FAC Explorer

Finding 1145308 (2024-003)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2024
Accepted
2025-06-30
Audit: 360603
Organization: Palm Beach County Board of County Commissioners (FL)
Auditor: Rsm US LLP

AI Summary

  • Core Issue: Federal expenditures of $56,503,870 were incorrectly reported for FY 2024 instead of FY 2023 due to a misunderstanding of when to recognize grant-related costs.
  • Impacted Requirements: The Schedule of Expenditures of Federal Awards must accurately reflect expenditures in accordance with 2 CFR 200.510(b) and 2 CFR 200.502.
  • Recommended Follow-Up: Departments should regularly reconcile grant activities and provide timely updates to the Office of Financial Management and Budget; consider additional training on revenue and expenditure recognition for grant personnel.

Finding Text

2024-003 ─ Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) U.S. Department of Transportation – Federal Transit Cluster (ALN No. 20.507) Federal award year 2023 Criteria: In accordance with 2 CFR 200.510(b), the auditee must 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 2 CFR 200.502. 2 CFR Section 200.502(a) states that the determination of when a federal award is expended should 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 grant awards. Condition: We noted that the Schedule of Expenditures of Federal Awards and State Financial Assistance (Schedule) provided to the auditors for the fiscal year ended September 30, 2024 included $56,503,870 of federal expenditures for the Federal Transit Cluster, assistance listing number 20.507, that should have been included in the Schedule for the fiscal year ended September 30, 2023. The County executed an ARPA transportation grant in September 2023 for which prior year eligible incurred costs were applied, however, these expenditures were not reported on the County’s Schedule until FY 2024. The Schedule for fiscal year ended September 30, 2023 was reissued to include the $56,503,870 and the expenditures were removed from the Schedule for the fiscal year ended September 30, 2024. Context: The finding is considered isolated in nature to the federal program in question. Effect: Improper reporting of federal expenditures resulted in a material error on the Schedule. Identification as a repeat finding, if applicable: Yes (2023-006) Cause: The department directly administering this grant did not realize they had to immediately recognize the expenditures associated with the grant at the time of grant award when the decision was made to apply prior eligible incurred costs. The transaction was not recorded until the reimbursement request was submitted in fiscal year 2024. Recommendation: Grant activities including general ledger activity should be reconciled by the departments managing the programs and the information communicated timely to the Office of Financial Management and Budget (OFMB). Depending on the nature and size of the grant programs these reconciliations could occur, monthly, quarterly or yearly, depending on what is most efficient in each individual situation. Also additional training could be provided to help enhance the understanding of grant personnel around some of the important nuances of revenue and expenditure recognition criteria the County must comply with in accordance with generally accepted accounting principles so they provide OFMB with sufficient information to prepare the end of year Schedule or so they can ask questions of OFMB and County Finance and seek assistance for any matters they are unsure of how to process.

Categories

Reporting Cash Management Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 568863 2024-003
    Material Weakness Repeat
  • 568864 2024-003
    Material Weakness Repeat
  • 568865 2024-003
    Material Weakness Repeat
  • 568866 2024-003
    Material Weakness Repeat
  • 568867 2024-003
    Material Weakness Repeat
  • 568868 2024-003
    Material Weakness Repeat
  • 568869 2024-003
    Material Weakness Repeat
  • 1145305 2024-003
    Material Weakness Repeat
  • 1145306 2024-003
    Material Weakness Repeat
  • 1145307 2024-003
    Material Weakness Repeat
  • 1145309 2024-003
    Material Weakness Repeat
  • 1145310 2024-003
    Material Weakness Repeat
  • 1145311 2024-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $6.66M
21.023 Emergency Rental Assistance Program $6.32M
93.914 Hiv Emergency Relief Project Grants $3.06M
97.083 Staffing for Adequate Fire and Emergency Response (safer) $1.84M
93.686 Ending the Hiv Epidemic: A Plan for America — Ryan White Hiv/aids Program Parts A and B $1.81M
20.507 Federal Transit_formula Grants $1.58M
93.044 Special Programs for the Aging, Title Iii, Part B, Grants for Supportive Services and Senior Centers $916,140
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $878,391
93.563 Child Support Services $783,374
93.569 Community Services Block Grant $697,905
20.507 Federal Transit Formula Grants $654,770
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $480,109
14.231 Emergency Solutions Grant Program $475,932
97.132 Financial Assistance for Targeted Violence and Terrorism Prevention $410,328
21.027 Coronavirus State and Local Fiscal Recovery Funds $392,071
16.838 Comprehensive Opioid, Stimulant, and Other Substances Use Program $315,479
16.590 Grants to Encourage Arrest Policies and Enforcement of Protection Orders Program $309,505
11.022 Bipartisan Budget Act of 2018 $290,772
14.401 Fair Housing Assistance Program $259,400
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $237,000
93.499 Low Income Household Water Assistance Program $232,005
16.036 Comprehensive Forensic Dna Analysis Grant Program $220,159
16.575 Crime Victim Assistance $211,981
20.509 Formula Grants for Rural Areas and Tribal Transit Program $200,132
20.616 National Priority Safety Programs $200,000
20.600 State and Community Highway Safety $199,983
16.738 Edward Byrne Memorial Justice Assistance Grant Program $188,377
16.922 Equitable Sharing Program $181,381
97.007 Homeland Security Preparedness Technical Assistance Program $180,960
93.052 National Family Caregiver Support, Title Iii, Part E $173,023
97.042 Emergency Management Performance Grants $170,543
93.045 Special Programs for the Aging, Title Iii, Part C, Nutrition Services $159,825
16.588 Violence Against Women Formula Grants $153,305
93.053 Nutrition Services Incentive Program $142,374
16.017 Sexual Assault Services Formula Program $137,029
14.239 Home Investment Partnerships Program $133,065
14.267 Continuum of Care Program $125,436
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $99,997
93.568 Low-Income Home Energy Assistance $98,035
16.812 Second Chance Act Reentry Initiative $97,823
20.325 Consolidated Rail Infrastructure and Safety Improvements $92,993
97.044 Assistance to Firefighters Grant $74,798
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program $68,074
16.606 State Criminal Alien Assistance Program $58,870
95.001 High Intensity Drug Trafficking Areas Program $37,612
20.205 Highway Planning and Construction $36,017
97.067 Homeland Security Grant Program $33,683
15.245 Plant Conservation and Restoration Management $30,161
10.767 Intermediary Relending Program $27,525
16.050 Missing and Unidentified Human Remains (muhr) Program $23,263
16.320 Services for Trafficking Victims $20,703
14.256 Neighborhood Stabilization Program (recovery Act Funded) $19,403
66.818 Brownfields Multipurpose, Assessment, Revolving Loan Fund, and Cleanup Cooperative Agreements $16,848
16.741 Dna Backlog Reduction Program $16,504
93.136 Injury Prevention and Control Research and State and Community Based Programs $8,863
20.106 Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and Covid-19 Airports Programs $6,022