Finding #2025-003 – Reporting – Significant Deficiency and Other Noncompliance. Applicable federal programs: All programs. Condition and context: The SEFA originally provided by the Montrose Center did not reconcile to the underlying accounting records. Additionally, some funding was incorrectly reported as state funding instead of federal. the Montrose Center failed to have procedures in place to identify and reflect all federal grants on the SEFA, have timely procedures to reconcile the federal expenditures to the federal program revenue or have timely review. Recommendation: Develop policies and procedures to identify and reflect all federal programs on the SEFA, reconcile the federal expenditures to the federal program revenue on a routine basis, and formalize the independent review process for the SEFA and grant billings. Planned corrective action: Management will develop written procedures to identify all federal awards, including federal funding received indirectly through state and other pass-through entities, by confirming the funding source tagging each award in the CYMA general ledger with a federal/state/local indicator. Federal expenditures will be reconciled to federal program revenue and grant billings on a routine basis, and the draft SEFA, supporting reconciliations, and grant billings will be subject to documented independent review by the Controller. Responsible officer: Michael McIntyre, Chief Administrative Officer. Estimated completion date: August 31, 2026.