Finding 1204949 (2025-002)

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS – significant deficiency. The books and records support the preparation of the Schedule of Expenditures of Federal Awards. A separate income statement is maintained for each cost reimbursement Federal award; however, contract expenditures require significant reconciliation in order to determine the expenditures required to be disclosed in the SEFA. None. Reconciliation of the respective income statements for each Federal award is required for SEFA disclosure. The income statements should include full GAAP accounting including prepaid expenses, accrued expenses, unbilled receivables, additional indirect costs, program income, and other differences. The reimbursable surplus should be nearly zero for each cost reimbursement contract. No differentiation between reimbursable and unreimbursable costs is made on each grant income statement. Once full GAAP accounting has been implemented during the year and there is a differentiation between reimbursable costs and unreimbursable costs on the individual grant reports, no significant reconciliation to the SEFA will be necessary. Expenditures of federal awards should agree to each contract income statement.