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.
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.
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.
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.
Failure to inform auditors of the need for a single audit. Federal programs impacted: All ALNs, see SEFA. (General) Questioned Costs: None, NA Condition: The Clinic expended more than $750,000 in federal awards, triggering a single audit requirement and did not bring this to the auditors attention during the audit. The Clininc failed to properly maintain appropriate records to determine the need for a single audit as required by Uniform Guidance. Criteria: 2 CFR section 200.508(b)&(d) states that one responsibility of the auditee is to prepare appropriate financial statements, including the SEFA in accordance with 200.510. Part (d) states they must provide auditor with information as needed to perform the audit required. See also section 99.300(a). Cause: The Clinic did not have proper controls in place to determine the need for a single audit as required by the Uniform Guidance. Effect: Engagement letter and fees had to be reevaluated, and the nature, timing, and extent of the audit were impacted by the additional requirement. Recommendation: We recommend that the Clinic develops and implements policies and procedures to properly prepare the SEFA. Management Response: Management stated they will do a better job of tracking federal expenditures for the next audit year as they do not want to trigger a single audit again knowingly or otherwise and do not want any delays in the audit like this year.
Failure to inform auditors of the need for a single audit. Federal programs impacted: All ALNs, see SEFA. (General) Questioned Costs: None, NA Condition: The Clinic expended more than $750,000 in federal awards, triggering a single audit requirement and did not bring this to the auditors attention during the audit. The Clininc failed to properly maintain appropriate records to determine the need for a single audit as required by Uniform Guidance. Criteria: 2 CFR section 200.508(b)&(d) states that one responsibility of the auditee is to prepare appropriate financial statements, including the SEFA in accordance with 200.510. Part (d) states they must provide auditor with information as needed to perform the audit required. See also section 99.300(a). Cause: The Clinic did not have proper controls in place to determine the need for a single audit as required by the Uniform Guidance. Effect: Engagement letter and fees had to be reevaluated, and the nature, timing, and extent of the audit were impacted by the additional requirement. Recommendation: We recommend that the Clinic develops and implements policies and procedures to properly prepare the SEFA. Management Response: Management stated they will do a better job of tracking federal expenditures for the next audit year as they do not want to trigger a single audit again knowingly or otherwise and do not want any delays in the audit like this year.
Finding 2023-001: SEFA – Material Weakness Criteria: U.S. Code § 200.508(b) states that an auditee must prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) in accordance with § 200.510. U.S. Code § 200.510(b)(3) states that at a minimum the SEFA provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster. The inclusion of correct Assistance Listing numbers on the SEFA is a critical factor in determining major and non-major programs and designing appropriate audit procedures for individual grants. Condition: The SEFA prepared by management included an incorrect Assistance Listing (AL) number for one grant. Federal grant AL No. 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities was incorrectly identified as AL No. 20.507 Mobility Management. While both grants are from the Federal Transit Agency, they fall under different clusters in the Office of Management and Budget’s Compliance Supplement and thus have different audit requirements. Cause: Paratransit’s internal controls over the completeness of the SEFA were not operating effectively. Effect: The grant in question was initially identified as a major grant and certain audit procedures were applied. The revision of the AL number resulted in this grant being considered non-major, thus not required to be tested. Recommendation: We recommend management verify with the grantor the AL number of the grant. This can be done by obtaining this information from grant documents, or direct communication with the grantor. We further recommend the SEFA be reviewed for accuracy by an individual not included in the SEFA preparation process. Review should be notated with initials and date. Management’s Response: See Corrective Action Plan
Finding 2023-001: Internal Controls over Compliance and Other Matters – Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA); AL No. 84.336 Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, “the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 Basis for determining Federal awards expended.” Condition: Federal expenditures were not correctly identified on the School’s initial SEFA prepared for the audit. Per review of supporting documentation and inquiry of management, it was determined that the initial SEFA excluded $30,500 of federal expenditures for the Teacher Quality Partnership Grants – AL No. 84.336 program (U.S. Department of Education. Passed through to the School from the University of St. Thomas. Pass Through Entity Identifying Number S336S200016). This federal grant had been identified as Local Revenues, instead of Federal Revenues, which caused the related federal expenditures to be missed in the initial SEFA preparation. Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Effect: The amount of federal expenditures reported on the SEFA was initially understated by $30,500. The final SEFA included in the single audit reporting package accurately included these amounts. By not having proper controls over SEFA preparation and federal award identification, there is a risk that the SEFA will not reflect all of the federal awards subject to the Uniform Guidance. Questioned Costs: None. Repeat Finding of Immediate Prior Year: Yes. Finding 2022-002 – Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA); AL Nos. 93.434 and 93.575. Recommendation: We recommend that the School review internal control procedures to ensure timely identification of federal awards and related expenditures. Views of Responsible Officials and Planned Corrective Action: The School agrees with this finding. Lisa Hendricks, the Director of Finance, and the 3rd party accountant will work closely to develop a grant tracking system that determines the source of the grant funds prior to expending any of the funds.
