internal control over financial reporting identified during the audit. Effect: The risk exists that financial statements, the SEFA and other accounts and disclosures (including cash, fixed assets, grant-related receivables, deferred revenue, allocations, and cash) may not be recorded properly during the reporting period (interim and annually) and that errors may not be prevented, or detected and corrected, on a timely basis. This condition may also make it difficult for the Authority to prepare accurate and timely external reports required by various regulatory agencies and funding sources (for example, the SF-425, where applicable) and may increase the risk of noncompliance with grant and contract requirements. Cause: The cause appears to be, which may include one or more of the following: untimely resignation or turnover of key personnel; limited availability of personnel with sufficient training and experience in nonprofit and grant accounting and related compliance reporting; changes in systems and/or processes that were not accompanied by commensurate controls; and policies and procedures not being followed consistently throughout the year. Recommendation: We recommend that the Authority strengthen internal controls over the month-end and year-end financial reporting close process and grant/contract closeout activities. At a minimum, the Authority should: 1. Assign qualified personnel (internal staff and/or qualified third-party support under appropriate management oversight) to perform and document key monthly close procedures, including timely bank reconciliations, review of receivables and deferred revenue, review of grant activity, and review/approval of journal entries. 2. Implement and document supervisory review controls over the preparation of financial statements, related disclosures, and the SEFA, including review of significant estimates, allocations, and reconciliations. 3. Establish a compliance calendar and documented procedures to support timely, accurate external regulatory reporting, including IRS Forms 941, IRS Form 990, Form 5500, applicable state filings, and grantor reports such as the SF-425 and other State department filings, where applicable. 4. Provide targeted training and/or hire/retain personnel with appropriate nonprofit and grant accounting experience, including Uniform Guidance reporting requirements, commensurate with the Authority’s size and complexity. (Continued) 5. Update and consistently follow written accounting policies and procedures, including documented reviews and retention of support for key controls. Views of Responsible Officials and Planned Corrective Actions: We concur with this finding - Management is in the process of assessing the organizational structure and capacity to provide adequate financial reporting. With Board review and approval of the Authority’s financial funding sources, the Authority will hire additional fiscal clerk to further support financial requirements and segregation of duties to ensure adequate internal controls are fully implemented. The CFO will have the overall responsibility of properly reconciling and closing out the accounting system and grant activity each month in an efficient and timely manner to eliminate the risk of significant errors occurring. Budget-to-actual schedules will be an integral part of the grant accountant analyst’s basic responsibilities. The fiscal policies and procedures will be updated with the enhancements implemented within the fiscal department. Staff will be trained on revised policies and procedures and Uniform Guidance regulations. All enhancements will be implemented by September 30, 2026.
Ryan White HIV/AIDS Program Part A SEFA reporting Federal Agency: Department of Health and Human Services Program: HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) Assistance Listing #: 93.914 Criteria OMB Uniform Guidance 2 CFR 200.510(b)(3) requires that the auditee provide the Federal awards expended for each individual Federal program on the Schedule of Expenditures of Federal Awards (SEFA). In accordance with 2 CFR 200.502, the determination of when a Federal award is expended, and thereby reported on the SEFA, is generally based on when the activity related to the Federal award occurs. Condition The Ryan White HIV/AIDS Program Part A reimburses award recipients based on the number of units of care coordination services provided to eligible patients plus reimbursement for program deliverables coordinated by the recipient. Sunset Park tracked expenditures for SEFA reporting purposes on the basis of care coordinator salary expenses incurred, rather than on the reimbursement received from the passthrough sponsor. As a result, expenditures reported on the draft 2023 SEFA were understated. This has been corrected by management in the final SEFA included in this report. There was no impact on our audit scoping given this award was already included as a major program. Cause Sunset Park did not have a process in place to identify awards that are not cost reimbursement based to ensure proper reporting of such awards on the SEFA. Effect The draft 2023 SEFA underreported reimbursement received under this award by $211,026, which has been corrected in the final SEFA included in this report. Audit scoping was not impacted, but could have been if the amount of the award after adjustment exceeded the Type A threshold or resulted in audit coverage over the total SEFA that was no longer sufficient. Questioned Costs There are no questioned costs associated with this finding. Recommendation Sunset Park should continue to review all award terms to understand the grant’s reimbursement and reporting structure. For awards that are not cost reimbursement based, Sunset Park should implement a control to review activity under the award at least annually and ensure that amounts reported on the SEFA correlate to the allowable activities ultimately reimbursed by the granting agency.
