Finding Text
Federal Program: Coronavirus State and Local Fiscal Recovery Funds- Assistance Listing Number 21.027 Federal Agency: U.S. Department of Treasury Pass-through Entity: Illinois Department of Human Services Condition: The Organization does not track federal award expenditures separately in its general ledger. ARPA expenditures are commingled with other organizational expenses, making it difficult to directly reconcile federal activity to the SEFA or supporting records. Criteria: 2 CFR §200.302 requires non-federal entities to identify, in their accounts, all federal awards received and expended, and the federal programs under which they were received. The financial management system must provide for accurate, current, and complete disclosure of the financial results of each federal award. Entities must be able to identify federal awards separately by Assistance Listing number. Cause: The Organization has not implemented an accounting system or chart of accounts structure that captures federal awards separately by Assistance Listing number. Effect: Without separate identification of federal award expenditures, the Organization cannot readily demonstrate allowability of costs, reconcile SEFA expenditures to its accounting system, or ensure compliance with federal cost principles. This increases the risk of misstated SEFA reporting, unsupported expenditures, or disallowed costs. Questioned Costs: None specifically identified during audit testing; however, the lack of a tracking mechanism impairs the Organization’s ability to fully support ARPA expenditures. Auditor’s Recommendation: The Organization should establish accounting procedures to ensure federal award expenditures are tracked separately in the general ledger by Assistance Listing number and by grant. The Organization should reconcile grant expenditures recorded in the general ledger to reimbursement requests and the SEFA on a regular basis.