Finding 2023-001 – Preparation of the Schedule of Expenditures of Federal Awards Significant Deficiency Criteria In order to have a proper basis for the single audit, the entity must have procedures in place in order to prepare an accurate Schedule of Expenditures of Federal Awards (SEFA). Condition During the audit, multiple revisions were made to the SEFA to accurately capture federal expenditures within the fiscal year under audit. These revisions were related to the amount of expenditures reported and the identification of federal programs. Cause The City did not accurately prepare SEFA in accordance with 2 CFR 200.510, therefore causing delays in the single audit and risk of inaccurate reporting. Identification as a Repeat Finding This is a new finding for fiscal year 2023. Effect Delays in the finalization of the single audit and related reporting to grantors for the fiscal year. Questioned Costs No questioned costs. Recommendation We recommend that the City document the process for how to prepare the SEFA and allow for the necessary time for a review and approval process prior to submitting the SEFA for the audit. Management’s response See attached Corrective Action Plan.
Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.
Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.
Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.
Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.
Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.
Finding 2023-02 – Preparation of SEFA (Material Weakness) Program: All Assistance Listing (AL) No.: N/A Federal Agency: N/A Passed Through: N/A Award Year: Fiscal Year 2022-2023 Compliance Requirement: N/A Questioned Costs: None Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.510(b) states that the auditee (the Agency) must prepare a SEFA for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined in accordance with §200.502. In addition, §200.303 of the Uniform Guidance states that the Agency must establish and maintain effective internal control over the federal awards, including controls over the accuracy of program information and expenditure amounts. Condition During audit procedures performed over the SEFA, we noted that the Agency incorrectly excluded expenditures from AL No. 20.509 Formula Grants for Rural Areas and Tribal Transit Program in the amount of $2,533,398 and from AL No. 21.019 in the amount of $200,000 on its preliminary SEFA. Cause of Condition The Agencies’ existing internal control system is not designed to provide an accurate and complete SEFA. The procedures currently in place did not include sufficient review of the information and supporting documentation relating to federal awards before the SEFA was provided to the external auditors. The first version of the SEFA provided by the Agency reported total expenditures of $6,430,319; the final revised expenditures totaled $9,163,717. Effect of Condition The SEFA, which is prepared by the Agency and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that the external auditors use to determine which programs will be audited as part of the single audit; therefore, the Agency’s responsibility for preparing an accurate and complete SEFA is critical. The inability to properly identify and track federal expenditures in the SEFA increases the likelihood that federal expenditures would not be fairly reported. There is increased risk of noncompliance with the requirements set forth in the U.S. Office of Management and Budget (OMB) Compliance Supplement, which can jeopardize future federal funding as well as result in the payback of federal awards. Recommendation We recommend the Agency implement internal controls to ensure the accuracy of program information, expenditure amounts, and assistance listing numbers. We also recommend the Agency strengthen its year-end closing procedures to ensure that all transactions and federal awards related to the fiscal year are properly captured and recorded in the general ledger to ensure the accuracy and completeness of the financial statements and supplementary schedules. Additionally, we recommend that the Agency provide sufficient resources and adequate oversight within the Agency to oversee the year-end closing procedures and preparation of the financial statements and supporting schedules. Lastly, we recommend the Agency Office provide training on an as needed basis for employees with financial reporting responsibilities. Management Response and Corrective Action Plan Noted and management concurs. A few measures have begun to take place chief among which is that 3rd party organization(s) are no longer managing the budget for TCRTA. As of FY 2024-2025 (July 1, 2024) TCRTA will be managing its own internal finances and thus establish sufficient controls. This report will be shared with the Board of Directors, other stakeholders, and, Tulare County’s Treasury’s office in order to obtain resources toward the net goal of fulfilling these defects. With respect to this corrective action plan TCRTA has setup a meeting with the Tresury’s office to discuss what the County’s YE closing processes are so that TCRTA can mirror the same.
Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) ALN: 10.170, Specialty Crop Block Grant ALN: 15.228, National Fire Plan ALN 10.767: Intermediary Relending Program (IRP) ALN 66.818: Brownfields RLF ALN 11.307: Economic Development Assistance RLF Criteria: The Code of Federal Regulations (CFR) Section §200.510(b) states in part: "The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with CFR Section §200.502 Basis for determining Federal awards expended." The schedule must provide total Federal awards expended for each individual Federal program. CFR 200.302(b)(1) requires that the nonfederal entity must identify in its accounts and on the schedule of expenditures of federal awards all federal awards received and expended, as well as the federal programs under which they were received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the federal award identification number and year, the name of the federal agency, and the name of the pass-through entity, if any. Condition: The Specialty Crop Block Grant was left off of the prepared SEFA. Amounts reported for the National Fire Plan grant, IRP, and Brownfields RLF did not agree to the accounting records. The amount reported for the Economic Development Assistance RLF was not calculated in accordance with the compliance supplement calculation formula. Context: There SEFA was understated or overstated by ALN as follows: • Understated by $14,123 for the omission of the Specialty Crop Block Grant; • Overstated by $1,942 for National Fire Plan grant; • Understated by $10,748 for IRP; • Understated by $25,902 for Brownfields RLF; and • Overstated by $101,804 for Economic Development Assistance RLF. The net effect was an overstatement of $52,973. Effect: The SEFA provided was not complete and fully accurate. Questioned Costs: None. Cause: The internal controls for the preparation of the SEFA and review of the SEFA were not present to ensure the SEFA was complete and accurate. Auditor Recommendation: We recommend the Organization prepare procedures on how to put together the SEFA and strengthen internal controls to ensure all federal awards are included on the SEFA. We also recommend that staff who administer federal funds review the SEFA for completeness and accuracy before providing it to the auditor. Organization Response: The organization disagrees with the reported deficiency related to the SEFA preparation on the basis that the task was an agreed nonattest service contracted to Douglas Wilson & Company, P.C. The noted modifications are outcomes of these services and are not indicative of control deficiencies. With respect to the nonattest services, the Organization has fulfilled the responsibilities stated in the engagement letter to assume all management responsibilities for the services; to have those services overseen by an individual with appropriate skills, knowledge, and experience; evaluate the adequacy of the services; and to accept responsibility for them. Since its inception, the organization’s auditors have prepared the SEFA under the same engagement letters executed with the auditor. The organization’s outsourced accounting firm, JCCS, also provides these nonattest services for their auditees and were operating under the same understanding of this service arrangement. Management reports that this finding is a result of a misunderstanding between Management, JCCS, and Douglas Wilson & Company, P.C. regarding which party would complete the SEFA. Based on the signed engagement letter, Management understood that completing the SEFA was part of the auditors’ nonattest services. Their outsourced accounting firm, JCCS, provided a draft SEFA to the auditors with communication that it was a draft and would need to be finalized. JCCS worked directly with the auditor in making the necessary changes and finalizing the SEFA. Management nor JCCS were aware that the auditor would be identifying this collaboration as a material weakness. Management strongly disagrees that this finding has anything to do with a deficiency in internal controls as they understood they had engaged the auditor to provide this nonattest service. Management reports a discussion with the auditor that such a misunderstanding presented as an internal control deficiency carries significant consequences for the organization's future Federal awards. It is important that the organization's Federal grantors understand the full context of this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-005 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the Academy prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the Academy did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The Academy’s SEFA was understated by $158,815 in federal expenditures related to the Emergency Connectivity Fund federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $158,815 of $1,308,178 was initially not reported. Cause – This was an oversight by academy personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the Academy review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The Academy agrees with the finding. The Academy has separately issued a Corrective Action Plan related to this finding.
Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal 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. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.
Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal 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. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.
Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal 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. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.
Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal 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. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.
Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal 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. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.
Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal 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. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.
