Finding Text
Internal Control over Preparation of the Schedule of Expenditures of Federal, State, and City Awards (SEFA), Assistance Listing Numbers (ALNs) - All Condition: Management’s SEFA did not include the ALNs for all of its federal awards with expenditures during the fiscal year. Criteria: “A non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of the Uniform Guidance Part 2 CFR section 200.50 (a). In order to accomplish this, “The auditee must also prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502” per Part 2 CFR section 200.510 (b) of the Uniform Guidance. This guidance includes the requirement that the SEFA include the ALN for each grant award included in the schedule. Cause: When awards are received during the year, management does not confirm the source of funding or the ALN with the awarding agency. Effect: The SEFA provided by management in advance of the audit was misstated because two (2) federal awards with expenditures totaling $1,695,881 were excluded. This had a direct and material effect on the audit of the major programs. Context: The Chief Financial Officer (CFO) relies on pass-through agencies to provide the funding sources, including the related ALN. Two of the award agreements did not include this information, and it was only identified that the programs were federally funded upon receipt of the audit confirmation responses. As a result, the SEFA initially provided by the CFO did not include these two programs. Recommendation: We recommend management implement policies and procedures in which the funding source of all awards (including ALN) be obtained from funders at the time that all awards are granted. View of responsible officials and Planned Corrective Actions: ECA agrees with this finding and has created a policy for identification and verification of funding sources for all contracts. This will ensure that all contracts are screened for federal funding regardless of what is listed in the contract/award/agreement. ECA will review its existing contracts to confirm all funding sources.