Finding Text
Federal Program Information: Student Financial Assistance Cluster (ALN: Various), Child and Adult Care Food Program (ALN: 10.558), and Substance Abuse and Mental Health Services Projects (ALN: 93.342) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting - Per Uniform Guidance, §200.510(b), the auditees receiving federal funding are required to prepare a schedule of expenditures of Federal awards (the “Schedule”) for the period covered by the auditee's financial statements. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the Schedule easier to use. At a minimum, the Schedule should list individual Federal programs by Federal agency and provide total Federal awards expended for each Federal program during the entity’s fiscal year. Condition: During our audit procedures, we noted that the College did not prepare the Schedule for the year ended May 31, 2025. Cause: Insufficient internal controls and administrative oversight with respect to the timely preparation and review of the Schedule. Effect or Potential Effect: Lack of appropriate and timely preparation and review of the Schedule by management increases the risk that the amounts, contract or grant names, ALN information, and classification of the awards are presented incorrectly and that federal awards are not managed in accordance with Uniform Guidance. Questioned Costs: None. Context: The College did not prepare a Schedule for the year ended May 31, 2025. Additionally, management was unaware of certain federal awards received during the year. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the College implement additional internal controls and enhance their current policies and procedures to effectively maintain a detailed Schedule that contains the correct amounts, contract or grants names, ALN information and classification of the awards, which can be more readily reconciled to the underlying general ledger detail prior to receipt by the auditors. We also recommend that frequent cross departmental communication is established to ensure that all federal expenditures incurred and federal awards received during the year are appropriately reflected within the Schedule as required. The implementation of these internal controls will ensure that the Schedule is accurate/complete and also ensure that federal awards are managed appropriately in accordance with Uniform Guidance. Views of Responsible Officials: Management acknowledges the deficiency in the preparation and oversight of the Schedule of Expenditures of Federal Awards (SEFA) for the year ended May 31, 2025. To address this finding, the College will: • Implement a formal SEFA preparation policy aligned with 2 CFR §200.510(b) • Develop and maintain a centralized federal awards tracking log identifying: o Federal agency o Program name o Assistance Listing Number (ALN) o Award number o Pass-through entity (if applicable) o Expenditures by fiscal year • Establish quarterly reconciliations between the general ledger and the federal awards tracking log • Require structured cross-departmental communication between the Business Office, Financial Aid Office, Grants Administration, and program departments to ensure all federal awards received and expended are identified timely • Implement documented management review and approval of the SEFA prior to submission to auditors These corrective measures will strengthen internal controls over federal award tracking, improve the accuracy and completeness of the SEFA, and ensure compliance with Uniform Guidance requirements.