Finding Text
Finding 2023-003, Significant Deficiency Over Financial Reporting
Identification of federal program : U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 93.224 and 93.527 Health Center Program Cluster
Criteria : In accordance with 2CFR200.510(b) Auditees are responsible for the preparation of the Schedule of Expenditures of Federal Awards (SEFA) that includes the total federal awards expended. The auditee is also responsible to ensure the SEFA includes cluster names, a list of individual Federal programs within the clusters and total for the clusters.
Condition : The Organization provided a SEFA that did not identify the Health Center Program Cluster and all federal awards included within that cluster. In addition, the SEFA included an award that was not a federal award.
Cause : Management has not implemented effective internal controls surrounding the preparation of the SEFA.
Potential effect : Failure to appropriately identify total federal awards expended and clusters could result in inappropriate selection of major programs or inaccurate audit coverage needed in a single audit.
Questioned costs: None.
Recommendation: We recommend that the Organization implement accounting processes and controls over financial reporting to ensure accurate preparation of the SEFA.
Views of responsible officials and planned corrective actions: Although Management agrees with what is written and recommended, Management disagrees with the identification of this issue as a significant deficiency. In the past, the SEFA was conducted by auditors. The regulation changed and for the last three years Shalom has been preparing for the SEFA. During these three years, previous auditors have made changes and adjustments but never identified this matter as a significant deficiency. Therefore, Management believes this matter should be a note rather than a significant weakness.