Finding 1074592 (2023-003)

“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.