Federal program: U.S. Department of the Treasury; Passed-through Illinois Department of Public Health-ALN 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds. Criteria: In accordance with 2 CFR 200 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. Condition: The Medical Center's SEFA for the year ended August 31, 2023, which is supplementary information to the Medical Center's financial statements, was restated to include an additional $2,000,000 of federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21.027. Management's processes and internal controls for ensuring that all federal funds expended by the Medical Center are captured and reported in the SEFA were inadquate to detect the omission of the $2,000,000 of federal expenditures. Context: The additional $2,000,000 of federal expenditures increased the total federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21.027 to $2,899,890. This resulted in the reissuance of the single audit report. Cause: The additional federal program expenditures for the Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21.027, were provided under a separate pass-through grant and were inadvertently omitted from the SEFA due to an oversight in the preparation of the SEFA resulting in part from and coinciding with the turnover of key personnel involved with and having oversight over the $2,000,000 award. Effect: Improper reporting of federal expenditures can result in material errors on the SEFA leading to inaccurate major program determination. In this instance an error did result in the identification of an additional major program. Repeat finding: No. Recommendation: We recommend that management enhance its process and internal controls around the timely identification of federal awards and preparation of the SEFA to ensure completeness and accuracy of the SEFA. Views of responsible officials of the auditee: Management agrees with the finding and the auditor's recommendation.
Ryan White HIV/AIDS Program Part A SEFA reporting Federal Agency: Department of Health and Human Services Program: HIV Emergency Relief Project Grants (Ryan White HIV/AIDS Program Part A) Assistance Listing #: 93.914 Criteria OMB Uniform Guidance 2 CFR 200.510(b)(3) requires that the auditee provide the Federal awards expended for each individual Federal program on the Schedule of Expenditures of Federal Awards (SEFA). In accordance with 2 CFR 200.502, the determination of when a Federal award is expended, and thereby reported on the SEFA, is generally based on when the activity related to the Federal award occurs. Condition The Ryan White HIV/AIDS Program Part A reimburses award recipients based on the number of units of care coordination services provided to eligible patients plus reimbursement for program deliverables coordinated by the recipient. Sunset Park tracked expenditures for SEFA reporting purposes on the basis of care coordinator salary expenses incurred, rather than on the reimbursement received from the passthrough sponsor. As a result, expenditures reported on the draft 2023 SEFA were understated. This has been corrected by management in the final SEFA included in this report. There was no impact on our audit scoping given this award was already included as a major program. Cause Sunset Park did not have a process in place to identify awards that are not cost reimbursement based to ensure proper reporting of such awards on the SEFA. Effect The draft 2023 SEFA underreported reimbursement received under this award by $211,026, which has been corrected in the final SEFA included in this report. Audit scoping was not impacted, but could have been if the amount of the award after adjustment exceeded the Type A threshold or resulted in audit coverage over the total SEFA that was no longer sufficient. Questioned Costs There are no questioned costs associated with this finding. Recommendation Sunset Park should continue to review all award terms to understand the grant’s reimbursement and reporting structure. For awards that are not cost reimbursement based, Sunset Park should implement a control to review activity under the award at least annually and ensure that amounts reported on the SEFA correlate to the allowable activities ultimately reimbursed by the granting agency.
Federal program: U.S. Department of the Treasury; Passed-through Illinois Department of Public Health-ALN 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds. Criteria: In accordance with 2 CFR 200 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. Condition: The Medical Center's SEFA for the year ended August 31, 2023, which is supplementary information to the Medical Center's financial statements, was restated to include an additional $2,000,000 of federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21.027. Management's processes and internal controls for ensuring that all federal funds expended by the Medical Center are captured and reported in the SEFA were inadquate to detect the omission of the $2,000,000 of federal expenditures. Context: The additional $2,000,000 of federal expenditures increased the total federal expenditures for the Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21.027 to $2,899,890. This resulted in the reissuance of the single audit report. Cause: The additional federal program expenditures for the Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing Number 21.027, were provided under a separate pass-through grant and were inadvertently omitted from the SEFA due to an oversight in the preparation of the SEFA resulting in part from and coinciding with the turnover of key personnel involved with and having oversight over the $2,000,000 award. Effect: Improper reporting of federal expenditures can result in material errors on the SEFA leading to inaccurate major program determination. In this instance an error did result in the identification of an additional major program. Repeat finding: No. Recommendation: We recommend that management enhance its process and internal controls around the timely identification of federal awards and preparation of the SEFA to ensure completeness and accuracy of the SEFA. Views of responsible officials of the auditee: Management agrees with the finding and the auditor's recommendation.
