Finding 1168381 (2024-004)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2026-01-08
Audit: 380207
Organization: Casa (NC)

AI Summary

  • Core Issue: A significant federal award was left out of the Schedule of Expenditures of Federal Awards (SEFA), leading to inaccurate federal expenditure reporting.
  • Impacted Requirements: The omission violates 2 CFR §200.510(b), which mandates that all federal awards for the fiscal year be included in the SEFA for proper audit coverage.
  • Recommended Follow-Up: Strengthen internal controls for SEFA preparation, including reconciliation of records and formal reviews by finance leadership before submission.

Finding Text

Finding 2024-004: U.S. Department of Housing and Urban Development, Community Project Funding Statement of Condition: During the audit of the Schedule of Expenditures of Federal Awards (SEFA), it was noted that management omitted a material federal award from the SEFA. This omission resulted in an inaccurate representation of total federal expenditures and led to the identification and testing of an additional major program that was not initially included in the audit plan. Criteria: Under 2 CFR §200.510(b), the Organization must prepare a SEFA that includes all federal awards expended during the fiscal year. The SEFA is used to determine major programs and assess audit coverage under the Uniform Guidance. Cause: The omission was due to staff turnover in the real estate development department and inadequate internal controls over the compilation and review of the SEFA. Management did not have a formal process to ensure completeness and accuracy of federal award reporting. Effect: The SEFA was materially misstated, which impacted the auditor's major program determination. As a result, an additional major program was required to be tested. Context: The omitted federal award was active during the fiscal year and had significant expenditures that met the threshold for major program consideration. The award was managed by a separate department within the organization, and its exclusion from the SEFA was not identified during internal review processes. The error was discovered during audit fieldwork when reconciling grant activity to the general ledger and federal drawdowns. This indicates a breakdown in communication and oversight between departments responsible for federal award management and financial reporting. Questioned costs: $0 Recommendation: Management should implement stronger internal controls over the preparation and review of the SEFA. This should include reconciliation procedures between grant records, accounting records, and the SEFA, as well as a formal review by finance leadership prior to submission. Management's Response and Corrective Action Plan: Management agrees with the finding and will ensure that the SEFA is accurate going forward via enhanced review of the organizations funding.

Corrective Action Plan

CASA 624 W Jones St. Raleigh, North Carolina 27603 CORRECTIVE ACTION PLAN December 9, 2025 Single Audit Clearinghouse 1201 East 10th Street Jeffersonville, Indiana 47132 CASA (the "Organization"), respectfully submits the following Corrective Action Plan for the year ended June 30, 2024. Bernard Robinson & Company, L.L.P. 1501 Highwoods Blvd., Suite 300 Greensboro, North Carolina 27410 Audit period: Year ended June 30, 2024 The findings from the June 30, 2024 Schedule of Findings and Questioned Costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. Findings and Questioned Costs: Section II - Findings relating to the financial statements which are required to be reported in accordance with generally accepted Government Auditing Standards and Section III - Findings and questioned costs relating to the major programs which are required to be reported as defined by the Uniform Guidance [2 CFR 200.516(a)]: Finding 2024-004: U.S. Department of Housing and Urban Development, Community Project Funding Recommendation: Management should implement stronger internal controls over the preparation and review of the SEFA. This should include reconciliation procedures between grant records, accounting records, and the SEFA, as well as a formal review by finance leadership prior to submission. Management's Response and Corrective Action Plan: Management agrees with the finding and will ensure that the SEFA is accurate going forward via enhanced review of the organizations funding. If you have questions regarding this plan, please call Everett McElveen at 919-754-9960. Sincerely yours, Everett McElveen CASA

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1168378 2024-001
    Material Weakness Repeat
  • 1168379 2024-002
    Material Weakness Repeat
  • 1168380 2024-003
    Material Weakness Repeat
  • 1168382 2024-001
    Material Weakness Repeat
  • 1168383 2024-002
    Material Weakness Repeat
  • 1168384 2024-001
    Material Weakness Repeat
  • 1168385 2024-002
    Material Weakness Repeat
  • 1168386 2024-001
    Material Weakness Repeat
  • 1168387 2024-002
    Material Weakness Repeat
  • 1168388 2024-001
    Material Weakness Repeat
  • 1168389 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.235 SUPPORTIVE HOUSING PROGRAM $1.88M
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $1.57M
14.251 ECONOMIC DEVELOPMENT INITIATIVE, COMMUNITY PROJECT FUNDING, AND MISCELLANEOUS GRANTS $1.38M
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $464,805
14.267 CONTINUUM OF CARE PROGRAM $189,145