Finding Text
The Company did not have adequate controls for reporting expenditures on the SEFA for the COVID-19: Coronavirus State and Local Fiscal Recovery Funds (SLFRF). Specifically, management stated that ineffective communication between the grants and accounting departments led to the creation of a general ledger account for SLFRF that was not properly coded as a federal award. Additionally, the Company lacked documented procedures for recording expenditures in the correct fiscal year. This resulted in management erroneously recording expenditures on the SEFA using the cash basis rather than the accrual basis of accounting. Due to these conditions, the Company identified two errors during fiscal year 2024: • $676,054 of fiscal year 2023 SLFRF expenditures were incorrectly included on the June 30, 2024 SEFA because the award had not been identified as federal in the general ledger. • $291,465 of fiscal year 2024 SLFRF expenditures were incorrectly excluded from the June 30, 2024 SEFA because the Company used the cash basis instead of the accrual basis of accounting. As a result, the June 30, 2024 SEFA was restated to reduce SLFRF expenditures by $384,589.