Finding Text
Condition: During the audit of the Organization’s compliance with the Reporting compliance requirement for the year ended December 31, 2025, we identified errors between expenditures reported by the Organization and actual expenditures incurred under the program. Specifically, the Organization overreported ERA2 expenditures by $42,200 for the year ended December 31, 2025. The amounts reported to Cuyahoga County did not agree with the Organization’s underlying accounting records and supporting documentation. However, the reporting errors did not result in repayments of funds received. We consider this item to be a significant deficiency in internal control over compliance with the major program. Criteria: Title 2 CFR §200.302(b) requires recipients of federal awards to maintain records that accurately identify the source and application of federal funds and to ensure that financial reports submitted to federal awarding agencies are accurate, current, and complete. In addition, ERA2 reporting guidance issued by the U.S. Department of the Treasury requires that reported expenditures reflect actual, allowable costs incurred during the reporting period. Cause: The overreported expenditures resulted from appropriately designed reconciliation controls over the preparation and review of ERA2 reporting that were not implemented. Specifically, the operations team responsible for reporting ERA2 expenditures to Cuyahoga County on a monthly basis did not obtain reconciling information from the Organization’s finance department prior to submitting reporting of ERA2 expenditures, resulting in duplications and errors in reported amounts. Effect: As a result of this deficiency, ERA2 expenditures reported for the year ended December 31, 2025 were overstated by $42,200. Inaccurate reporting impairs the reliability of program data used by the federal awarding agency to monitor program performance and compliance. Context: Testing of the Organization’s annual reporting of the ERA2 program expenditures to Cuyahoga County, Ohio. We noted as part of our review of the annual reporting did not reconcile to the underlying accounting records or amounts reported on the SEFA by $42,200. Questioned Costs: None Recommendation: We recommend that the Organization strengthen internal controls over ERA2 reporting by: Ensuring reporting ERA2 expenditures are reconciled to the general ledger prior to submission; Implementing independent supervisory review of all ERA2 reports; Ensuring that reported expenditures reflect only allowable costs actually incurred during the reporting period. Views of Responsible Official: Management concurs with the finding. The reporting differences resulted from inadequate reconciliation between the programmatic report and the Organization's accounting records prior to submission. Communication between operations and finance staff have been strengthened to improve accuracy, completeness, and consistency of future reporting in other programs. Additionally, this federal funding program has come to an end.