Finding Text
Design of controls to identify non-cash assistance.
Federal Agency: U.S. Department of the Treasury
Federal program title: COVID-19 – Coronavirus State and Local Fiscal Recovery Funds
AL Number: 21.027
Award Period: June 8, 2023 – December 1, 2023
Type of Finding: Material Weakness in Internal Control over Compliance
Criteria: According to §200.303 Internal Controls of 2 CFR Part 200, the non-federal entity’s financial
management systems, including records documenting compliance with Federal Statutes, regulations, and
the terms and conditions of the federal award, must be sufficient to permit the preparation of reports
required by general and program-specific terms and conditions. Further, the financial management
system of each non-federal entity must provide accurate, current, and complete disclosure of the financial
results of each federal award or program, in accordance with the reporting requirements. According to
§200.502(b) of 2 CFR Part 200, the non-federal entity must include the value of federal non-cash
assistance in the SEFA at fair market value at time of receipt.
Condition and context: The Organization’s internal controls over preparing the schedule of
expenditures of federal awards (SEFA) have not been designed to prevent or detect errors related to the
completeness of non-cash assistance. When the Organization received donated property from the State
of Oregon purchased using federal award funds from the Coronavirus State and Local Fiscal Recovery
Fund, the Organization did not include the property as non-cash assistance on the preliminary SEFA.
Questioned Costs: None noted.
Cause: The Organization did not have procedures or controls in place to identify federal non-cash
assistance because the Organization does not often receive such assistance. The Organization's
procedures for significant unusual transactions did not include researching the SEFA reporting
implications of significant unusual transactions.
Effect: The preliminary SEFA excluded $801,753 of non-cash assistance related to program 21.027,
which is a program identified as higher risk in the 2023 compliance supplement. No changes to the other
financial statements were needed and the final SEFA was corrected to reflect the change.
Repeat finding: This is not a repeat finding.
Recommendations: We recommend the Organization develop and implement a review process to
identify non-standard expenditures of federal awards including non-cash assistance and loans. The
Organization should adjust its procedures and controls over significant unusual transactions to consider
the federal compliance and reporting requirements related to these transactions.
Views of Responsible Officials: Management concurs with the finding.