2023-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Program: Department of Homeland Security Federal Emergency Management Agency Federal Assistance Listing Number: 97.024 Federal Assistance Listing Name: Emergency Food and Shelter National Board Program Pass-through Awards under the Uniform Guidance Requirements: Pass-through Entity Award Name Award Period The United Way SE Family Center DC Phase 39 November 1, 2021 to April 30, 2023 The United Way SE Family Center DC ARPAR November 1, 2021 to April 30, 2023 The United Way Mont. Co Family Center Phase 39 November 1, 2021 to April 30, 2023 The United Way Mont. Co Family Center ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners PG Co Phase 39 November 1, 2021 to April 30, 2023 The United Way Parish Partners PG Co ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners Calvert Co ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners Charles Co ARPAR November 1, 2021 to April 30, 2023 The United Way Angel’s Watch Charles Co ARPAR November 1, 2021 to April 30, 2023 The United Way St. Josephine’s Shelter DC ARPAR November 1, 2021 to April 30, 2023 The United Way Adam’s Place Shelter DC ARPAR November 1, 2021 to April 30, 2023 The United Way SMFB ARPAR November 1, 2021 to April 30, 2023 The United Way SCC Food Pantry Phase 39 November 1, 2021 to April 30, 2023 The United Way SCC Food Pantry ARPAR November 1, 2021 to April 30, 2023 The United Way Phase HR22 April 13, 2022 to July 7, 2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
2023-001 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) Information on the Major Federal Program: Department of Homeland Security Federal Emergency Management Agency Federal Assistance Listing Number: 97.024 Federal Assistance Listing Name: Emergency Food and Shelter National Board Program Pass-through Awards under the Uniform Guidance Requirements: Pass-through Entity Award Name Award Period The United Way SE Family Center DC Phase 39 November 1, 2021 to April 30, 2023 The United Way SE Family Center DC ARPAR November 1, 2021 to April 30, 2023 The United Way Mont. Co Family Center Phase 39 November 1, 2021 to April 30, 2023 The United Way Mont. Co Family Center ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners PG Co Phase 39 November 1, 2021 to April 30, 2023 The United Way Parish Partners PG Co ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners Calvert Co ARPAR November 1, 2021 to April 30, 2023 The United Way Parish Partners Charles Co ARPAR November 1, 2021 to April 30, 2023 The United Way Angel’s Watch Charles Co ARPAR November 1, 2021 to April 30, 2023 The United Way St. Josephine’s Shelter DC ARPAR November 1, 2021 to April 30, 2023 The United Way Adam’s Place Shelter DC ARPAR November 1, 2021 to April 30, 2023 The United Way SMFB ARPAR November 1, 2021 to April 30, 2023 The United Way SCC Food Pantry Phase 39 November 1, 2021 to April 30, 2023 The United Way SCC Food Pantry ARPAR November 1, 2021 to April 30, 2023 The United Way Phase HR22 April 13, 2022 to July 7, 2022 Criteria: Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR part 200) Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended.” The schedule must provide total Federal awards expended for each individual Federal program. In accordance with §200.302 Financial Management, a non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §200.327 Financial Reporting and §200.328 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for Federally-funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets.
