Finding 1228583 (2025-002)

2025-002 Improve Controls Over Preparation and Review of the Schedule of Expenditures of Federal Awards (SEFA) Federal Program Information All federal programs Type of Finding Compliance – Other Matters Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Internal control standards under the Uniform Guidance require that management establish controls to ensure that financial information is complete, accurate, and reviewed prior to issuance. This includes confirming assistance listing numbers and completeness and accuracy of expenditures amounts through a documented review of the SEFA. Condition and Context The Town did not have a documented control in place over the preparation and review of the SEFA prior to providing it to the auditors. Cause The Town has not established a formal internal control over the independent review of the SEFA by knowledgeable personnel including verification of completeness and accuracy of federal program information as a result of limited staffing and reliance on the audit process to identify errors. Effect or Potential Effect The absence of an effective control over SEFA preparation and review could increase the risk that the SEFA is materially misstated or result in inaccurate reporting to federal and pass-through agencies. Questioned Costs No questioned costs are reported as this requirement is administrative in nature. Identification as a Repeat Finding This is not a repeat of a prior finding. Recommendation The Town should implement a formal control over SEFA preparation and review. Views of Responsible Official and Planned Corrective Action Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.