Finding Text
Finding 2023-005 – Significant Deficiency
Award No.: All
Federal Grantor: All
Compliance Requirement: Reporting
Condition: The expenditure information provided to report the amounts of the SEFA contained totals representing transfers from other funds instead of individual expenditure amounts.
Criteria: Section 202.302 states in part, “… the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award.”
Cause: The Town does not have a process in place to ensure separate identification of federal expenditures in the accounting system.
Effect: By not maintaining a separate accounting of individual expenditures of federal funds, it is difficult to determine that funds have been used according to Federal regulations.
Recommendation: The Town should ensure individual expenditure detail for federal award expenditures is prepared in the general ledger, or in supplemental listings.
Views of responsible officials and planned corrective actions: We concur with this finding and have implemented individual expenditure detail.