Finding Text
Finding 2023-002: Schedule of Expenditures of Federal Awards (Significant Deficiency)
Federal Program: 93.129 - U.S. Department of Health and Human Services
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), the
Organization is required to prepare appropriate financial statements, including the Schedule of
Expenditures of Federal Awards (SEFA).
Condition: The Organization included expenditures in its SEFA totaling $9,175 that were in
excess of allowable costs for the year ended December 31, 2023. As a result, management
provided a revised SEFA after the major program determination had already been completed.
Because the Organization had not billed the government for the excess expenditures, there were
no questioned costs.
Cause: The initial SEFA provided by management at the start of the audit was based on the profit
and loss statements, which are used to track both federal and non-federal expenditures. However,
the profit and loss statements did not specifically identify the non-federal expenditures which were
not allowed to be charged to the federal award.
Effect or Potential Effect: The SEFA could have been materially misstated. If the SEFA is not
accurately prepared, it could have an effect on the auditor's determination of major programs.
Recommendation: The Organization should implement procedures to ensure the accurate
preparation of the SEFA prior to the start of the audit.