Assistance Listing, Federal Agency, and Program Name - Student Financial Assistance Cluster - Federal Pell Grant Program ALN 84.063, Federal Direct Student Loan Program ALN 84.268, Federal Supplemental Educational Opportunity Grant (SEOG) Program ALN 84.007, Federal Work Study (FWS) Program ALN 84.033, and Federal Perkins Loan Program ALN 84.038; TRIO Student Support Service (SSS) Grant Program ALN 84.042; and Corporation for National and Community Service AmeriCorps Vista Grant Program ALN 94.006 Federal Award Identification Number and Year - 2022-2023 Finding Type - Significant deficiency Repeat Finding - No Criteria - Per 2 CFR 200.510(b) - The auditee must also prepare a schedule of federal 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. Condition - The schedule of expenditures of federal awards (SEFA) was not complete and accurate. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - The SEFA provided did not include all expenditures of the FWS and TRIO SSS programs and no expenditures of the AmeriCorps Vista program. In addition, the SEFA did not include the correct outstanding Federal Perkins Loan Balance as of the beginning of the fiscal year. As a result, the SEFA was overstated by $1,220,928. In addition, we noted the SEFA was not fully reconciled to the related federal expenditures and grant revenue as of June 30, 2023 resulting in an overstatement of federal revenue of $209,446. Cause and Effect - Controls in place did not ensure the SEFA was completed in a timely manner and that it was complete and accurate. The above errors have been corrected on the SEFA as of June 30, 2023. Recommendation - The College should implement a process to ensure that the SEFA is prepared timely and that it is complete, accurate, and reconciled to the related federal revenue and expenditures. The College should also ensure all federal grants are appropriately classified as federal within the general ledger. Views of Responsible Officials and Corrective Action Plan - The Albion College Business Office has established revised procedures for SEFA funds, in tandem with the Financial Aid Office, in which all Federal Awards and Grants will be reconciled on a quarterly basis, to be completed no later than the end of the first proceeding month of the quarter. The procedures create a dual- control process for the drawdown, recordation, and reporting of SEFA funds. Additionally, in FY24, the Perkins portfolio was divested. The Perkins Close- out will be part of the FY24 Single Audit.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 2023-003 Reporting Compliance Requirement Criteria – 2 CFR § 200.510 requires that the School prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards (SEFA) for the year ended June 30, 2023, which must include the total federal awards expended as determined in accordance with 2 CFR § 200.502. Management is responsible for establishing and maintaining effective internal controls over compliance with requirements applicable to federal programs, including separately tracking federal expenditures within the finance system to provide for accurate preparation of the SEFA. Condition – During our audit, we noted the School did not have sufficient controls in place to ensure completeness of the SEFA and compliance with this requirement. The School’s SEFA was understated by $507,980 in federal expenditures related to the Comprehensive Literacy Development federal program. Questioned Costs – Not applicable. Context – On the June 30, 2023 SEFA, $507,980 of $2,047,040 was initially not reported. Cause – This was an oversight by school personnel. Repeat Finding – This is a current year finding. Effect – An incomplete SEFA could result in incorrect major program determination and could be seen as a violation of federal award agreements. Recommendation – We recommend that the School review its internal control procedures over reporting and verify completeness of expenditures reported on the SEFA in the future. View of Responsible Official and Planned Corrective Actions – The School agrees with the finding. The School has separately issued a Corrective Action Plan related to this finding.
Criteria: “A non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity's fiscal year must have a single or program-specific audit conducted for that year in accordance with the provisions of the Uniform Guidance Part 2 CFR section 200.50 (a). In order to accomplish this, “The auditee must also 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 § 200.502” per Part 2 CFR section 200.510 (b) of the Uniform Guidance. This guidance includes the requirement that the SEFA include the Assistance Listing Number (ALN) for each grant award included in the schedule . Condition: The amounts recorded as federal expenditures on the SEFA were not based on expenditures. The amounts recorded as expenditures and recognized as revenues were based on budget billings. Cause: Prior management lacked an understanding of what should be considered a grant (versus a contract) and how expenditures should be determined. Effect: The SEFA was not prepared correctly, which could have a direct and material effect on allowable costs, the financial statements, and annual audit. Questioned Costs: Expenditures on the SEFA are recorded on an incorrect basis and per finding 2023-003, were not properly supported. The major program, ALN 84.027 reported expenditures of $840,000. Although not tested as a major program, we determined for the same reason noted in this finding that the other federal reported expenditures on the SEFA are also considered questioned cost, totaling $508,600. Context: Federal programs and expenditures are not recognized consistent with the Uniform Guidance. Identification of Repeat Finding: 2020-001, 2021-001, 2022-001 Recommendation: We recommend that management develop policies and procedures to ensure all allowable grant expenditures are included on the SEFA and are accumulated, and recognized on the appropriate basis.
“A non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of the Uniform Guidance Part 2 CFR section 200.50 (a). In order to accomplish this, “The auditee must also 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 § 200.502” per Part 2 CFR section 200.510 (b) of the Uniform Guidance. As noted in 2 CFR 200.303 – Internal Control, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States of the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Community Council was not able to provide detail of expenditures recorded on the SEFA to facilitate sampling and testing. For most awards there were no invoices or other required audit evidence and required reporting of costs was not maintained. Cause: No detail of expenditures or supporting grant documents were maintained. Effect: Noncompliance with Federal regulations. Questioned Costs: See questioned cost indicated in finding 2023-001. Context: As part of the single audit testing of allowable cost included on the SEFA, we were unable to determine compliance due to the lack of records. Identification of Repeat Finding: 2020-003, 2021-003, 2022-003 Recommendation: We recommend that management develop policies and procedures to ensure that grant expenditures are appropriately captured based on federal regulations and are properly supported.
