Finding Text
Condition: On the original SEFA provided for the audit, one grant was inaccurately omitted from the schedule, resulting in a restatement of the SEFA. The SEFA provided for the audit did not include a grant passed through the Hawaii Community Foundation, AL Number 66.203 totaling $79,194. Criteria: Per 2 CFR §200.510(b), the auditee must prepare a SEFA for the period covered by the auditee’s financial statements. The schedule must list individual Federal programs by Federal agency and Assistance Listing number, provide the total Federal awards expended, be accurate and complete, and include notes describing the significant accounting policies used in preparing the schedule. Cause: The Organization did not have adequate procedures in place to ensure that all Federal expenditures were identified and included in the SEFA, nor was a comprehensive reconciliation to the general ledger performed prior to submission for audit. Effect: The SEFA as prepared by management was incomplete. This increases the risk that users of the SEFA (including Federal agencies and pass-through entities) could be misled as to the level of Federal funding expended. It also impairs transparency and accountability in Federal award reporting and could result in questioned costs or findings by oversight agencies. Questioned Costs: None Recommendation: We recommend that the Organization implement procedures to ensure that the SEFA is prepared accurately and completely. These procedures should include reconciling the SEFA to the general ledger and grant revenue accounts, confirming completeness by reviewing all grant agreements and funding sources, and establishing a management review process to validate accuracy prior to submission for audit. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding; see corrective action plan.