Finding Text
Condition: For the fiscal year ended June 30, 2022, we requested that Day One prepare and send us a
Schedule of Expenditures of Federal Awards. Requested that the expenditures reported in the SEFA
be reconciled to Day One’s accounting records. We reviewed the SEFA and compared them to the
accounting records; we noted that the expenditures reported were inaccurate.
Criteria: Recipients of federal awards are subject to requirements documented in section of the
Uniform Guidance Sections 200.510, 200.502, and 200.302. The criteria for each are as follows:
§ 200.510 Financial statements
(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee's financial statements which
must include the total Federal awards expended as determined in accordance with § 200.502.”
§ 200.502 Basis for determining Federal awards expended
(a) Determining Federal awards expended. The determination of when a federal award is expended
must be based on when the activity related to the Federal award occurs. Generally, the activity
pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and
the terms and conditions of Federal awards, such as: expenditure/expense transactions associated
with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian
Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to
subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of
property; the receipt of surplus property; the receipt or use of program income; the distribution or use
of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest
subsidy; and the period when insurance is in force.
§ 200.302 Financial management
(a) Each state must expend and account for the Federal award in accordance with state laws and
procedures for expending and accounting for the state's own funds. In addition, the state's and the
other non-Federal entity's financial management systems, including records documenting compliance
with Federal statutes, regulations, and the terms and conditions of the Federal award, must be
sufficient to permit the preparation of reports required by general and program-specific terms and
conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds
have been used according to the Federal statutes, regulations, and the terms and conditions of the
Federal award.The financial management system of each non-Federal entity must provide for
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or
program in accordance with the reporting requirements…..”
Questioned Costs: None
Cause: The Organization has not implemented policies and procedures requiring that the Schedule of
Federal Awards to complete and accurate.
Effect and Context: The Organization reported expenditures that exceeded $750,000 for 2022. In
determining the major program to be audited for 2022, the auditor could not rely on the SEFA
provided because the SEFA was not complete and expenditures reported were inaccurate. Which
could have lead to an inaccurate reporting of federal expenditures for the Organization for 2022.
Recommendation: We recommend that management implement policies and procedures requiring all
federal expenditures be accurately reported in the year end Schedule of Federal Awards.
Management’s Response and Corrective Action Plan: See management’s responses documented on
page 46-47.