2023-011 OA Statewide SEFA DOA controls and procedures related to the preparation of the statewide Schedule of Expenditures of Federal Awards (SEFA) were not sufficient; and as a result, a complete and accurate SEFA was not prepared timely for the year ended June 30, 2023. The statewide SEFA reported the state expended approximately $20.9 billion in federal funds in the year ended June 30, 2023. Each state agency and office prepares and submits a SEFA survey to the DOA and the DOA compiles the statewide SEFA. The SEFA reports total expenditures and amounts passed through to subrecipients for each federal program, and is supported by the Notes to the SEFA (Notes). The SEFA is a key component of the annual Single Audit, which is required to be completed no later than 9 months after fiscal year-end (March 31, 2024, for the year ended June 30, 2023). In addition to providing an opinion on the SEFA, the State Auditor's Office uses the SEFA for many critical Single Audit tasks including determining and identifying Type A and large Type B thresholds and programs, determining major federal programs, and ensuring required audit procedures are performed. Untimely SEFA The year ended June 30, 2023, SEFA was not prepared by the DOA until February 28, 2024, 8 months after fiscal year end and 1 month before the Single Audit reporting deadline. Because the DOA prepares the SEFA after the State of Missouri Annual Comprehensive Financial Report (ACFR) draft has been prepared, and the fiscal year 2023 ACFR draft was prepared over 7 months after fiscal year end, the fiscal year 2023 preparation of the SEFA was delayed. The delayed preparation of the SEFA negatively impacted the completion of various Single Audit tasks, and contributed to the delay in issuance of the fiscal year 2023 Single Audit. The DOA has indicated that staff turnover and increased workload in other areas contributed to the delayed SEFA. Regulation 2 CFR 200.512 requires the state to submit its Single Audit report to the Federal Audit Clearinghouse no later than 9 months after the fiscal year-end. SEFA errors The fiscal year ended June 30, 2023, SEFA and Notes included various errors and misstatements including: • The Emergency Solutions Grant Program (Assistance Listing No. 14.231) and the COVID-19 - Emergency Rental Assistance Program (Assistance Listing No. 21.023) were not included in the SEFA. Expenditures for these programs totaled $1,542,983 and $9,514,168, respectively. After we notified the DOA of these errors, the DOA revised the statewide SEFA. • The Unemployment Insurance program (Assistance Listing No. 17.225) expenditures reported in the SEFA were $7,059,661 more than the amount reported in Note 2 - Unemployment Insurance Expenditures. In addition, the Notes did not include the correct program name. After we notified the DOA of these errors, the DOA revised the statewide SEFA and the Notes. • Amounts shown in the "Amount Provided to Subrecipients" column for some programs were overstated because the DOA lacks procedures to ensure amounts transferred from one state agency to another state agency are not reported in this column. For example, the amount reported for the Child Care and Development Block Grant (Assistance Listing No. 93.575) was overstated by $19,486,185, which represents transfers from the Department of Social Services to the Department of Elementary and Secondary Education. Part 3-M-1 of the Compliance Supplement states, "Transfers of federal awards to another component of the same auditee under 2 CFR Part 200, Subpart F, do not constitute a subrecipient or contractor relationship." Since this error did not result in a material misstatement to the SEFA, no correction was made by the DOA. The errors occurred without detection due to (1) staff turnover, (2) inadequate documented procedures for preparing the SEFA, and (3) inadequate review procedures. Conclusions Strong internal control is necessary to ensure the SEFA is prepared timely, accurately, and in compliance with federal requirements. Regulation 2 CFR Section 200.510(b) requires the recipient of federal awards to prepare a SEFA including federal awards expended for each federal program. Regulation 2 CFR Section 200.303(a) requires the non-federal entity to "[e]stablish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Recommendation The OA through the DOA strengthen controls and procedures to prepare a timely and accurate statewide SEFA. Such procedures should provide for proper reporting of subrecipient amounts. Auditee's Response We agree with the auditor's finding. Our Corrective Action Plan includes our planned actions to address the finding.
