Finding Text
Finding 2025-002 – Material Weakness – Schedule of Expenditures of Federal Awards (SEFA) Federal Grantor: Corporation for National and Community Service Passed-through: Office of Planning Research California Volunteers Pass-through Grantor’s No.: 24ACIY31-C190 / 20AFHMN0010013-23 / 23AFEMN0010003-24 /22AFBMD0020011 / 22AFBMD0020018 / 22AFGMS001 / 22AFINV0010014 / 21AFEWI0010022 Compliance Requirement: Reporting Condition: During the course of the single audit, IYT provided three successive versions of the Schedule of Expenditures of Federal Awards (SEFA). The initial version included only the expenditures of grant funds received through California Volunteers and reflected an incorrect amount. The second version corrected the California Volunteers amount but omitted the other pass-through entities. The final version included expenditures from all passthrough entities. Earlier versions did not fully reconcile to the accounting system. Criteria: 2 CFR 200.508(b) and 2 CFR 200.510 require the auditee to prepare a complete and accurate SEFA that includes all federal awards received and expended, including correct pass-through entity information and expenditures. Effective internal controls must ensure the SEFA is accurate, supported by records, and prepared timely (OMB Compliance Supplement, Part 6). Effect: The submission of multiple inaccurate and incomplete versions of the SEFA during the audit delayed the engagement, increased the risk of misstatement, and could have affected major program determination and federal reporting. This constitutes a material weakness in internal control over compliance due to the significance of AmeriCorps funding. This finding relates to entity-wide reporting controls and did not have a direct and material effect on compliance with the requirements applicable to any individual major federal program. Cause: Inadequate processes existed for identifying, tracking, and reconciling federal award data from multiple passthrough entities, combined with insufficient management review and oversight. Recommendation: IYT needs to develop and implement a formal process for preparing the SEFA that includes identifying and tracking all federal awards, performing timely reconciliations to the accounting system and passthrough entity reports, conducting reviews and approvals, and providing training to staff on Uniform Guidance requirements. Views of Responsible Officials and Planned Corrective Actions: Management concurs with the finding. IYT implemented a formal, documented process for preparing the Schedule of Expenditures of Federal Awards (SEFA) that addresses completeness, accuracy, and reporting of pass-through information. IYT maintains a document that identifies all federal awards received and expended, including each pass-through entity, pass-through identifying number, and award period, so that every funding source is captured. Federal expenditures are reconciled to the general ledger and to each pass-through entity's reports on a scheduled basis throughout the year, and total SEFA expenditures are compared to federal revenue recognized in the financial statements. The SEFA is subject to a documented preparer-and-reviewer control, and IYT will not designate the SEFA as final until it is complete, fully reconciled to the accounting system and supporting records, and reviewed and approved by management. Finance staff received training on the SEFA preparation and reporting requirements of 2 CFR 200.508(b) and 200.510, including the identification and reporting of pass-through awards. A complete, fully reconciled, and reviewed SEFA is prepared prior to the start of the FY 2026 audit.