Finding 1056108 (2023-005)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-07-30

AI Summary

  • Core Issue: The Academy failed to report $158,815 in federal expenditures on the Schedule of Expenditures of Federal Awards (SEFA), indicating a material weakness in internal controls.
  • Impacted Requirements: Compliance with 2 CFR § 200.510 and accurate tracking of federal expenditures are not being met, risking violations of federal award agreements.
  • Recommended Follow-Up: The Academy should enhance internal control procedures for reporting and ensure all expenditures are accurately reflected on the SEFA moving forward.

Finding Text

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.

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
10.555 National School Lunch Program $343,499
84.425 Education Stabilization Fund $248,161
84.010 Title I Grants to Local Educational Agencies $228,713
32.009 Emergency Connectivity Fund Program $158,815
10.553 School Breakfast Program $148,850
84.027 Special Education_grants to States $76,070
84.365 English Language Acquisition State Grants $49,393
84.367 Supporting Effective Instruction State Grants $28,192
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $14,509
84.424 Student Support and Academic Enrichment Program $11,879
10.559 Summer Food Service Program for Children $49