Internal Control Impact: Materail weakness. Repeat Finding: No. Questioned Costs: No. Criteria: 2 CFR section 200.510(b) requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA) that must contain all federal awards expended during the period. 2 CFR section 200.502 requires proper tracking and accounting of federal expenditures incurred under the same basis of accounting as the basic financial statements to ensure proper cutoff and reporting. Condition: The School did not adequately track its expenditures of federal awards and did not prepare a complete SEFA as of the year end. Cause: The School did not have an adequate process to track expenditures of federal awards. This resulted in the School not being aware that they had expended more than $750,000 of federal awards during the year and would be subject to the Uniform Guidance. Effect: Failure to adequately track expenditures of federal awards could result in the SEFA being prepared inaccurately or in an untimely manner. Recommendation: Marshall Jones recommends that the School establish a process to track the expenditures of federal awards during the year. This will help the School to be aware of crossing the Uniform Guidance threshold, enabling the School to prepare the SEFA accurately and timely. Views of Responsible Officials: Management of the School concurs with the finding. Please refer to the Corrective Action Plan.
2023-003 Schedule of Expenditures of Federal Awards (SEFA) Preparation Federal Program Information: Funding agency: All Title: All CFDA number: All Award year and number: 2021-2022 and 2022-2023 Criteria or Specific Requirement: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Expenditures should include only those which are both allowable and within the grant award. Grant reimbursement requests should be done monthly. Condition: The initial information provided for the audit was unreconciled and contained overspending in several grant funds that could not be requested due to grant limitations. Many funds included in the SEFA had to be adjusted, some by material amounts to bring expenditures down to requestable levels, and during the process, it was noted that at least one fund carried an accounts receivable balance which had not been requested. Layered in that balance was at least three years’ worth of unrequested funds causing District staff to have to work with the state to shift expenditures into the appropriate grant years to recover all amounts owed and spent by the District. Context: As part of our review of the SEFA, and during our testing over accounts receivable and revenues, Wipfli found that grant requests were often done once or twice a year rather than monthly, and amounts requested did not line up with accounts receivable as shown in the financial statements. Although there was no evidence of unallowable expenditures being charged to the funds, the fact that funds were over-expended and in excess of budget suggests that the budget is not driving expenditures and regular reconciliation and review is not happening. Questioned Costs: None Effect: The District staff and auditors had to spend additional time reviewing historical information and adjusting the classification of expenditures, often to the general fund, to keep grant funds in line with available grant amounts. This resulted in significant adjustments to the general fund for expenditures that were not likely budgeted in the current year. Cause: The District was not reconciling federal spending with available funding, requests for reimbursement were not timely, and the internal controls over review and spending do not appear to be functioning adequately. See also finding 2023-002. Repeat: No Auditor's Recommendation: Wipfli recommends continued training and timely requests for reimbursement for all applicable federal funds. In addition, regular review of budget and actual, district needs, and changes since the budget was set are integral to having an awareness of the funds and potential issues before they arise. By resetting the procedures of the District and completing these tasks, the reporting of the District will improve, and forward planning and preparation will improve. View of Responsible Official: The District will strive for monthly requests for reimbursement for all applicable federal funds, thus creating awareness of the funds and potential issues before they arise.
2023-003 Schedule of Expenditures of Federal Awards (SEFA) Preparation Federal Program Information: Funding agency: All Title: All CFDA number: All Award year and number: 2021-2022 and 2022-2023 Criteria or Specific Requirement: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Expenditures should include only those which are both allowable and within the grant award. Grant reimbursement requests should be done monthly. Condition: The initial information provided for the audit was unreconciled and contained overspending in several grant funds that could not be requested due to grant limitations. Many funds included in the SEFA had to be adjusted, some by material amounts to bring expenditures down to requestable levels, and during the process, it was noted that at least one fund carried an accounts receivable balance which had not been requested. Layered in that balance was at least three years’ worth of unrequested funds causing District staff to have to work with the state to shift expenditures into the appropriate grant years to recover all amounts owed and spent by the District. Context: As part of our review of the SEFA, and during our testing over accounts receivable and revenues, Wipfli found that grant requests were often done once or twice a year rather than monthly, and amounts requested did not line up with accounts receivable as shown in the financial statements. Although there was no evidence of unallowable expenditures being charged to the funds, the fact that funds were over-expended and in excess of budget suggests that the budget is not driving expenditures and regular reconciliation and review is not happening. Questioned Costs: None Effect: The District staff and auditors had to spend additional time reviewing historical information and adjusting the classification of expenditures, often to the general fund, to keep grant funds in line with available grant amounts. This resulted in significant adjustments to the general fund for expenditures that were not likely budgeted in the current year. Cause: The District was not reconciling federal spending with available funding, requests for reimbursement were not timely, and the internal controls over review and spending do not appear to be functioning adequately. See also finding 2023-002. Repeat: No Auditor's Recommendation: Wipfli recommends continued training and timely requests for reimbursement for all applicable federal funds. In addition, regular review of budget and actual, district needs, and changes since the budget was set are integral to having an awareness of the funds and potential issues before they arise. By resetting the procedures of the District and completing these tasks, the reporting of the District will improve, and forward planning and preparation will improve. View of Responsible Official: The District will strive for monthly requests for reimbursement for all applicable federal funds, thus creating awareness of the funds and potential issues before they arise.
