Finding Text
2024-003 Internal Control over Preparation of the Schedule of Expenditures of Federal Awards (Significant Deficiency – All Awards), Repeated
Criteria – 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.508(b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements.
Condition and Context – Low-Income Home Energy Assistance expenditures were understated by $54,831 as federal LIAP and Assurance 16 funds were not included on the prepared SEFA.
Cause – Insufficient internal controls over the preparation and review process for the SEFA.
Effect – Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. They could also lead to findings and corrective action with funders.
Questioned Costs – None
Recommendations – The Organization should strengthen its review process to ensure that federal award program revenue reported in the statement of activities reconciles to the amounts reported on the SEFA. As part of this review, all required minimum elements should be traced to original source documentation, including award letters, grant reports, and trial balance profit and loss reports.
Views of Responsible Officials and Planned Corrective Actions – The Finance Director has initiated a training process to ensure that all fiscal team members are equipped to review contracts, grants, and Memorandum of Understanding (MOUs). This includes verifying that all applicable Assistance Listing Numbers (ALNs) are properly identified and that related revenue is accurately tracked within the accounting system. Additionally, a new revenue code has been established to separately track Low-Income Home Energy Assistance Program (LIHEAP) funds from other federal revenues. This ensures accurate reporting and proper classification of federal awards on the Schedule of Expenditures of Federal Awards (SEFA).