Finding Text
2024-001 – Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Significant Deficiency) Criteria: According to 2 CFR 200.210(b), a recipient of Federal awards is required to prepare a SEFA for the period covered by the entity’s financial statement which must include the total Federal awards expended. In addition, 2 CFR 200.303 requires non-Federal entities to, among other things, establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Effective internal controls should include procedures to ensure expenditures are properly reported on the SEFA. In addition to providing an accurate SEFA, an organization must also be able to demonstrate that it has a system of internal control that supports the preparation of the SEFA. Condition: The University did not have an adequate process in place to prepare and review its SEFA. Cause: The University’s internal control process for preparing the SEFA did not include review and approval of the SEFA prior to providing it to the auditor. Effect: Failure to accurately report federal expenditures on the SEFA could result in noncompliance with federal regulations. Recommendation: We recommend the University establish, document, and maintain effective internal controls over the preparation of the SEFA. At a minimum, an organization should be able to show documentation that the SEFA was reviewed and approved by an individual who was not directly involved with the initial preparation of the SEFA. The review process should include checking both the reported expenditures of federal awards and the assistance listing numbers reported for each grant program. Action Taken: Management has put in place the following procedures: We will establish, document and maintain effective internal control over Federal awards by performing reconciliation of federal funds at the end of each trimester. The account reconciled will be listed on the SEFA. The Director of Financial Aid will be responsible for preparing the SEFA. It will be reviewed and re-reconciled by the Business Systems Analyst and the FA Asst. Director. Reports used to reconcile come from our Sonis system and are the Award Summary Detail and the Charges and Credits reports. Responsible Party and contact information: Valerie Souza, FA Business Systems Analyst and Lynda Swanson, Asst. Director of Financial Aid. Expected Date of Correction: At the end of each trimester. Full completion of processes will be at the end of our fiscal year/calendar year when audit preparation begins.