Assistance Listing Number, Federal Agency, and Program Name - 84.425D, U.S. Department of Education, COVID 19 ESSER Formula Fund II 11r(2) and COVID 19 ESSER Formula Fund II Learning Loss 98c Finding Type - Significant deficiency Criteria - Per 2 CFR 200.510(b) and Section 500.508(b) of Title 2, Subtitle A, Chapter II, Part 200, Subpart F, auditees must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with Section 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition - The schedule of expenditures of federal awards (SEFA) was not complete, as it omitted expenditures from two federal awards. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Two grants were omitted from the SEFA prepared by management totaling $816,904 in expenditures, which was identified by the auditor during the annual audit and subsequently included on the SEFA. Expenditures were recorded in the School District's general ledger but were excluded from the School District's preparation of the SEFA. Cause and Effect - The School District did not have sufficient controls in place to properly reconcile federal revenue to the federal expenditures reflected on the SEFA to validate that all federal grants awarded and expended were included in the SEFA. Recommendation - The School District should implement a process to ensure that the SEFA is prepared timely and that all grant expenditures are included accurately. Views of Responsible Officials and Corrective Action Plan - The School District will develop a SEFA checklist to help ensure all federal expenditures are properly reported. Additional processes will be put in place by management to review the SEFA in advance of the annual audit to effectively meet audit report timelines and help ensure completeness, validity, and accuracy of the final SEFA reporting.
Assistance Listing Number, Federal Agency, and Program Name - 84.425D, U.S. Department of Education, COVID 19 ESSER Formula Fund II 11r(2) and COVID 19 ESSER Formula Fund II Learning Loss 98c Finding Type - Significant deficiency Criteria - Per 2 CFR 200.510(b) and Section 500.508(b) of Title 2, Subtitle A, Chapter II, Part 200, Subpart F, auditees must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended as determined in accordance with Section 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedule easier to use. Condition - The schedule of expenditures of federal awards (SEFA) was not complete, as it omitted expenditures from two federal awards. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Two grants were omitted from the SEFA prepared by management totaling $816,904 in expenditures, which was identified by the auditor during the annual audit and subsequently included on the SEFA. Expenditures were recorded in the School District's general ledger but were excluded from the School District's preparation of the SEFA. Cause and Effect - The School District did not have sufficient controls in place to properly reconcile federal revenue to the federal expenditures reflected on the SEFA to validate that all federal grants awarded and expended were included in the SEFA. Recommendation - The School District should implement a process to ensure that the SEFA is prepared timely and that all grant expenditures are included accurately. Views of Responsible Officials and Corrective Action Plan - The School District will develop a SEFA checklist to help ensure all federal expenditures are properly reported. Additional processes will be put in place by management to review the SEFA in advance of the annual audit to effectively meet audit report timelines and help ensure completeness, validity, and accuracy of the final SEFA reporting.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass-through Entity - Genesee County, Michigan Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared, as it originally included expenditures that were improperly excluded from the SEFA for the year ended June 30, 2022. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated. These revisions related to $136,295 of federal awards expended during the year ended June 30, 2022 that were not reported on the SEFA until the year ended June 30, 2023. These expenditures related to ALN 21.027 (Coronavirus State and Local Fiscal Recovery Funds). This amount did not impact the program type or major program determination for the year ended June 30, 2022. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the City's schedule of expenditures of federal awards for the prior year being understated and the amounts included in the current year expenditures of federal awards prior to audit-identified revisions. The amounts did not impact the program type or major program determination for the year ended June 30, 2022. Recommendation - The City should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The City will implement additional supervisory review of expenditures included on the SEFA.
Assistance Listing Number, Federal Agency, and Program Name - 21.027, U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass-through Entity - Genesee County, Michigan Finding Type - Material weakness Repeat Finding - No Criteria - Per 2 CFR 200.508(b), an auditee must properly prepare the schedule of expenditures of federal awards (SEFA). Per 2 CFR 200.510(b), the SEFA for the period covered by the auditee's financial statements must include the total federal awards expended as determined in accordance with 2 CFR 200.502, which describes the basis for determining federal awards expenses. Condition - The SEFA for the year ended June 30, 2023 was not accurately prepared, as it originally included expenditures that were improperly excluded from the SEFA for the year ended June 30, 2022. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Required revisions were identified during the audit to ensure that the schedule of expenditures of federal awards was accurately stated. These revisions related to $136,295 of federal awards expended during the year ended June 30, 2022 that were not reported on the SEFA until the year ended June 30, 2023. These expenditures related to ALN 21.027 (Coronavirus State and Local Fiscal Recovery Funds). This amount did not impact the program type or major program determination for the year ended June 30, 2022. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be reported on the SEFA did not operate effectively. This resulted in the City's schedule of expenditures of federal awards for the prior year being understated and the amounts included in the current year expenditures of federal awards prior to audit-identified revisions. The amounts did not impact the program type or major program determination for the year ended June 30, 2022. Recommendation - The City should expand procedures and review processes to ensure the proper expenditures are reported on the schedule of expenditures of federal awards. Views of Responsible Officials and Corrective Action Plan - The City will implement additional supervisory review of expenditures included on the SEFA.
