Finding Text
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.