Finding Text
Finding 2022-002 Significant Deficiency in Internal Controls over Compliance - Ineffective Review of SEFA Resulting in Misclassification of Grant Criteria: Per 2 CFR §200.510(b), the SEFA must accurately identify federal awards, including correct Assistance Listing numbers and total expenditures. Effective internal controls should ensure that the SEFA is complete and accurate prior to submission. Condition: The Federation has a documented review process for the preparation of the SEFA. However during the 2022 audit a state-funded grant was incorrectly included as a federal award in the SEFA. This error was not detected during the Federation’s review process, indicating that the control was not operating effectively. Cause: Although a review process exists, it did not include sufficient procedures to verify the funding source of each program. Effect: Errors in SEFA reporting to oversight agencies could result in unnecessary effort or undue audits. Recommendation: We recommend that management enhance the SEFA review process to include verification of funding sources against grant agreements and supporting documentation, as well as inquiry with grant sources when grant agreements are unclear. Review procedures should be clearly documented and performed by personnel with sufficient knowledge of federal award requirements. Questioned Costs: Not applicable.