Finding Text
SD2025-005 – INACCURATE REPORTING OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE FINANCIAL ASSISTANCE FINDING ASSIGNED TO: Federal Award: ALN #14.218 – Community Development Block Grant/Entitlement Grants Federal Agency: U.S. Department of Housing and Urban Development Federal Award: ALN #14.239 – Home Investment Partnerships Program Federal Agency: U.S. Department of Housing and Urban Development Federal Award: ALN #14.231 – Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Federal Award: ALN #16.922 – Equitable Sharing Program Federal Agency: U.S. Department of Justice Federal Award: ALN #95.001 – High Intensity Drug Trafficking Areas Program Federal Agency: Executive Office of the President Pass-through: Bureau of Alcohol Tobacco Firearms and Explosives/Federal Bureau of Investigation State Award: CSFA #55.039 – Local Transportation Projects State Agency: Florida Department of Transportation 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 the recipient of grant awards must be able to prepare an accurate schedule of expenditures and be able to identify in its accounts all federal awards and state assistance received and expended. Condition The original Schedule of Expenditures of Federal Awards and State Financial Assistance (“SEFA”) that the City provided erroneously omitted expenditures related to ALN#14.218 (Community Development Block Grant “CDBG”) in the amount of $2,030,601. Accordingly, these adjustments required the auditor to modify its testing procedures in accordance with the Uniform Guidance. Additionally, the original SEFA provided by the City’s staff inaccurately reported expenditures for four (4) additional federal programs as follows: $164,000 for ALN#14.239, $91,376 for ALN#14.231, $52,701 for ALN#16.922, and $53,656 for ALN#95.001. The City subsequently submitted an updated SEFA to the auditors to reflect the necessary corrections. However, this revised SEFA omitted $400,000 of expenditures of state financial assistance related to the Florida Department of Transportation project CSFA#55.039. The City ultimately provided a corrected SEFA and supporting journal entries to record all missing expenditures. Cause Lack of sufficient review controls over the preparation and review of the SEFA. Effect The SEFA was not accurately prepared and could result in incorrect reporting of expenditures to federal and state agencies. Recommendation We recommend that the staff responsible for the preparation of the SEFA and monitoring of Federal and State Awards receive additional training to possess a thorough understanding of grants and their related program requirements. Additionally, the SEFA should be reviewed and approved by management personnel identified by the City who possesses the adequate knowledge and expertise. Such review and approval should take place during the City’s financial close process. Views of Responsible Officials See accompanying Corrective Action Plan.