Finding Text
2025-005—Significant Deficiency and Noncompliance, Completeness and Accuracy of Schedule of Expenditures of Federal and State Awards (Repeat Finding 2024-004. Severity downgraded from material weakness to significant deficiency due to corrective actions implemented) U.S. Department of Agriculture Passed through State of Connecticut Department of Education Assistance Listing Number: 10.185 Program Name: Local Foods for Schools Incentive Program Assistance Listing Number: 10.579 Program Name: Child Nutrition Discretionary Grants Department of Homeland Security Passed through the State of Connecticut Emergency Management and Homeland Security Assistance Listing Number: 97.042 Program Name: Emergency Management Performance Grant U.S. Department of Health and Human Services Passed through the State Department of Public Health Assistance Listing Number: 93.323 Program Name: COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases U.S. Department of Transportation Assistance Listing Number: 20.939 Program Name: Safe Streets and Roads for All Passed through the State Department of Transportation Assistance Listing Number: 20.205 Program Name: Highway Planning and Construction U.S. Department of Treasury Passed through the State of Connecticut Department of Education and the State Office of Early Childhood Assistance Listing Number: 21.027 Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery FundsCriteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state financial assistance (SESFA) includes the accuracy and completeness of the schedules. The SEFA and SESFA balance should be reconciled to the basic financial statements which are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The Uniform Guidance 2 CFR 200.510 (b) requires the auditee (the Town) to prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements. The schedule must include the total federal and awards expended as determined in accordance with 2 CFR 200.502 and the Office of Policy and Management’s Compliance Supplement. Condition: We identified several required adjustments and corrections to the SEFA and SESFA as listed below: • Six federal programs were missing or had an incorrect assistance listing number. • One program improperly included on the SESFA that was moved to the SEFA. • One program improperly included under the incorrect oversight agency. • One program improperly reported as a direct grant. • One state program requiring adjustment to decrease the reported expenditures by $250,481. • Three programs improperly included as exempt programs. • One program had an incorrect state grant ID. Cause: Grant management and reporting is not centralized within the Town and are left to the individual departments. Grant agreements and the underlying information required to prepare the SEFA and SESFA are not maintained centrally. Effect or potential effect: This can result in an inaccurate amount reported in the SEFA, SESFA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting. Additionally, an inaccurate SEFA/SESFA can result in incorrect identification of major programs leading to further delays and inefficiencies in the audit. Recommendation: We recommend that Town management, in coordination with the departments, establish policy and procedures to help make certain all federal and state expended funds are captured timely and appropriately in the correct fiscal year in the SEFA and SESFA. Questioned costs: None Context: See condition above. Repeat finding: This is a repeat of finding 2024-001. View of responsible official: We agree with the finding. See corrective action plan.