Finding Text
Federal Expenditures Not Reported in the Schedule of Federal Expenditures of Federal Awards and State Financial Assistance (“SEFA”) Federal Program: Coronavirus State and Local Fiscal Recovery Funds CFDA / Assistance Listing Number: 21.027 Federal Agency: U. S. Department of Treasury Pass-Through Entity: Tennessee Department of Environment and Conservation Fiscal Year Ended June 30, 2024 Criteria Per 2 CFR §200.510(b) and 2 CFR §200.502, entities expending federal awards must accurately identify all federal awards expended during the period and prepare a complete and accurate SEFA that is consistent with amounts recorded in the financial statements. Condition and Context During a subsequent audit, it was identified that federal expenditures totaling $867,515 were not recorded as federal grant revenue or accounts receivable in the financial statements and were also omitted from the SEFA. The amounts were material to total federal expenditures reported under the Uniform Guidance. Cause The omission occurred due to oversight in year-end closing and grant reconciliation procedures, which did not capture the unrecorded federal expenditures at fiscal year-end. Effect The SEFA originally issued was incomplete and understated total federal expenditures by $867,515. As a result, the fiscal year 2024 financial statements were reissued to include the omitted federal expenditures and to present an accurate SEFA in accordance with the Uniform Guidance. Questioned Costs None. Recommendation Management should strengthen year-end grant reconciliation and review procedures to ensure that all federal expenditures are properly recorded and included in the SEFA prior to issuance. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.