Finding Text
Condition: The Organization erroneously recorded a prior year subaward expense as a 2023 subaward expense. This was missed during the Chief Financial Officer's review of subaward invoices and during the Chief Executive Officer's overall review of the Statement of Expenditure of Federal Awards.
Criteria: Under 2 CFR §200.332, pass through entities are required to review financial and performance reports of subawardees to ensure accurate reporting and cutoff of invoices related to subawards.
Cause: The client does not have sufficient controls in place to ensure accurate reporting and cutoff of invoices related to subawards.
Effect: The preliminary Statement of Expenditure of Federal Awards ("SEFA") was understated in the current period.
Questioned costs: None.
Recommendation: Management should review subaward invoices after year-end to determine proper recording in the proper period to which it relates.
Views of responsible officials: Management of the Organization agrees with the finding. Management plans to review and revise existing policies and procedures to ensure accurate recording and proper cutoff of invoices related to subawards.