Finding 1136704 (2024-001)

2024-001: Environmental Protection Agency – Assistance Listing No. 66.960, Greenhouse Gas Reduction Fund: Clean Communities Investment Accelerator, Significant Deficiency Criteria and Condition: Recipients of federal funds are required to prepare a complete and accurate Schedule of Expenditures of Federal Awards. Additionally, recipients must establish and maintain effective internal controls over federal awards to provide reasonable assurance of accurate financial reporting Context: The Company updated the 2024 Schedule of Expenditures of Federal Awards by a material amount, a result of issues identified during review of subsequent disbursements in the financial statement audit. Cause: The error occurred due to insufficient controls over the process for capturing and reconciling all expenditures incurred during the period to be included on the SEFA. Effect: The SEFA initially provided understated total federal expenditures and excluded a material portion of major program activity. Recommendation: We recommend that the Company implement enhanced SEFA preparation and review procedures, including a reconciliation of SEFA amounts to general ledger activity and verification that all applicable federal awards are included. Views of Responsible Officials and Planned Corrective Actions: We agree with the finding and have established a process to ensure all expenditures are properly included in the SEFA.