Finding 1220240 (2025-004)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2025
Accepted
2026-06-29

AI Summary

  • Core Issue: The Organization failed to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA), omitting about $347,000 in federal expenditures.
  • Impacted Requirements: This affects compliance with 2 CFR §200.510(b) and Government Auditing Standards, increasing the risk of misstated federal expenditures and inaccurate financial reporting.
  • Recommended Follow-Up: Strengthen internal controls by implementing a formal process for identifying federal awards, maintaining a centralized grant listing, tracking expenditures accurately, and providing training on SEFA requirements.

Finding Text

Finding No.: 2025-004 Federal Agency: Medicaid Cluster (93.778) Criteria Under 2 CFR §200.510(b), nonfederal entities that expend federal awards are required to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the entity’s financial statements. The SEFA must: • Include total federal expenditures for each federal program • Identify each federal program by Assistance Listing Number (ALN) • Include the name of the federal agency and pass-through entity, where applicable • Include pass-through identifying numbers • Disclose significant accounting policies used in preparing the SEFA • Reconcile, or be traceable, to the underlying accounting records Additionally, Government Auditing Standards require that internal controls over financial reporting and compliance be designed and implemented to ensure accurate reporting. Conditions Found The Organization did not prepare a complete and accurate SEFA for the year ended September 30, 2025. Certain federal expenditures were initially omitted from the SEFA. As a result, the SEFA required adjustment which resulted in a second major program for testing once the Organization corrected its SEFA. Cause The condition appears to be the result of inadequate internal controls over the identification, tracking, and reporting of federal awards. Specifically: • Lack of a formal process to identify all federal funding sources • Insufficient review controls over SEFA preparation • Limited understanding of SEFA reporting requirements under Uniform Guidance Effect The incomplete SEFA increases the risk that: • Federal expenditures may be understated or misstated • Major program determination could be impacted • Required disclosures under Uniform Guidance may not be met • Users of the financial statements may rely on inaccurate information Questioned Costs The Organization’s expenditures are similar amongst all programs and grants. At the onset of the audit, expenditures were not coded and reconciled to each grant individually; however, the Organization was able to identify, code and update the general ledger to properly identify the major program expenditures. We were able to determine there are no questioned costs. Context The SEFA omitted approximately $347,000 in federal expenditures in their SEFA provided during audit planning procedures, representing approximately 18% of total federal expenditures. Repeat Finding No Recommendation We recommend that the Organization strengthen internal controls over SEFA preparation and completeness by: • Implementing a comprehensive process to identify all federal awards, including pass-through funding • Maintaining a centralized listing of federal grants with ALNs and award information • Ensuring expenditures are tracked by federal program throughout the year • Performing a detailed review and reconciliation of the SEFA to the general ledger prior to issuance • Providing training to personnel responsible for SEFA preparation on Uniform Guidance requirements Views of Responsible Officials See attached corrective action plan.

Corrective Action Plan

Finding Reference Number: 2025-04 View of Responsible Official and Planned Corrective Action Date: Corrective Action: The Organization acknowledges the importance of preparing a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with Uniform Guidance requirements. Management will strengthen internal controls over the identification, tracking, reconciliation, review, and reporting of federal awards to ensure all federal expenditures are properly captured and rep01ted in future periods. 1. Develop and implement a fom1al year-end SEFA preparation checklist that identifies all required information, including federal agency, pass-through entity, Assistance Listing Number, program name, award amount, expenditures, and any amounts passed through to subrecipients 2. Review all revenue sources, grant agreements, reimbursement activity, and general ledger accounts at least quarterly lo identify any federal awards that must be included on the SEFA. 3. Perform a documented reconciliation of SEFA expenditures to the general ledger and supporting grant records before the SEFA is submitted for audit. 4. The SEFA will be prepared by the third party outside accountant and reviewed by the Finance Director to ensure that all federal awards are accurately reported. Name of Contact Person: Susan Phelps, Finance Director Projected Completion Date: September 30, 2026

Categories

Reporting

Other Findings in this Audit

  • 1220218 2025-002
    Material Weakness Repeat
  • 1220219 2025-005
    Material Weakness Repeat
  • 1220220 2025-002
    Material Weakness Repeat
  • 1220221 2025-005
    Material Weakness Repeat
  • 1220222 2025-002
    Material Weakness Repeat
  • 1220223 2025-005
    Material Weakness Repeat
  • 1220224 2025-002
    Material Weakness Repeat
  • 1220225 2025-005
    Material Weakness Repeat
  • 1220226 2025-002
    Material Weakness Repeat
  • 1220227 2025-005
    Material Weakness Repeat
  • 1220228 2025-002
    Material Weakness Repeat
  • 1220229 2025-005
    Material Weakness Repeat
  • 1220230 2025-002
    Material Weakness Repeat
  • 1220231 2025-005
    Material Weakness Repeat
  • 1220232 2025-001
    Material Weakness Repeat
  • 1220233 2025-003
    Material Weakness Repeat
  • 1220234 2025-004
    Material Weakness Repeat
  • 1220235 2025-001
    Material Weakness Repeat
  • 1220236 2025-003
    Material Weakness Repeat
  • 1220237 2025-004
    Material Weakness Repeat
  • 1220238 2025-001
    Material Weakness Repeat
  • 1220239 2025-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.044 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART B, GRANTS FOR SUPPORTIVE SERVICES AND SENIOR CENTERS $200,761
93.053 NUTRITION SERVICES INCENTIVE PROGRAM $100,171
93.778 GRANTS TO STATES FOR MEDICAID $80,400
93.071 MEDICARE ENROLLMENT ASSISTANCE PROGRAM $64,255
93.052 NATIONAL FAMILY CAREGIVER SUPPORT, TITLE III, PART E $56,643
10.561 STATE ADMINISTRATIVE MATCHING GRANTS FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $51,844
93.779 CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS) RESEARCH, DEMONSTRATIONS AND EVALUATIONS $35,539
93.324 STATE HEALTH INSURANCE ASSISTANCE PROGRAM $30,599
93.045 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART C, NUTRITION SERVICES $18,904
93.568 LOW-INCOME HOME ENERGY ASSISTANCE $7,445
93.041 SPECIAL PROGRAMS FOR THE AGING, TITLE VII, CHAPTER 3, PROGRAMS FOR PREVENTION OF ELDER ABUSE, NEGLECT, AND EXPLOITATION $4,188
10.182 PANDEMIC RELIEF ACTIVITIES: LOCAL FOOD PURCHASE AGREEMENTS WITH STATES, TRIBES, AND LOCAL GOVERNMENTS $2,000
93.043 SPECIAL PROGRAMS FOR THE AGING, TITLE III, PART D, DISEASE PREVENTION AND HEALTH PROMOTION SERVICES $1,529