Finding Text
Inaccurate Reporting Schedule of Expenditures of Federal Awards and State Financial Assistance.
Condition: During our initial testing of the Disaster Grants - Public Assistance (Presidentially Declared Disasters) grant (ALN#97.036), the auditor identified approximately $538,000 in obligated advanced funds from FEMA that were initally reported in the Schedule of Expenditures of Federal Awards and State Financial Assistance ("SEFA"). However, the District had not yet incurred the corresponding expenditures. As a result, the expendture was initally recorded and improperly reflected in the SEFA as a federal award expenditure. The removal of the expenditure amount reduced the Disaster Grant from a Major Type A Program to a Non-Major Type B Program and decreased the federal award expenditure amount by approximately $538,000. Accordingly, these adjustments required the auditor to modify its testing procedures in accordance with the Uniform Guidance.
Additionally, the SEFA provided by the District's staff incorrectly reported three (3) expenditures related to CSFA #37.039 (Statewide Water Quality Restoration Projects) totaling approximately $205,000 for services that were performed in previous fiscal years but were presented as a state financial assistance expenditure in the SEFA for the fiscal yedar ended September 30, 2024.
Cause: Lack of sufficient review controls over the prepareation and review of the SEFA.
Effect: The SEFA was not accurately prepared and could result in incorrect reporting of expenditures to federal and state agencies.
Recommendation: We recommend that the staff responsible for the preparation of the SEFA and monitoring of Federal and State Awards receive additional training to possess a thorough understanding of Disaster Grants and their related program requirements. Additionally, the SEFA should be reviewed and approved by management personnel identied by the District who possesses the adequate knowledge and expertise. Such review and approval should take place during the District's financial close process.