Finding Text
2024-002: Material Weakness in Internal Controls over the Schedule of Federal Awards and Grants Management Federal Assistance Listing Number(s): 21.027 Program Title: Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Federal Award Year: 2022-2023 Name of Federal Agency: U.S. Department of Treasury Name of pass-through entity: Direct, Colorado Department of Local Affairs, and various COVID-19 Program: Yes Criteria: 2 CFR 200 Section 303 in part states that the recipient of federal awards must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements. Condition: We continued to identify several material adjustments to the Federal awards that were expended during 2024 that were not accurately reported on the County’s Schedule of Expenditures of Federal Awards (SEFA). Cause: Based on our review of County’s schedule of expenditures of federal awards, grants revenue, and receivables, we identified that the County may need to implement a periodic process that will include grants reconciliation across the County (except for DHS) and a year-end closing process that will include a reconciliation of the SEFA to the County’s financial statements. Effect: Financial reporting over the SEFA caused delays in the completion of the audit and Single Audits. Repeat Finding: Yes. Recommendation: We recommend that the County create processes to identify, organize, and manage Federal awards and other grants and make sure that the grant requirements are properly maintained with effective internal controls over compliance and reporting. In addition, we recommend that the County prepares an accurate schedule of expenditures of federal awards and properly reconcile and record accruals related to grants at year-end to avoid future delays in the audit process. The current staff have made a significant effort during 2025 to improve monthly and yearly processes and address this issue. Corrective Action Plan: Reported on page 69.