Finding 1162429 (2024-002)

Finding 2024-002: Compliance Finding and Significant Deficiency in Internal Control over Compliance - Schedule of Expenditures of Federal Awards (SEFA) Preparation. Agency: Department of Health and Human Services, National Aeronautics and Space Administration, and Department of Energy. ALN: 93.070, 43.003, 43.008, and 81.108 Condition and Context: During the audit, we noted that due to the inadequacies in the financial and year-end closing process, the Schedule of Expenditures of Federal Awards (SEFA) was inaccurately prepared. Criteria: Management is responsible for the proper preparation and reconciliation of the SEFA. Cause: Lack of communication between the in-house accountant and the outsourced accountants and the transition to new accounting software. Effect: This led to inaccurate tracking of the various federal grants, several adjusting entries, and reconciliations which led to considerable delay in completing the audit. Questioned Costs: $-0-. Repeated Finding: No. Recommendation: We recommend, as part of the audit preparation process and the preparation of the SEFA, that the outsourced and internal accounting staff communicate and coordinate efforts relating to preparing for audit. We also recommend that the SEFA is reconciled to both the expense and income general ledger and reviewed by management prior to the start of the audit. Management Response: We agree with the finding and have established new written policies and procedures to ensure the SEFA is properly reconciled and reviewed prior to the start of the audit.