Finding Text
Improve Procedures over the Preparation of the Schedule of Expenditure of Federal Awards (Material Weakness)
As part of our audit procedures, we audit the completeness and the accuracy of the Schedule of Expenditures of Federal Awards. Management is responsible for the preparation of the Schedule of Expenditures of Federal Awards in accordance with the requirements of the Uniform Guidance. This schedule is an integral component of the Organization’s reporting in accordance with the Uniform Guidance as it identifies total federal awards expended for each individual federal program and it serves as the primary basis for the auditor’s major program determination. During our audit, we became aware of evidence which indicated that in a prior year loans that had been thought to be forgiven by USDA were in fact repurchased by USDA. The debt should have been reflected on the Schedule of Expenditures of Federal Awards under the Section 538 program. The Schedule of Expenditures of Federal Awards was corrected during the audit; however, it appears the errors were made due to a lack of sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards.
Recommendation - We recommend that the Organization implement adequate procedures, including staff training and a formal review and verification process by supervisory personnel, as part of its annual process to prepare the Schedule of Expenditures of Federal Awards in order to ensure its accuracy.
View of Responsible Officials - We agree with the finding. We have implemented procedures to ensure future proper reporting of federal awards in the Schedule of Expenditures of Federal Awards. See our Corrective Action Plan for the fiscal year ended December 31, 2023 for additional detail.