Finding Text
Criteria Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) require non-federal entities to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the entity’s financial statements. Under the Uniform Guidance, the non-federal entities are required to identify in their accounts all federal awards received and expended, as well as the federal programs under which they were received. Condition During our audit of federal award expenditures, we noted contract expense for a federal program was misclassified and not included a part of the federal awards program’s expenditures. Cause Upon inquiry with management, cost was erroneously assigned to a non-federal program in a journal entry prepared at the end of the month. Effect A major program reported in the Schedule of Expenditures of Federal Awards was understated by $23,200. Recommendation We recommend the Organization strengthen its review procedures in the allocation of expenditures to ensure all program expenses are properly allocated when recording accrual entries. Views of Responsible Officials Management concurs with the finding.