Finding 2023-001 Criteria : According to 2 CFR Subpart F Section 200.510b, the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period that includes all amounts spent on federal programs during the reporting period. Condition : The Schedule of Expenditures of Federal Awards (SEFA) was overstated by $42,585. Cause : The School included depreciation expense within amounts reported on the SEFA which is not an allowable cost under Uniform Guidance. Effect : An audit adjustment was made to reduce the reported amount on the SEFA for the Child Nutrition Cluster (10.553, 10.555) by $5,988, the Title I, Part A grant (84.010A) by $378, the Student Support and Academic Enrichment Program - Title IV (84.424) by $581, Charter Schools Grant (84.282D) by $95, COVID-19 Elementary and Secondary School Emergency Relief (ESSER II) Fund (84.425D) by $29,896, and the COVID -19 ARP Elementary and Secondary School Emergency Relief (ARP ESSER) Fund (84.425U) by $5,647. Recommendation : We recommend that the School's accountant review and become familiar with Uniform Guidance and CFR 200 requirements to assist with including the accurate expenditure information in the Schedule. In addition, we recommend that the accountant reconcile federal award expenditures to the claims that were filed for the year. View of responsible officials : See attached corrective action plan.
Finding 2023-001 Criteria : According to 2 CFR Subpart F Section 200.510b, the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period that includes all amounts spent on federal programs during the reporting period. Condition : The Schedule of Expenditures of Federal Awards (SEFA) was overstated by $42,585. Cause : The School included depreciation expense within amounts reported on the SEFA which is not an allowable cost under Uniform Guidance. Effect : An audit adjustment was made to reduce the reported amount on the SEFA for the Child Nutrition Cluster (10.553, 10.555) by $5,988, the Title I, Part A grant (84.010A) by $378, the Student Support and Academic Enrichment Program - Title IV (84.424) by $581, Charter Schools Grant (84.282D) by $95, COVID-19 Elementary and Secondary School Emergency Relief (ESSER II) Fund (84.425D) by $29,896, and the COVID -19 ARP Elementary and Secondary School Emergency Relief (ARP ESSER) Fund (84.425U) by $5,647. Recommendation : We recommend that the School's accountant review and become familiar with Uniform Guidance and CFR 200 requirements to assist with including the accurate expenditure information in the Schedule. In addition, we recommend that the accountant reconcile federal award expenditures to the claims that were filed for the year. View of responsible officials : See attached corrective action plan.
Finding 2023-001 Criteria : According to 2 CFR Subpart F Section 200.510b, the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period that includes all amounts spent on federal programs during the reporting period. Condition : The Schedule of Expenditures of Federal Awards (SEFA) was overstated by $42,585. Cause : The School included depreciation expense within amounts reported on the SEFA which is not an allowable cost under Uniform Guidance. Effect : An audit adjustment was made to reduce the reported amount on the SEFA for the Child Nutrition Cluster (10.553, 10.555) by $5,988, the Title I, Part A grant (84.010A) by $378, the Student Support and Academic Enrichment Program - Title IV (84.424) by $581, Charter Schools Grant (84.282D) by $95, COVID-19 Elementary and Secondary School Emergency Relief (ESSER II) Fund (84.425D) by $29,896, and the COVID -19 ARP Elementary and Secondary School Emergency Relief (ARP ESSER) Fund (84.425U) by $5,647. Recommendation : We recommend that the School's accountant review and become familiar with Uniform Guidance and CFR 200 requirements to assist with including the accurate expenditure information in the Schedule. In addition, we recommend that the accountant reconcile federal award expenditures to the claims that were filed for the year. View of responsible officials : See attached corrective action plan.