Finding Text
Federal Award Number and Award Year AL No. 93.958, 93.959 and 93.558, QG002 20, award year 7/1/2022 – 6/30/2024 AL No. 93.958, 93.959 and 93.558, ME015, award year 7/1/2022 – 6/30/2024 Criteria According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR section 200.303 requires that non federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition and Context The Organization did not have adequate internal controls related to reporting of expenditures on the SEFA for Temporary Assistance for Needy Families, Block Grants for Community Mental Health Services, and Block Grants for Prevention and Treatment of Substance Abuse. Specifically, the Organization’s controls to reconcile expenditures from their internal tracking spreadsheets to the appropriate assistance listing numbers within the underlying grant/contract documentation, including the original contract and “Post Award Notices” (PAN) spreadsheets, were not operating as designed. As a result, the Organization determined that $2,601,106 of Temporary Assistance for Needy Families expenditures were incorrectly reported under the Block Grants for Community Mental Health Services and Block Grants for Prevention and Treatment of Substance Abuse programs. Possible Cause and Effect In discussing the condition with the Organization’s management, they stated it was caused by the use of an outdated PAN spreadsheet, which led to expenditures being incorrectly reported on the SEFA under the wrong ALN. Additionally, management review controls over the completeness and accuracy of the SEFA were not designed to detect the error. Failure to establish effective internal controls regarding financial reporting for the preparation of the SEFA may prevent the Organization from completing an audit in accordance with the timelines of Uniform Guidance. Questioned Costs None. Statistically Valid Sample Not applicable Repeat of Prior Finding No Recommendations Management should enhance its system of internal control to ensure that the SEFA is complete and accurate. View of Responsible Official Management agrees with the noted finding.