Finding Text
2025-003 – Significant Deficiency and Noncompliance Program: High Intensity Drug Trafficking Areas (HIDTA) Program Assistance Listing (ALN): 95.001 Federal Agency: Executive Office of the President Federal Award Numbers: G22MI0001A, G23MI0001A, G24MI0001A, HID1225G0597 Criteria: The Uniform Guidance requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the financial statements that includes complete and accurate reporting of total federal expenditures for each program. Condition: The City’s original SEFA draft excluded $66,963 of payroll expenditures related to ALN 95.001, resulting in incomplete reporting of federal expenditures. Cause: The omission occurred due to oversight by personnel responsible for SEFA preparation. Effect or potential effect: The exclusion resulted in an understatement of federal expenditures of $66,963 and had the potential to impact major program determination. Questioned costs: None. Context: The issue relates to SEFA completeness. The error appears to be an isolated oversight and was discussed with the Grants Coordinator. Identification as a repeat finding, if applicable: Not applicable. Recommendation: We recommend the City to implement a formal reconciliation between the general ledger and SEFA, require secondary review for completeness, and utilize a full population listing of grant expenditures. Views of Responsible Officials: Management acknowledges the audit finding and recommendation. There was staff turnover during fiscal 2025 and the transactions missing from the SEFA occurred during the transition. In fiscal year 2026, the City hired a second grants coordinator to have adequate staff over the management and administration of grants. Management is committed to maintaining complete and accurate reporting of total federal expenditures for each grant program; and implementing a formal reconciliation of expenditures between the general ledger and SEFA.