Finding Text
Description: Preparation of the schedule of expenditures of Federal awards
Criteria: Title 2, CFR, Part 200, Subpart F - Audit Requirements, section 200.510, Financial
Statements. states in part (b)(3) "Provide total Federal awards expended for each individual Federal
program and the Assistance Listings Number or other identifying number when the Assistance Listings
information is not available."
Condition: During the course of the audit, management presented the auditor with three drafts of the
schedule of expenditures of Federal awards which were all materially misstated. Management
corrected all such misstatements during the course of the single audit.
Cause: Management did not have proper controls in place to ensure that the individuals responsible for
preparing the schedule of Federal awards were properly trained on the preparation requirements.
Effect: The lack of proper training over the preparation of the schedule of expenditures of Federal
awards resulted in material adjustments to the schedule of expenditures of Federal awards during the
course of the audit.
Recommendation: We recommend that management implement internal controls such that individuals
preparing the schedule of expenditures of Federal awards are properly trained on the preparation
requirements.
Management’s Response: Sites Authority staff did not understand the requirements that expenditures
included in the Schedule of Expenditures of Federal Awards (SEFA) be provided on an accrual basis.
As such, the first SEFA submittal was based on actuals. Staff was informed by the auditor that the
SEFA submittal should be based on an accrual basis. The team submitted a SEFA based on an accrual
basis. Staff made a mistake of not including in the SEFA 25% of a $180,000 ($45,000) payment. This
$45,000 omission was less than 0.4% of the total expenditures of $10,697,736 included in the SEFA.
There were 634 invoices processed with thousands of expense items used to prepare the SEFA. Staff
will document in its internal SEFA procedure the appropriate federal CFR sections for SEFAs to ensure
such sections and requirements are met. The recommended training will occur before end of FY24 to
avoid this recurring in the Dec 31, 2024 audit report.