Finding Text
Finding 2024-003: Schedule of Expenditures of Federal Awards Presentation Program Title: Professional and Cultural Exchange Programs Assistance Listing Number: 19.402 Federal Agency: U.S. Department of State Pass-Through Entity Name, Pass-Through Identifying Numbers: Global Ties, CPG-ECA24-019 Global Ties, DBH-ECA24-14 Global Ties, IVRC-ECA23-04 Global Ties, CPG-ECA23-072-II Global Ties, N/A Federal Award Year: Year ended September 30, 2024 Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Number: DE-NA004179 Federal Award Years: Years ended September 30, 2020, 2019 and 2018 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), PFI is required to include only direct and pass-through Federal awards expended during the fiscal year in the SEFA. Condition: During our audit fieldwork, we noted that the SEFA omitted Federal expenditures of $38,047 that were passed through to PFI by a subrecipient under ALN 19.402. In addition, we noted that the SEFA omitted Federal expenditures of $74,111 under ALN 81.113 that occurred during prior years but were newly identified and reimbursed during the year under audit. Cause: The omission related to the reporting of the pass-through award appears to be due to a misunderstanding regarding the source of the funding. The omission related to the reporting of expenditures from a prior year appears to be due to a deficiency in controls over reconciling cash draws to activity in the general ledger. Effect or Potential Effect: The SEFA was understated. When the SEFA is not prepared properly, it could have an effect on the auditor's determination of major programs or the auditor's sample selections. Questioned Costs: None. Repeat Finding: Not applicable. Recommendation: We recommend that PFI ensure that their staff and outsourced accountants are properly trained to identify all funding sources that should be presented on the SEFA, particularly in connection with passthrough funding from other organizations, in accordance with 2 CFR §200. Furthermore, PFI should reconcile Federal grant expenditures per the general ledger to cumulative Federal financial reporting and cash draws to ensure consistency and completeness of their accounting records prior to preparing the SEFA.