2025-001 — Failure to Identify All Federal Awards and Prepare a Complete Schedule of Expenditures of Federal Awards Type of Finding: Material weakness in internal control over compliance related to the identification and reporting of federal awards and preparation of the Schedule of Expenditures of Federal Awards (SEFA) Federal Program and Specific Federal Award Information This finding relates to the Organization’s process for identifying and reporting federal awards received and expended during the year ended June 30, 2025. Criteria Under 2 CFR 200.302(b)(1), a nonfederal entity is required to identify in its accounts all federal awards received and expended, as well as the federal programs under which the awards were received. Federal award identification must include, as applicable, the Assistance Listing title and number, federal award identification number, year the federal award was issued, and the name of the federal agency or pass-through entity. Under 2 CFR 200.510, the auditee is required to prepare a SEFA for the period covered by the auditee’s financial statements. The SEFA must include total federal awards expended for each individual federal program, and federal programs must be listed by federal agency. For awards received as a subrecipient, the SEFA must include the name of the pass-through entity and the identifying number assigned by the pass-through entity. The SEFA must also include applicable Assistance Listing numbers or other identifying numbers, cluster totals, loan or loan guarantee amounts when applicable, and amounts provided to subrecipients when applicable. Condition During the audit of the Organization for the fiscal year ended June 30, 2025, the Organization did not identify all federal awards received and expended and did not prepare a complete Schedule of Expenditures of Federal Awards prior to the start of the audit. Additional federal awards and/or federal expenditures were identified through procedures performed during the audit. The Organization subsequently prepared or revised the SEFA with audit assistance and/or based on information identified during the audit. The awards or expenditures not initially identified are included in the table shown on the previous page and total $1,018,672. Total federal expenditures for the fiscal year ended June 30, 2025 were ultimately determined to be $1,716,735. The audit engagement was revised as a result of the Organization meeting the threshold for a Single Audit. Cause The Organization did not have adequate internal controls, policies, and procedures in place to ensure that all federal awards were identified, tracked, and reported in accordance with Uniform Guidance requirements. Specifically: • The Organization did not maintain a centralized grant listing or grant award register identifying all federal awards, including awards received directly from federal agencies and awards received as a subrecipient from pass-through entities. • Personnel in the finance department are relatively new to the Organization and federal award identification related to funds passed through by non-federal entities was not an area for which new personnel have received training. • Similarly, personnel have not received training in the preparation of the SEFA. Effect Because the Organization did not identify all federal awards and did not prepare a complete SEFA prior to the audit, there was a reasonable possibility that material misstatements of the SEFA and related disclosures would not be prevented, or detected and corrected, on a timely basis. The SEFA is the primary basis for determining whether a Single Audit is required and for identifying major programs subject to audit; therefore, incomplete identification of federal awards could result in an incorrect major program determination, incomplete audit coverage, untimely or inaccurate federal reporting. Questioned Costs The amount of questioned costs, if any, could not be determined because the finding relates to the Organization’s internal control process for identifying and reporting federal awards and preparing the SEFA, rather than to specific costs tested for allowability. No specific questioned costs were identified as a result of this finding. Recommendation We recommend that the Organization strengthen internal controls over the identification, accounting, and reporting of federal awards and the preparation of the SEFA. At a minimum, management should: 1) Capture required federal award information for each award, including Assistance Listing title and number, federal award identification number, award year, federal agency, pass-through entity, pass-through identifying number, award period, award amount, and applicable compliance requirements. 2) Configure the accounting system or supporting schedules to separately identify federal revenues and expenditures by program, award, funding source, and award year. 3) Develop written SEFA preparation procedures that identify responsible personnel, timing, required data sources, reconciliation steps, and review and approval requirements. 4) Provide training to accounting, finance, and program personnel responsible for grant management and federal award reporting. 5) Consult with federal awarding agencies or pass-through entities when award information is incomplete or unclear, including Assistance Listing numbers or pass-through identifying numbers. Views of Responsible Officials / Management Response Management agrees with the finding. The Organization acknowledges that it did not have adequate procedures in place during the fiscal year ended June 30, 2025 to identify all federal awards and prepare a complete SEFA prior to the audit. Management will implement corrective actions to strengthen controls over federal award identification, accounting, reconciliation, and SEFA preparation. (See separately issued corrective action plan.)