Finding Text
FINDING REFERENCE NUMBER 2024-004 (See FINDING REFERENCE NUMBER 2024-002) FEDERAL PROGRAM ALL FEDERAL PROGRAMS ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AWARD NUMBER ALL AWARDS COMPLIANCE REQUIREMENT REPORTING – SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TYPE OF FINDING MATERIAL WEAKNESS AND MATERIAL NONCOMPLIANCE CRITERIA 2 CFR §200.510 Financial Statements, (b) states that the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended. At a minimum, the schedule must: (1) list individual Federal Programs by Federal agency, (2) for Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included, (3) provide total Federal awards expended for each individual Federal program and the ALN number or other identifying number when the ALN information is not available, (4) Include the total amount provided to subrecipients from each Federal program, (5) for loan or loan guarantee programs identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. STATEMENT OF CONDITION During our audit procedures of the Schedule of Expenditures of Federal Awards (SEFA) prepared by the Bureau, we identified misstatements related to the programs reported in the schedule. One Federal program, ALN 21.027, Coronavirus State and Local Fiscal Recovery Fund, was not included in the SEFA, and material adjustments were made to properly present the Federal program expenditures for the fiscal year on the SEFA and financial statement. QUESTIONED COSTS None PERSPECTIVE INFORMATION The Bureau failed to identify properly in its records and/or accounting records of Federal grants funds that they received and expended during the fiscal year. This cause that when the Bureau prepared the SEFA and financial statement for audit purposes, the SEFA was incomplete and misstated. STATEMENT OF CAUSE The Bureau staff failed to identify the Federal grants expended during the fiscal year and to keep appropriate records of the transactions related to the Federal programs in order to properly identify the Federal programs and transactions when the SEFA is prepared causing the preparation of an incomplete and misstated SEFA initially submitted for audit purposes. POSSIBLE ASSERTED EFFECT The Bureau staff fail to include all Federal programs and total expenditures in the SEFA causing misstatements in the schedule, may lead to errors in the determination if a Uniform Guidance audit is required to the Bureau and could provoke an incorrect Major Program Determination by the auditors, resulting in the most likely exclusion of a Major Program for audit purpose. IDENTIFICATION OF REPEAT FINDING Not applicable. RECOMMENDATIONS We recommend the Bureau to maintain adequate records related to the Federal programs to properly identify the Federal programs/transactions when the SEFA is prepared. Once a Federal award is granted or received, the information must be shared with all personnel involved in the financial statement and SEFA preparation to provide assurance that all required program activities / expenditures are included on the SEFA. In addition, the Bureau must perform regular fiscal monitoring over the Federal programs transactions to provide reasonable assurance that all Federal programs/transactions are properly recorded and included in the SEFA.