2023-003 Schedule of Expenditures of Federal Awards (SEFA) Preparation Federal Program Information: Funding agency: All Title: All CFDA number: All Award year and number: 2021-2022 and 2022-2023 Criteria or Specific Requirement: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Expenditures should include only those which are both allowable and within the grant award. Grant reimbursement requests should be done monthly. Condition: The initial information provided for the audit was unreconciled and contained overspending in several grant funds that could not be requested due to grant limitations. Many funds included in the SEFA had to be adjusted, some by material amounts to bring expenditures down to requestable levels, and during the process, it was noted that at least one fund carried an accounts receivable balance which had not been requested. Layered in that balance was at least three years’ worth of unrequested funds causing District staff to have to work with the state to shift expenditures into the appropriate grant years to recover all amounts owed and spent by the District. Context: As part of our review of the SEFA, and during our testing over accounts receivable and revenues, Wipfli found that grant requests were often done once or twice a year rather than monthly, and amounts requested did not line up with accounts receivable as shown in the financial statements. Although there was no evidence of unallowable expenditures being charged to the funds, the fact that funds were over-expended and in excess of budget suggests that the budget is not driving expenditures and regular reconciliation and review is not happening. Questioned Costs: None Effect: The District staff and auditors had to spend additional time reviewing historical information and adjusting the classification of expenditures, often to the general fund, to keep grant funds in line with available grant amounts. This resulted in significant adjustments to the general fund for expenditures that were not likely budgeted in the current year. Cause: The District was not reconciling federal spending with available funding, requests for reimbursement were not timely, and the internal controls over review and spending do not appear to be functioning adequately. See also finding 2023-002. Repeat: No Auditor's Recommendation: Wipfli recommends continued training and timely requests for reimbursement for all applicable federal funds. In addition, regular review of budget and actual, district needs, and changes since the budget was set are integral to having an awareness of the funds and potential issues before they arise. By resetting the procedures of the District and completing these tasks, the reporting of the District will improve, and forward planning and preparation will improve. View of Responsible Official: The District will strive for monthly requests for reimbursement for all applicable federal funds, thus creating awareness of the funds and potential issues before they arise.
2023-003 Schedule of Expenditures of Federal Awards (SEFA) Preparation Federal Program Information: Funding agency: All Title: All CFDA number: All Award year and number: 2021-2022 and 2022-2023 Criteria or Specific Requirement: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Expenditures should include only those which are both allowable and within the grant award. Grant reimbursement requests should be done monthly. Condition: The initial information provided for the audit was unreconciled and contained overspending in several grant funds that could not be requested due to grant limitations. Many funds included in the SEFA had to be adjusted, some by material amounts to bring expenditures down to requestable levels, and during the process, it was noted that at least one fund carried an accounts receivable balance which had not been requested. Layered in that balance was at least three years’ worth of unrequested funds causing District staff to have to work with the state to shift expenditures into the appropriate grant years to recover all amounts owed and spent by the District. Context: As part of our review of the SEFA, and during our testing over accounts receivable and revenues, Wipfli found that grant requests were often done once or twice a year rather than monthly, and amounts requested did not line up with accounts receivable as shown in the financial statements. Although there was no evidence of unallowable expenditures being charged to the funds, the fact that funds were over-expended and in excess of budget suggests that the budget is not driving expenditures and regular reconciliation and review is not happening. Questioned Costs: None Effect: The District staff and auditors had to spend additional time reviewing historical information and adjusting the classification of expenditures, often to the general fund, to keep grant funds in line with available grant amounts. This resulted in significant adjustments to the general fund for expenditures that were not likely budgeted in the current year. Cause: The District was not reconciling federal spending with available funding, requests for reimbursement were not timely, and the internal controls over review and spending do not appear to be functioning adequately. See also finding 2023-002. Repeat: No Auditor's Recommendation: Wipfli recommends continued training and timely requests for reimbursement for all applicable federal funds. In addition, regular review of budget and actual, district needs, and changes since the budget was set are integral to having an awareness of the funds and potential issues before they arise. By resetting the procedures of the District and completing these tasks, the reporting of the District will improve, and forward planning and preparation will improve. View of Responsible Official: The District will strive for monthly requests for reimbursement for all applicable federal funds, thus creating awareness of the funds and potential issues before they arise.