2023-011 OA Statewide SEFA DOA controls and procedures related to the preparation of the statewide Schedule of Expenditures of Federal Awards (SEFA) were not sufficient; and as a result, a complete and accurate SEFA was not prepared timely for the year ended June 30, 2023. The statewide SEFA reported the state expended approximately $20.9 billion in federal funds in the year ended June 30, 2023. Each state agency and office prepares and submits a SEFA survey to the DOA and the DOA compiles the statewide SEFA. The SEFA reports total expenditures and amounts passed through to subrecipients for each federal program, and is supported by the Notes to the SEFA (Notes). The SEFA is a key component of the annual Single Audit, which is required to be completed no later than 9 months after fiscal year-end (March 31, 2024, for the year ended June 30, 2023). In addition to providing an opinion on the SEFA, the State Auditor's Office uses the SEFA for many critical Single Audit tasks including determining and identifying Type A and large Type B thresholds and programs, determining major federal programs, and ensuring required audit procedures are performed. Untimely SEFA The year ended June 30, 2023, SEFA was not prepared by the DOA until February 28, 2024, 8 months after fiscal year end and 1 month before the Single Audit reporting deadline. Because the DOA prepares the SEFA after the State of Missouri Annual Comprehensive Financial Report (ACFR) draft has been prepared, and the fiscal year 2023 ACFR draft was prepared over 7 months after fiscal year end, the fiscal year 2023 preparation of the SEFA was delayed. The delayed preparation of the SEFA negatively impacted the completion of various Single Audit tasks, and contributed to the delay in issuance of the fiscal year 2023 Single Audit. The DOA has indicated that staff turnover and increased workload in other areas contributed to the delayed SEFA. Regulation 2 CFR 200.512 requires the state to submit its Single Audit report to the Federal Audit Clearinghouse no later than 9 months after the fiscal year-end. SEFA errors The fiscal year ended June 30, 2023, SEFA and Notes included various errors and misstatements including: • The Emergency Solutions Grant Program (Assistance Listing No. 14.231) and the COVID-19 - Emergency Rental Assistance Program (Assistance Listing No. 21.023) were not included in the SEFA. Expenditures for these programs totaled $1,542,983 and $9,514,168, respectively. After we notified the DOA of these errors, the DOA revised the statewide SEFA. • The Unemployment Insurance program (Assistance Listing No. 17.225) expenditures reported in the SEFA were $7,059,661 more than the amount reported in Note 2 - Unemployment Insurance Expenditures. In addition, the Notes did not include the correct program name. After we notified the DOA of these errors, the DOA revised the statewide SEFA and the Notes. • Amounts shown in the "Amount Provided to Subrecipients" column for some programs were overstated because the DOA lacks procedures to ensure amounts transferred from one state agency to another state agency are not reported in this column. For example, the amount reported for the Child Care and Development Block Grant (Assistance Listing No. 93.575) was overstated by $19,486,185, which represents transfers from the Department of Social Services to the Department of Elementary and Secondary Education. Part 3-M-1 of the Compliance Supplement states, "Transfers of federal awards to another component of the same auditee under 2 CFR Part 200, Subpart F, do not constitute a subrecipient or contractor relationship." Since this error did not result in a material misstatement to the SEFA, no correction was made by the DOA. The errors occurred without detection due to (1) staff turnover, (2) inadequate documented procedures for preparing the SEFA, and (3) inadequate review procedures. Conclusions Strong internal control is necessary to ensure the SEFA is prepared timely, accurately, and in compliance with federal requirements. Regulation 2 CFR Section 200.510(b) requires the recipient of federal awards to prepare a SEFA including federal awards expended for each federal program. Regulation 2 CFR Section 200.303(a) requires the non-federal entity to "[e]stablish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Recommendation The OA through the DOA strengthen controls and procedures to prepare a timely and accurate statewide SEFA. Such procedures should provide for proper reporting of subrecipient amounts. Auditee's Response We agree with the auditor's finding. Our Corrective Action Plan includes our planned actions to address the finding.
2023-011 OA Statewide SEFA DOA controls and procedures related to the preparation of the statewide Schedule of Expenditures of Federal Awards (SEFA) were not sufficient; and as a result, a complete and accurate SEFA was not prepared timely for the year ended June 30, 2023. The statewide SEFA reported the state expended approximately $20.9 billion in federal funds in the year ended June 30, 2023. Each state agency and office prepares and submits a SEFA survey to the DOA and the DOA compiles the statewide SEFA. The SEFA reports total expenditures and amounts passed through to subrecipients for each federal program, and is supported by the Notes to the SEFA (Notes). The SEFA is a key component of the annual Single Audit, which is required to be completed no later than 9 months after fiscal year-end (March 31, 2024, for the year ended June 30, 2023). In addition to providing an opinion on the SEFA, the State Auditor's Office uses the SEFA for many critical Single Audit tasks including determining and identifying Type A and large Type B thresholds and programs, determining major federal programs, and ensuring required audit procedures are performed. Untimely SEFA The year ended June 30, 2023, SEFA was not prepared by the DOA until February 28, 2024, 8 months after fiscal year end and 1 month before the Single Audit reporting deadline. Because the DOA prepares the SEFA after the State of Missouri Annual Comprehensive Financial Report (ACFR) draft has been prepared, and the fiscal year 2023 ACFR draft was prepared over 7 months after fiscal year end, the fiscal year 2023 preparation of the SEFA was delayed. The delayed preparation of the SEFA negatively impacted the completion of various Single Audit tasks, and contributed to the delay in issuance of the fiscal year 2023 Single Audit. The DOA has indicated that staff turnover and increased workload in other areas contributed to the delayed SEFA. Regulation 2 CFR 200.512 requires the state to submit its Single Audit report to the Federal Audit Clearinghouse no later than 9 months after the fiscal year-end. SEFA errors The fiscal year ended June 30, 2023, SEFA and Notes included various errors and misstatements including: • The Emergency Solutions Grant Program (Assistance Listing No. 14.231) and the COVID-19 - Emergency Rental Assistance Program (Assistance Listing No. 21.023) were not included in the SEFA. Expenditures for these programs totaled $1,542,983 and $9,514,168, respectively. After we notified the DOA of these errors, the DOA revised the statewide SEFA. • The Unemployment Insurance program (Assistance Listing No. 17.225) expenditures reported in the SEFA were $7,059,661 more than the amount reported in Note 2 - Unemployment Insurance Expenditures. In addition, the Notes did not include the correct program name. After we notified the DOA of these errors, the DOA revised the statewide SEFA and the Notes. • Amounts shown in the "Amount Provided to Subrecipients" column for some programs were overstated because the DOA lacks procedures to ensure amounts transferred from one state agency to another state agency are not reported in this column. For example, the amount reported for the Child Care and Development Block Grant (Assistance Listing No. 93.575) was overstated by $19,486,185, which represents transfers from the Department of Social Services to the Department of Elementary and Secondary Education. Part 3-M-1 of the Compliance Supplement states, "Transfers of federal awards to another component of the same auditee under 2 CFR Part 200, Subpart F, do not constitute a subrecipient or contractor relationship." Since this error did not result in a material misstatement to the SEFA, no correction was made by the DOA. The errors occurred without detection due to (1) staff turnover, (2) inadequate documented procedures for preparing the SEFA, and (3) inadequate review procedures. Conclusions Strong internal control is necessary to ensure the SEFA is prepared timely, accurately, and in compliance with federal requirements. Regulation 2 CFR Section 200.510(b) requires the recipient of federal awards to prepare a SEFA including federal awards expended for each federal program. Regulation 2 CFR Section 200.303(a) requires the non-federal entity to "[e]stablish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Recommendation The OA through the DOA strengthen controls and procedures to prepare a timely and accurate statewide SEFA. Such procedures should provide for proper reporting of subrecipient amounts. Auditee's Response We agree with the auditor's finding. Our Corrective Action Plan includes our planned actions to address the finding.
2023-011 OA Statewide SEFA DOA controls and procedures related to the preparation of the statewide Schedule of Expenditures of Federal Awards (SEFA) were not sufficient; and as a result, a complete and accurate SEFA was not prepared timely for the year ended June 30, 2023. The statewide SEFA reported the state expended approximately $20.9 billion in federal funds in the year ended June 30, 2023. Each state agency and office prepares and submits a SEFA survey to the DOA and the DOA compiles the statewide SEFA. The SEFA reports total expenditures and amounts passed through to subrecipients for each federal program, and is supported by the Notes to the SEFA (Notes). The SEFA is a key component of the annual Single Audit, which is required to be completed no later than 9 months after fiscal year-end (March 31, 2024, for the year ended June 30, 2023). In addition to providing an opinion on the SEFA, the State Auditor's Office uses the SEFA for many critical Single Audit tasks including determining and identifying Type A and large Type B thresholds and programs, determining major federal programs, and ensuring required audit procedures are performed. Untimely SEFA The year ended June 30, 2023, SEFA was not prepared by the DOA until February 28, 2024, 8 months after fiscal year end and 1 month before the Single Audit reporting deadline. Because the DOA prepares the SEFA after the State of Missouri Annual Comprehensive Financial Report (ACFR) draft has been prepared, and the fiscal year 2023 ACFR draft was prepared over 7 months after fiscal year end, the fiscal year 2023 preparation of the SEFA was delayed. The delayed preparation of the SEFA negatively impacted the completion of various Single Audit tasks, and contributed to the delay in issuance of the fiscal year 2023 Single Audit. The DOA has indicated that staff turnover and increased workload in other areas contributed to the delayed SEFA. Regulation 2 CFR 200.512 requires the state to submit its Single Audit report to the Federal Audit Clearinghouse no later than 9 months after the fiscal year-end. SEFA errors The fiscal year ended June 30, 2023, SEFA and Notes included various errors and misstatements including: • The Emergency Solutions Grant Program (Assistance Listing No. 14.231) and the COVID-19 - Emergency Rental Assistance Program (Assistance Listing No. 21.023) were not included in the SEFA. Expenditures for these programs totaled $1,542,983 and $9,514,168, respectively. After we notified the DOA of these errors, the DOA revised the statewide SEFA. • The Unemployment Insurance program (Assistance Listing No. 17.225) expenditures reported in the SEFA were $7,059,661 more than the amount reported in Note 2 - Unemployment Insurance Expenditures. In addition, the Notes did not include the correct program name. After we notified the DOA of these errors, the DOA revised the statewide SEFA and the Notes. • Amounts shown in the "Amount Provided to Subrecipients" column for some programs were overstated because the DOA lacks procedures to ensure amounts transferred from one state agency to another state agency are not reported in this column. For example, the amount reported for the Child Care and Development Block Grant (Assistance Listing No. 93.575) was overstated by $19,486,185, which represents transfers from the Department of Social Services to the Department of Elementary and Secondary Education. Part 3-M-1 of the Compliance Supplement states, "Transfers of federal awards to another component of the same auditee under 2 CFR Part 200, Subpart F, do not constitute a subrecipient or contractor relationship." Since this error did not result in a material misstatement to the SEFA, no correction was made by the DOA. The errors occurred without detection due to (1) staff turnover, (2) inadequate documented procedures for preparing the SEFA, and (3) inadequate review procedures. Conclusions Strong internal control is necessary to ensure the SEFA is prepared timely, accurately, and in compliance with federal requirements. Regulation 2 CFR Section 200.510(b) requires the recipient of federal awards to prepare a SEFA including federal awards expended for each federal program. Regulation 2 CFR Section 200.303(a) requires the non-federal entity to "[e]stablish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Recommendation The OA through the DOA strengthen controls and procedures to prepare a timely and accurate statewide SEFA. Such procedures should provide for proper reporting of subrecipient amounts. Auditee's Response We agree with the auditor's finding. Our Corrective Action Plan includes our planned actions to address the finding.
