Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 21.027 - U.S. Department of the Treasury - COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Award Identification Number and Year - N/A Pass through Entity - Cook County Health Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.510(b) requires the auditee to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the financial statements that includes total federal awards expended. The SEFA must be complete and accurately reflect all federal expenditures. Condition - The Organization’s SEFA for the year ended June 30, 2024 was not complete. Specifically, certain federal expenditures were omitted from the SEFA. Questioned Costs - None If Questioned Costs are Not Determinable, Description of Why Known Questioned Costs Were Undetermined or Otherwise Could Not be Reported - No questioned costs were identified, as the issue relates to the completeness of SEFA reporting rather than the allowability, allocability, or reasonableness of the underlying expenditures. Identification of How Questioned Costs Were Computed - N/A Context - During our procedures, we noted that $668,038 of expenditures related to the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program was not included on the fiscal year 2024 SEFA, even though these expenditures were incurred in fiscal year 2024 and should have been reported. Management identified this omission during the preparation of the fiscal year 2025 SEFA. While additional procedures were performed to assess completeness, no other omitted federal expenditures were identified. Cause and Effect - Although the Organization has a formal SEFA preparation and review process, the control did not operate effectively to identify all sources of federal funding. Specifically, CSLFRF funding was not identified by management as federal assistance and, therefore, was not included in the population subject to SEFA reporting and review in fiscal year 2024. The fiscal year 2024 SEFA was understated by $668,038. Although the omission did not impact the determination of major programs for fiscal year 2024, an incomplete SEFA increases the risk that federal expenditures are not fully identified and could result in inaccurate reporting and potential noncompliance with the Uniform Guidance requirements. The fiscal year 2025 SEFA properly excludes these expenditures. Recommendation - We recommend that management strengthen procedures over SEFA completeness by enhancing the process used to identify federal funding sources. This may include: • Implementing a centralized and regularly updated listing of all funding sources that clearly identifies federal awards, including pass through funding • Establishing procedures to evaluate new or amended agreements for federal characteristics at the time of award • Enhancing the SEFA review process (e.g., CFO review) to include a formal reconciliation of federal expenditures to the general ledger and grant listings, with specific consideration of funding sources that may not be clearly labeled as federal These enhancements will help ensure all federal expenditures are identified and accurately reflected in the SEFA. Views of Responsible Officials and Corrective Action Plan - Management agrees it is important to have a SEFA preparation process that allows the identification of all sources of federal funding. In addition to current procedures, management will confirm with grantors directly when grant award agreements are silent on whether awards are sourced from federal funding and document the confirmations from grantors.