Finding Text
Finding 2024-4 Assistance listing number: 21.027 Program name: Coronavirus State and Local Fiscal Recovery Funds Pass-through entity: State of Michigan EGLE Project numbers: A5817-01 Finding type: Material weakness and material noncompliance with laws and regulations Repeat finding: No Criteria: The City management is primarily responsible to, each year, identify all City federal revenues and prepare its Schedule of Expenditures of Federal Awards (SEFA). The auditor uses management’s SEFA to determine major programs and perform the single audit. Conditions: The City management has not prepared the SEFA and relies on the auditors to find the federal revenues and assist with the SEFA preparation. Context: The City has relied on the auditors to assist with the SEFA. The City reviews and understands the SEFA. The City usually has only a limited number of federal programs and amounts. Cause: The City has not developed a process for any internal effort to identify federal revenues and prepare the SEFA. Effect: The City lacks internal control over the preparation of the SEFA. Recommendation: We recommend that the City management establish procedures and a process to identify all federal revenues each year and prepare a SEFA that will be provided to the audit firm. View and Response of Responsible Officials: The City will establish the required procedures and process to prepare a correct SEFA that will be provided to the audit firm each year.