Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 14.218, U.S. Department of Housing and Urban Development, Community Development Block Grant Entitlement Grants Cluster
Federal Award Identification Number and Year - N/A
Passthrough Entity - 66.818, Brownfields Assessment and Cleanup of Cooperative Agreements is direct funded.
14.218, Community Development Block Grant is passed through Wayne County, Michigan.
Finding Type - Material weakness
Repeat Finding - No
Criteria - The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of Federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule.
Condition - The schedule of expenditures of federal awards (SEFA) was not accurate.
Questioned Costs - None
Identification of How Questioned Costs Were Computed - N/A
Context - During the fiscal year ended September 30, 2022, the City expended approximately $921,000 of federal funding. The initial draft of the SEFA included the following inaccuracies:
ALN 66.818 The expenditures reported on the SEFA were understated by $125,687.
ALN 14.218 The expenditures reported on the SEFA were understated by $80,468.
The errors noted above have been corrected on the SEFA as of September 30, 2022.
Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit, as the City did not include use of program income in its review of federal expenditures. The errors resulted in the understatement of federal expenditures, as noted in the context above. Additionally, the understatement of federal expenditures on the SEFA resulted in the incorrect conclusion that federal activity was below $750,000, and, therefore, a single audit was not needed.
Recommendation - We recommend the City implement a process to ensure that the SEFA is complete and accurate.
Views of Responsible Officials and Corrective Action Plan - The City will review its process for identifying and communicating Federal Grant expenditures to its auditors.