Finding Text
2025-002 - Inaccurate and Incomplete Schedule of Expenditures of Federal Awards (SEFA), United States Department of Health and Human Services, Native Hawaiian Health Care Systems 93.932 Criteria: Auditees are responsible for accurate recording and reporting on financial statements. Auditees are also responsible for major program compliance to Uniform Guidance Part 200 requirements, as well as proper reporting of SEFA report. To ensure accuracy and compliance of financials and major program compliance, management is responsible to design sufficient internal control over financials recording and reporting. Condition: During our testing of Federal Expenditure for the Uniform Guidance on internal controls over major program compliance, it was noted that client did not report accurate and complete Schedule of Expenditures of Federal Awards. Cause: As part of key personnel change and lack of documentation to support whether it is a federal expenditure and what amount should or should not be included in SEFA schedule, the SEFA was not accurately calculated. Potential Effect: Lack of supporting documentation and missing entries can lead to inaccurate SEFA preparation. Questioned Costs: None. Recommendation: We recommend the Organization obtain all Federal grant documentation to support the determination to include or to exclude federal expenditures from the SEFA. Repeat Finding: Yes. See Summary Schedule of Prior Audit Findings, Finding 2024-002. Views of Responsible Officials of the Auditee: The Accounting Department has taken better control and accountability in handling accounting and major program internal control processes and month-end journal entries that have allowed more insights and understanding of financial data. The Organization concurs with the finding and recommendation. See Management Responses and Corrective Action Plans.