Finding Text
2024-001 Significant deficiency related to preparation of the schedule of federal awards
Criteria: Recipients of federal awards must prepare an accurate and complete Schedule of Expenditures of Federal Awards (SEFA) in accordance with Uniform Guidance (§200.510). Effective internal controls should ensure the accuracy of this schedule.
Condition: The SEFA initially provided contained errors, including unreported assistance listing numbers, misclassification of amounts between federal and state grant totals, and discrepancies in reported amounts.
Context: The SEFA is a critical component of federal compliance, providing transparency and accountability for the use of federal funds. Errors can result in noncompliance, delays, or audit findings.
Effect: Inaccuracies in the SEFA increase the risk of regulatory scrutiny and inefficiencies in the Single Audit process.
Cause: There is not a formal process for reconciling federal expenditures to the general ledger and reviewing SEFA details for accuracy.
Recommendation: We recommend implementing a documented SEFA preparation process, assigning a reviewer to ensure accuracy, and providing staff training on Uniform Guidance standards. A checklist or similar tool could enhance consistency and completeness.
Views of Responsible Officials: Management agrees with the recommendation and will take necessary steps to address the issue. These steps include developing a formal SEFA preparation process, reconciling federal expenditures to the general ledger, training staff on Uniform Guidance requirements, and instituting a review process to ensure accuracy. Management anticipates implementing these corrective actions prior to the next audit cycle.