REFERENCE # 2022-003 OTHER - BASIS OF ACCOUNTING – SIGNIFICANT DEFICIENCY- NONCOMPLIANCE Program Name/ALN Emergency Food and Shelter National Board Program (ALN # 97.024) Criteria: Basis of Accounting —Uniform Guidance states the basis of accounting used may be a special purpose framework. However, it does state that the determination of when an award is expended must be based on when the activity related to the federal award occurs. Uniform Guidance also states for Grants, cost reimbursement contracts, cooperative agreements, and direct appropriation type of contracts, the federal expenditure or expense should be reported when the transaction occurs. Uniform Guidance further states, the auditee should also be able to reconcile amounts presented in the financial statements to related amounts in the schedule of expenditures of federal awards. Condition/Context: Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division report to the pass-through entity on an accrual basis. Division’s schedule of expenditures of federal awards is presented on the accrual basis of accounting. Of the Sixty (60) files selected for testing: • Five (5) prior year expenditures were included in Division’s current year schedule of expenditures of federal awards. Questioned Costs: Cannot be determined Recommendation: We recommend Division report program expenditures in the year expenditures were accrued. Corrective Action Plan: The Division will report program expenditures in the year expenditures were accrued. Step 1 Action Date: Ongoing Final Implementation Date:h 12/31/2023 Name and Phone # Of Person Responsible for Implementation: Jeanne Stromberg, Major, Divisional Finance Secretary (916) 563-3710