Finding Text
Improve Controls over the Preparation of the Schedule of Expenditures of Federal of Awards Statement of Condition: During our audit, we noted that ESAC’s Schedule of Expenditures of Federal Awards (SEFA) was not completed properly. Criteria: Title 2 U.S. Code of Federal Regulations Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires that management prepare a SEFA and the auditor to perform procedures to determine whether the schedule is presented fairly, in all material respects, in relation to the financial statements as a whole. Cause: ESAC’s unexpected management and staff transitions put a strain on the new staff’s ability to complete their responsibilities. Effect: Management may not properly initiate, authorize, record, process, and report financial data reliably in accordance with the requirements of Uniform Guidance. Recommendation: We recommend that ESAC develop and document a formal written policy to ensure that adequate procedures and controls are in place to determine that the SEFA is complete and accurate. These controls should include requiring the reconciliation of federal expenditures to the appropriate supporting documentation. Management Response: Management is in agreement with the recommendation and has updated their policy subsequent to year-end.