Finding Text
Finding 2023-003: Error in the 2022 SEFA (Significant Deficiency)
Information on the Federal Programs: Both Major Programs
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), an entity is
required to prepare appropriate financial statements, including the Schedule of Expenditures of
Federal Awards (SEFA).
Condition: Management noted that the 2022 SEFA was understated by $146,051. No issues were
noted during the audit regarding the 2023 expenditures reported on the SEFA for the year ended
December 31, 2023. Therefore, this compliance finding is not considered to be a material weakness.
Cause: While the total expenses reported in the 2022 financial statements was correct, $146,051 of
the Federal expenditures were not clearly or properly classified as Federal in the 2022 general
ledger. As a result, expenses totaling $146,051 were not included on the 2022 SEFA.
Effect or Potential Effect: As a result of the understatement of expenditures reported on the 2022
SEFA, a material misstatement of the 2022 financial statements occurred. In addition, the 2023
SEFA includes the unreported 2022 costs of $146,051.
Questioned Costs: None.
Repeat Finding: See Finding 2022-006.
Recommendation: We recommend that management implement procedures to easily segregate
Federal expenditures so that an accurate SEFA can be prepared on a consistent basis.