Finding Text
Criteria or Specific Requirement: 2 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)
mandates 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 our audit procedures performed over the current year SEFA, it was noted
that Solvista Health improperly excluded expenditures for two federal awards from its June 30, 2023
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, along with an incomplete and inaccurate
SEFA, could lead to incorrect reporting of federal funds, misstatement of financial information, and
noncompliance with federal requirements. This represents a potential risk for improper use of federal
funds and an inability to meet compliance and reporting obligations. Additionally, the omission of federal
awards from the June 30, 2023 SEFA resulted in noncompliance with federal reporting requirements and
inaccurate representation of Solvista Health’s federal award activity.
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.