2023-003 Schedule of Expenditures of Federal Awards (SEFA) Preparation Federal Program Information: Funding agency: All Title: All CFDA number: All Award year and number: 2021-2022 and 2022-2023 Criteria or Specific Requirement: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Expenditures should include only those which are both allowable and within the grant award. Grant reimbursement requests should be done monthly. Condition: The initial information provided for the audit was unreconciled and contained overspending in several grant funds that could not be requested due to grant limitations. Many funds included in the SEFA had to be adjusted, some by material amounts to bring expenditures down to requestable levels, and during the process, it was noted that at least one fund carried an accounts receivable balance which had not been requested. Layered in that balance was at least three years’ worth of unrequested funds causing District staff to have to work with the state to shift expenditures into the appropriate grant years to recover all amounts owed and spent by the District. Context: As part of our review of the SEFA, and during our testing over accounts receivable and revenues, Wipfli found that grant requests were often done once or twice a year rather than monthly, and amounts requested did not line up with accounts receivable as shown in the financial statements. Although there was no evidence of unallowable expenditures being charged to the funds, the fact that funds were over-expended and in excess of budget suggests that the budget is not driving expenditures and regular reconciliation and review is not happening. Questioned Costs: None Effect: The District staff and auditors had to spend additional time reviewing historical information and adjusting the classification of expenditures, often to the general fund, to keep grant funds in line with available grant amounts. This resulted in significant adjustments to the general fund for expenditures that were not likely budgeted in the current year. Cause: The District was not reconciling federal spending with available funding, requests for reimbursement were not timely, and the internal controls over review and spending do not appear to be functioning adequately. See also finding 2023-002. Repeat: No Auditor's Recommendation: Wipfli recommends continued training and timely requests for reimbursement for all applicable federal funds. In addition, regular review of budget and actual, district needs, and changes since the budget was set are integral to having an awareness of the funds and potential issues before they arise. By resetting the procedures of the District and completing these tasks, the reporting of the District will improve, and forward planning and preparation will improve. View of Responsible Official: The District will strive for monthly requests for reimbursement for all applicable federal funds, thus creating awareness of the funds and potential issues before they arise.
2023-003 Schedule of Expenditures of Federal Awards (SEFA) Preparation Federal Program Information: Funding agency: All Title: All CFDA number: All Award year and number: 2021-2022 and 2022-2023 Criteria or Specific Requirement: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Expenditures should include only those which are both allowable and within the grant award. Grant reimbursement requests should be done monthly. Condition: The initial information provided for the audit was unreconciled and contained overspending in several grant funds that could not be requested due to grant limitations. Many funds included in the SEFA had to be adjusted, some by material amounts to bring expenditures down to requestable levels, and during the process, it was noted that at least one fund carried an accounts receivable balance which had not been requested. Layered in that balance was at least three years’ worth of unrequested funds causing District staff to have to work with the state to shift expenditures into the appropriate grant years to recover all amounts owed and spent by the District. Context: As part of our review of the SEFA, and during our testing over accounts receivable and revenues, Wipfli found that grant requests were often done once or twice a year rather than monthly, and amounts requested did not line up with accounts receivable as shown in the financial statements. Although there was no evidence of unallowable expenditures being charged to the funds, the fact that funds were over-expended and in excess of budget suggests that the budget is not driving expenditures and regular reconciliation and review is not happening. Questioned Costs: None Effect: The District staff and auditors had to spend additional time reviewing historical information and adjusting the classification of expenditures, often to the general fund, to keep grant funds in line with available grant amounts. This resulted in significant adjustments to the general fund for expenditures that were not likely budgeted in the current year. Cause: The District was not reconciling federal spending with available funding, requests for reimbursement were not timely, and the internal controls over review and spending do not appear to be functioning adequately. See also finding 2023-002. Repeat: No Auditor's Recommendation: Wipfli recommends continued training and timely requests for reimbursement for all applicable federal funds. In addition, regular review of budget and actual, district needs, and changes since the budget was set are integral to having an awareness of the funds and potential issues before they arise. By resetting the procedures of the District and completing these tasks, the reporting of the District will improve, and forward planning and preparation will improve. View of Responsible Official: The District will strive for monthly requests for reimbursement for all applicable federal funds, thus creating awareness of the funds and potential issues before they arise.
