Finding Text
Criteria or Specific Requirement: Title 2 of the Code of Federal Regulations (CFR) 200.302(b)(4)
requires non-federal entities to maintain effective internal control over federal programs. Specifically, the
organization must reconcile its federal awards with expenditures incurred and revenue received.
Additionally, 2 CFR Part 200.510(b)(1-6) specifies that a Schedule of Expenditures of Federal Awards
(SEFA) be prepared for each fiscal year in accordance with the applicable federal regulations. The SEFA
must include, at a minimum, total federal awards expended for each individual federal program and must
accurately report all federal expenditures received and expended during the fiscal year.
Condition and Context: During the audit, it was noted that Solvista Health does not reconcile federal
awards with the expenditures used and revenue earned. Additionally, Solvista Health did not prepare an
accurate SEFA.
Questioned Costs: N/A
Cause: Solvista Health’s accounting and internal control systems were not designed and implemented to
ensure reconciliation of federal awards with expenditures and revenue, and the preparation of an accurate
SEFA.
Effect: Failure to reconcile federal awards with expenditures and related revenue, along with the absence
of an accurate SEFA, could lead to incorrect reporting of federal funds, misstatement of financial
information, and non-compliance with federal requirements. This represents a potential risk for improper
use of federal funds and an inability to meet compliance and reporting obligations.
Identification as a Repeat Finding: Not a repeat finding.
Recommendation: We recommend Solvista Health design and implement internal control procedures to
reconcile federal awards with the expenditures and revenue received to ensure completeness and accuracy
in financial reporting. Additionally, management should prepare and maintain an accurate SEFA in
accordance with 2 CFR 200.510 to ensure proper documentation and compliance with federal reporting
requirements. Additionally, we recommend that Solvista Health train appropriate personnel on the
requirements related to federal award reconciliations and SEFA preparation to mitigate the risk of
noncompliance in the future.