Finding 1205009 (2024-004)

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS – significant dificiency. 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. Reconciliation of the respective income statements for each Federal award is required for SEFA disclosure, with unreconciled differences. The income statements should include full GAAP accounting including prepaid expenses, accrued expenses, unbilled receivables, additional indirect costs, program income, and other differences. The surplus and deficit should be nearly zero for each cost reimbursement contract. It is a best practice to utilize a grand bridging report monthly (based on the contract income statements) to understand any differences between contract revenues and expenses (for cost reimbursement contracts) as well as progress against grant budgets. Expenditures of federal awards should agree to each contract income statement.