2023-003 Schedule of Expenditures of Federal Awards (SEFA) Preparation Federal Program Information: Funding agency: All Title: All CFDA number: All Award year and number: 2021-2022 and 2022-2023 Criteria or Specific Requirement: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements. Expenditures should include only those which are both allowable and within the grant award. Grant reimbursement requests should be done monthly. Condition: The initial information provided for the audit was unreconciled and contained overspending in several grant funds that could not be requested due to grant limitations. Many funds included in the SEFA had to be adjusted, some by material amounts to bring expenditures down to requestable levels, and during the process, it was noted that at least one fund carried an accounts receivable balance which had not been requested. Layered in that balance was at least three years’ worth of unrequested funds causing District staff to have to work with the state to shift expenditures into the appropriate grant years to recover all amounts owed and spent by the District. Context: As part of our review of the SEFA, and during our testing over accounts receivable and revenues, Wipfli found that grant requests were often done once or twice a year rather than monthly, and amounts requested did not line up with accounts receivable as shown in the financial statements. Although there was no evidence of unallowable expenditures being charged to the funds, the fact that funds were over-expended and in excess of budget suggests that the budget is not driving expenditures and regular reconciliation and review is not happening. Questioned Costs: None Effect: The District staff and auditors had to spend additional time reviewing historical information and adjusting the classification of expenditures, often to the general fund, to keep grant funds in line with available grant amounts. This resulted in significant adjustments to the general fund for expenditures that were not likely budgeted in the current year. Cause: The District was not reconciling federal spending with available funding, requests for reimbursement were not timely, and the internal controls over review and spending do not appear to be functioning adequately. See also finding 2023-002. Repeat: No Auditor's Recommendation: Wipfli recommends continued training and timely requests for reimbursement for all applicable federal funds. In addition, regular review of budget and actual, district needs, and changes since the budget was set are integral to having an awareness of the funds and potential issues before they arise. By resetting the procedures of the District and completing these tasks, the reporting of the District will improve, and forward planning and preparation will improve. View of Responsible Official: The District will strive for monthly requests for reimbursement for all applicable federal funds, thus creating awareness of the funds and potential issues before they arise.
Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA) – Other ALL FEDERAL PROGRAMS IDENTIFIED ON THE SEFA Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards (SEFA), “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. While the auditor is able to assist with SEFA preparation, management remains responsible for identifying all federal expenditures to enable the preparation of a complete and accurate SEFA. Condition: Management was unable to provide a complete listing of federal expenditures at the start of audit fieldwork. Cause: Internal controls were not in place to require a final review of the listing of federal expenditures by the Director of Finance prior to audit fieldwork when the listing was prepared by another staff person. Questioned Costs: None. Effect: By not having proper controls over SEFA preparation at the beginning of the audit, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance, which could lead to an incorrect major program determination and a substandard single audit. Context: We requested that the Organization provide a list of all federal expenditures at the start of audit fieldwork. During the audit, we detected federal expenditures that were not identified by the Organization as federal. Additionally, the Organization identified federal expenditures during their review of the draft financial statements, which were previously not identified as federal. identified as federal. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Minnesota Land Trust implement internal controls to ensure there is an adequate communication and review process in place to capture all federal awards expended at the correct amounts in accordance with the criteria above. Views of Responsible Officials and Corrective Action Plan: The Minnesota Land Trust has internal controls to ensure that federal expenditures are accurately identified and reviewed. We will add additional internal controls to ensure a complete listing of federal expenditures is easy to provide and that the listing is reviewed by the Finance Department prior to audit fieldwork.
Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA) – Other ALL FEDERAL PROGRAMS IDENTIFIED ON THE SEFA Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards (SEFA), “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. While the auditor is able to assist with SEFA preparation, management remains responsible for identifying all federal expenditures to enable the preparation of a complete and accurate SEFA. Condition: Management was unable to provide a complete listing of federal expenditures at the start of audit fieldwork. Cause: Internal controls were not in place to require a final review of the listing of federal expenditures by the Director of Finance prior to audit fieldwork when the listing was prepared by another staff person. Questioned Costs: None. Effect: By not having proper controls over SEFA preparation at the beginning of the audit, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance, which could lead to an incorrect major program determination and a substandard single audit. Context: We requested that the Organization provide a list of all federal expenditures at the start of audit fieldwork. During the audit, we detected federal expenditures that were not identified by the Organization as federal. Additionally, the Organization identified federal expenditures during their review of the draft financial statements, which were previously not identified as federal. identified as federal. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Minnesota Land Trust implement internal controls to ensure there is an adequate communication and review process in place to capture all federal awards expended at the correct amounts in accordance with the criteria above. Views of Responsible Officials and Corrective Action Plan: The Minnesota Land Trust has internal controls to ensure that federal expenditures are accurately identified and reviewed. We will add additional internal controls to ensure a complete listing of federal expenditures is easy to provide and that the listing is reviewed by the Finance Department prior to audit fieldwork.
Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA) – Other ALL FEDERAL PROGRAMS IDENTIFIED ON THE SEFA Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards (SEFA), “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. While the auditor is able to assist with SEFA preparation, management remains responsible for identifying all federal expenditures to enable the preparation of a complete and accurate SEFA. Condition: Management was unable to provide a complete listing of federal expenditures at the start of audit fieldwork. Cause: Internal controls were not in place to require a final review of the listing of federal expenditures by the Director of Finance prior to audit fieldwork when the listing was prepared by another staff person. Questioned Costs: None. Effect: By not having proper controls over SEFA preparation at the beginning of the audit, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance, which could lead to an incorrect major program determination and a substandard single audit. Context: We requested that the Organization provide a list of all federal expenditures at the start of audit fieldwork. During the audit, we detected federal expenditures that were not identified by the Organization as federal. Additionally, the Organization identified federal expenditures during their review of the draft financial statements, which were previously not identified as federal. identified as federal. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Minnesota Land Trust implement internal controls to ensure there is an adequate communication and review process in place to capture all federal awards expended at the correct amounts in accordance with the criteria above. Views of Responsible Officials and Corrective Action Plan: The Minnesota Land Trust has internal controls to ensure that federal expenditures are accurately identified and reviewed. We will add additional internal controls to ensure a complete listing of federal expenditures is easy to provide and that the listing is reviewed by the Finance Department prior to audit fieldwork.
Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA) – Other ALL FEDERAL PROGRAMS IDENTIFIED ON THE SEFA Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards (SEFA), “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. While the auditor is able to assist with SEFA preparation, management remains responsible for identifying all federal expenditures to enable the preparation of a complete and accurate SEFA. Condition: Management was unable to provide a complete listing of federal expenditures at the start of audit fieldwork. Cause: Internal controls were not in place to require a final review of the listing of federal expenditures by the Director of Finance prior to audit fieldwork when the listing was prepared by another staff person. Questioned Costs: None. Effect: By not having proper controls over SEFA preparation at the beginning of the audit, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance, which could lead to an incorrect major program determination and a substandard single audit. Context: We requested that the Organization provide a list of all federal expenditures at the start of audit fieldwork. During the audit, we detected federal expenditures that were not identified by the Organization as federal. Additionally, the Organization identified federal expenditures during their review of the draft financial statements, which were previously not identified as federal. identified as federal. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Minnesota Land Trust implement internal controls to ensure there is an adequate communication and review process in place to capture all federal awards expended at the correct amounts in accordance with the criteria above. Views of Responsible Officials and Corrective Action Plan: The Minnesota Land Trust has internal controls to ensure that federal expenditures are accurately identified and reviewed. We will add additional internal controls to ensure a complete listing of federal expenditures is easy to provide and that the listing is reviewed by the Finance Department prior to audit fieldwork.
Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA) – Other ALL FEDERAL PROGRAMS IDENTIFIED ON THE SEFA Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards (SEFA), “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. While the auditor is able to assist with SEFA preparation, management remains responsible for identifying all federal expenditures to enable the preparation of a complete and accurate SEFA. Condition: Management was unable to provide a complete listing of federal expenditures at the start of audit fieldwork. Cause: Internal controls were not in place to require a final review of the listing of federal expenditures by the Director of Finance prior to audit fieldwork when the listing was prepared by another staff person. Questioned Costs: None. Effect: By not having proper controls over SEFA preparation at the beginning of the audit, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance, which could lead to an incorrect major program determination and a substandard single audit. Context: We requested that the Organization provide a list of all federal expenditures at the start of audit fieldwork. During the audit, we detected federal expenditures that were not identified by the Organization as federal. Additionally, the Organization identified federal expenditures during their review of the draft financial statements, which were previously not identified as federal. identified as federal. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Minnesota Land Trust implement internal controls to ensure there is an adequate communication and review process in place to capture all federal awards expended at the correct amounts in accordance with the criteria above. Views of Responsible Officials and Corrective Action Plan: The Minnesota Land Trust has internal controls to ensure that federal expenditures are accurately identified and reviewed. We will add additional internal controls to ensure a complete listing of federal expenditures is easy to provide and that the listing is reviewed by the Finance Department prior to audit fieldwork.
Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA) – Other ALL FEDERAL PROGRAMS IDENTIFIED ON THE SEFA Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards (SEFA), “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. While the auditor is able to assist with SEFA preparation, management remains responsible for identifying all federal expenditures to enable the preparation of a complete and accurate SEFA. Condition: Management was unable to provide a complete listing of federal expenditures at the start of audit fieldwork. Cause: Internal controls were not in place to require a final review of the listing of federal expenditures by the Director of Finance prior to audit fieldwork when the listing was prepared by another staff person. Questioned Costs: None. Effect: By not having proper controls over SEFA preparation at the beginning of the audit, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance, which could lead to an incorrect major program determination and a substandard single audit. Context: We requested that the Organization provide a list of all federal expenditures at the start of audit fieldwork. During the audit, we detected federal expenditures that were not identified by the Organization as federal. Additionally, the Organization identified federal expenditures during their review of the draft financial statements, which were previously not identified as federal. identified as federal. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Minnesota Land Trust implement internal controls to ensure there is an adequate communication and review process in place to capture all federal awards expended at the correct amounts in accordance with the criteria above. Views of Responsible Officials and Corrective Action Plan: The Minnesota Land Trust has internal controls to ensure that federal expenditures are accurately identified and reviewed. We will add additional internal controls to ensure a complete listing of federal expenditures is easy to provide and that the listing is reviewed by the Finance Department prior to audit fieldwork.
Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA) – Other ALL FEDERAL PROGRAMS IDENTIFIED ON THE SEFA Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards (SEFA), “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. While the auditor is able to assist with SEFA preparation, management remains responsible for identifying all federal expenditures to enable the preparation of a complete and accurate SEFA. Condition: Management was unable to provide a complete listing of federal expenditures at the start of audit fieldwork. Cause: Internal controls were not in place to require a final review of the listing of federal expenditures by the Director of Finance prior to audit fieldwork when the listing was prepared by another staff person. Questioned Costs: None. Effect: By not having proper controls over SEFA preparation at the beginning of the audit, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance, which could lead to an incorrect major program determination and a substandard single audit. Context: We requested that the Organization provide a list of all federal expenditures at the start of audit fieldwork. During the audit, we detected federal expenditures that were not identified by the Organization as federal. Additionally, the Organization identified federal expenditures during their review of the draft financial statements, which were previously not identified as federal. identified as federal. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Minnesota Land Trust implement internal controls to ensure there is an adequate communication and review process in place to capture all federal awards expended at the correct amounts in accordance with the criteria above. Views of Responsible Officials and Corrective Action Plan: The Minnesota Land Trust has internal controls to ensure that federal expenditures are accurately identified and reviewed. We will add additional internal controls to ensure a complete listing of federal expenditures is easy to provide and that the listing is reviewed by the Finance Department prior to audit fieldwork.
Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA) – Other ALL FEDERAL PROGRAMS IDENTIFIED ON THE SEFA Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards (SEFA), “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. While the auditor is able to assist with SEFA preparation, management remains responsible for identifying all federal expenditures to enable the preparation of a complete and accurate SEFA. Condition: Management was unable to provide a complete listing of federal expenditures at the start of audit fieldwork. Cause: Internal controls were not in place to require a final review of the listing of federal expenditures by the Director of Finance prior to audit fieldwork when the listing was prepared by another staff person. Questioned Costs: None. Effect: By not having proper controls over SEFA preparation at the beginning of the audit, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance, which could lead to an incorrect major program determination and a substandard single audit. Context: We requested that the Organization provide a list of all federal expenditures at the start of audit fieldwork. During the audit, we detected federal expenditures that were not identified by the Organization as federal. Additionally, the Organization identified federal expenditures during their review of the draft financial statements, which were previously not identified as federal. identified as federal. Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Minnesota Land Trust implement internal controls to ensure there is an adequate communication and review process in place to capture all federal awards expended at the correct amounts in accordance with the criteria above. Views of Responsible Officials and Corrective Action Plan: The Minnesota Land Trust has internal controls to ensure that federal expenditures are accurately identified and reviewed. We will add additional internal controls to ensure a complete listing of federal expenditures is easy to provide and that the listing is reviewed by the Finance Department prior to audit fieldwork.