Finding Text
Finding 2023 – 006: Reporting - Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Repeat Finding: 2021-007 and 2022-006) Criteria: Uniform Guidance 2 CFR § 200.510 requires an auditee to "prepare a schedule of expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements [that]… at a minimum shall… list individual Federal programs by Federal agency... [and] provide total Federal awards expenditures for each individual Federal program and the Assistance Listing number or other identifying number when the ALN information is not available." In accordance with Uniform Guidance, the auditee is required to maintain a structure of internal controls to ensure compliance with applicable reporting requirements. Condition: During fiscal year 2023, the Organization did not have adequate controls in place to ensure the SEFA accurately reflected each award's federal agency and assistance listing number. There were differences between the SEFA and the grant agreements/compliance supplements, requiring adjustments to the SEFA. Questioned Costs: None. Cause: A lack of sufficient training or understanding of Uniform Guidance requirements, particularly related to SEFA reporting elements, contributed to this finding. Effect: The Organization was unable to produce an accurate and timely SEFA, requiring additional effort and resources from both the Organization and the auditor to correct reporting errors during the audit process. Failure to produce an accurate SEFA resulted in noncompliance with requirements of Uniform Guidance which could lead to sanctions by funding agencies and curtailment of future funding. Recommendation: We recommend the Organization enhance its understanding of SEFA reporting requirements under Uniform Guidance, develop and implement a structured review process to ensure compliance with those reporting requirements, reconcile federal expenditures reported on the SEFA to the amounts recorded in the general ledger, and review federal agency names and assistance listing numbers against grant documentation to ensure accuracy. Views of Responsible Officials: See the corrective action plan that accompanies the schedule of findings and questioned costs.