2023-011 OA Statewide SEFA DOA controls and procedures related to the preparation of the statewide Schedule of Expenditures of Federal Awards (SEFA) were not sufficient; and as a result, a complete and accurate SEFA was not prepared timely for the year ended June 30, 2023. The statewide SEFA reported the state expended approximately $20.9 billion in federal funds in the year ended June 30, 2023. Each state agency and office prepares and submits a SEFA survey to the DOA and the DOA compiles the statewide SEFA. The SEFA reports total expenditures and amounts passed through to subrecipients for each federal program, and is supported by the Notes to the SEFA (Notes). The SEFA is a key component of the annual Single Audit, which is required to be completed no later than 9 months after fiscal year-end (March 31, 2024, for the year ended June 30, 2023). In addition to providing an opinion on the SEFA, the State Auditor's Office uses the SEFA for many critical Single Audit tasks including determining and identifying Type A and large Type B thresholds and programs, determining major federal programs, and ensuring required audit procedures are performed. Untimely SEFA The year ended June 30, 2023, SEFA was not prepared by the DOA until February 28, 2024, 8 months after fiscal year end and 1 month before the Single Audit reporting deadline. Because the DOA prepares the SEFA after the State of Missouri Annual Comprehensive Financial Report (ACFR) draft has been prepared, and the fiscal year 2023 ACFR draft was prepared over 7 months after fiscal year end, the fiscal year 2023 preparation of the SEFA was delayed. The delayed preparation of the SEFA negatively impacted the completion of various Single Audit tasks, and contributed to the delay in issuance of the fiscal year 2023 Single Audit. The DOA has indicated that staff turnover and increased workload in other areas contributed to the delayed SEFA. Regulation 2 CFR 200.512 requires the state to submit its Single Audit report to the Federal Audit Clearinghouse no later than 9 months after the fiscal year-end. SEFA errors The fiscal year ended June 30, 2023, SEFA and Notes included various errors and misstatements including: • The Emergency Solutions Grant Program (Assistance Listing No. 14.231) and the COVID-19 - Emergency Rental Assistance Program (Assistance Listing No. 21.023) were not included in the SEFA. Expenditures for these programs totaled $1,542,983 and $9,514,168, respectively. After we notified the DOA of these errors, the DOA revised the statewide SEFA. • The Unemployment Insurance program (Assistance Listing No. 17.225) expenditures reported in the SEFA were $7,059,661 more than the amount reported in Note 2 - Unemployment Insurance Expenditures. In addition, the Notes did not include the correct program name. After we notified the DOA of these errors, the DOA revised the statewide SEFA and the Notes. • Amounts shown in the "Amount Provided to Subrecipients" column for some programs were overstated because the DOA lacks procedures to ensure amounts transferred from one state agency to another state agency are not reported in this column. For example, the amount reported for the Child Care and Development Block Grant (Assistance Listing No. 93.575) was overstated by $19,486,185, which represents transfers from the Department of Social Services to the Department of Elementary and Secondary Education. Part 3-M-1 of the Compliance Supplement states, "Transfers of federal awards to another component of the same auditee under 2 CFR Part 200, Subpart F, do not constitute a subrecipient or contractor relationship." Since this error did not result in a material misstatement to the SEFA, no correction was made by the DOA. The errors occurred without detection due to (1) staff turnover, (2) inadequate documented procedures for preparing the SEFA, and (3) inadequate review procedures. Conclusions Strong internal control is necessary to ensure the SEFA is prepared timely, accurately, and in compliance with federal requirements. Regulation 2 CFR Section 200.510(b) requires the recipient of federal awards to prepare a SEFA including federal awards expended for each federal program. Regulation 2 CFR Section 200.303(a) requires the non-federal entity to "[e]stablish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award." Recommendation The OA through the DOA strengthen controls and procedures to prepare a timely and accurate statewide SEFA. Such procedures should provide for proper reporting of subrecipient amounts. Auditee's Response We agree with the auditor's finding. Our Corrective Action Plan includes our planned actions to address the finding.
Finding 2023-002 - Schedule of Expenditures of Federal Awards (Material Weakness) CFDA Title and Number 66.468 Drinking Water State Revolving Fund Name of Federal Agency: Environmental Protection Agency Compliance/Internal Control over Compliance: Auditee Responsibilities Criteria: CFR Part 200.508, CFR Part 200.510, Auditee Responsibilities state that the auditee must prepare the Schedule of Expenditures of Federal Awards, which must list individual Federal awards by Federal Agency, including the total Federal awards expended, name of the pass-through entity, CFDA number, and total amount provided to subrecipients. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was not presented for audit. The City was unaware that funds borrowed through Business Oregon were federally sourced. Cause: The loan documents that were provided to the City were modified and date back several years. No individual, including those employed by the City, project managers engaged by the City, and pass-through managers were apparently aware that the loan proceeds were from federal sources. Consequently, no internal controls were designed or implemented regarding accounting for or preparation of the SEFA. The City did not provide a reconciliation of the expenditures of federal awards with amounts reported on the City’s general ledger. Effect or Potential Effect: Expenditures of federal awards and not be detected and corrected. Because the Auditee’s SEFA was completed incorrectly, and not reconciled to the general ledger the SEFA was materially misstated, prior to auditors’ correction recommendations. Questioned Cost: No Context: Lack of adequate controls over the Schedule of Expenditures of Federal Awards and related accounting resulted in the following: • No SEFA was originally presented for auditors. • No reconciliation between federal expenditures reported on the GL and the SEFA was presented. Repeat of a Prior-Year Finding: Yes 2022-002 Recommendation: We recommend that the City establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Internal controls should be designed to prevent, detect, or correct errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The City should provide appropriate training to staff who are assigned to prepare and review the SEFA. City’s Response: The City acknowledges the deficiencies. Corrective Action Plan: The City will establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Planned Implementation Date: October 1, 2024 Responsible Person: City Manager
Finding 2023-002 - Schedule of Expenditures of Federal Awards (Material Weakness) CFDA Title and Number 84.425 Education Stabilization Fund Name of Federal Agency: U.S. Department of Education CFDA Title and Number 10.555 National School Lunch Program cluster Name of Federal Agency: U.S. Department of Agriculture Compliance/Internal Control over Compliance: Auditee Responsibilities Criteria: CFR Part 200.508, CFR Part 200.510, Auditee Responsibilities state that the auditee must prepare the Schedule of Expenditures of Federal Awards, which must list individual Federal awards by Federal Agency, including the total Federal awards expended, name of the pass-through entity, CFDA number, and total amount provided to subrecipients. The information contained in the Schedule of Expenditures of Federal Awards should be derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. Condition: The Schedule of Expenditures of Federal Awards (SEFA) was presented for audit with values that were not reconciled with the general ledger. Cause: The District relied on individuals with insufficient training or support to prepare the SEFA and ensure that it was reconciled with general ledger amounts. District management did not have sufficient training or monitoring policies to recognize and correct the deficiency. Effect or Potential Effect: Expenditures of federal awards and not be detected and corrected. Because the Auditee’s SEFA was completed incorrectly, and not reconciled to the general ledger the SEFA was materially misstated, prior to auditors’ correction recommendations. Questioned Cost: No Context: Lack of adequate controls over the Schedule of Expenditures of Federal Awards and related accounting resulted in the following: • SEFA was originally presented for auditors with incorrect information. • No reconciliation between federal expenditures reported on the GL and the SEFA was presented. Repeat of a Prior-Year Finding: No Recommendation: We recommend that the District establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Internal controls should be designed to prevent, detect, or correct errors in a timely manner by performing periodic reconciliations of the SEFA information to the general ledger throughout the fiscal year. The District should provide appropriate training to staff who are assigned to prepare and review the SEFA. District’s Response: The District acknowledges the deficiencies. Corrective Action Plan: The District will establish policies and procedures to ensure that all Federal awards are identified and reported accurately on future SEFAs. Planned Implementation Date: October 1, 2024 Responsible Person: Director of Business Services, Yamhill County School District No. 8