Finding 1229742 (2024-002)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2026-09-14

AI Summary

  • Core Issue: The SEFA reporting was inaccurate due to a lack of reconciliation of grant expenditures.
  • Impacted Requirements: Compliance with Uniform Guidance (2 CFR Part 200) for accurate financial reporting.
  • Recommended Follow-up: Implement a grants reconciliation process to ensure all expenditures are identified before SEFA preparation.

Finding Text

Finding Reference: 2024-002 - Inaccurate SEFA Reporting Due to Failure to Reconcile Grants Expenditures Federal Agency: Department of the Treasury Compliance Requirement: Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Federal Program: Arts and Culture District Program Grant Award: ABID-22-2022 Condition: Certain program expenditures reported on the initial SEFA provided during the audit changed as a result of the final reconciliation and determination of grant activities. The SEFA was updated with reconciled expenditures. Criteria: Uniform Guidance (2 CFR Part 200) requires recipients of federal awards to prepare a SEFA that accurately reflects expenditures incurred during the reporting period. Cause: Management did not implement adequate procedures to identify the federal expenditures prior to the preparation of the SEFA. Effect: The SEFA submitted for audit contained material misstatements. This could result in noncompliance with Uniform Guidance and inaccurate financial reporting. Questioned Costs: None Recommendation: Management should establish and enforce a grants reconciliation process to ensure that grants expenditures are fully identified and recorded before the preparation of the SEFA.

Corrective Action Plan

Finding Reference: 2024-002 Views of Responsible Officials and Planned Corrective Actions Management acknowledges that the initial Schedule of Expenditures of Federal Awards (SEFA) provided at the start of the audit did not reflect final reconciled grant expenditures and required revision during the audit. Management concurs with the finding and is implementing the following corrective actions: 1. Establishing a formal grants reconciliation process performed on a recurring basis throughout the year (rather than only at year-end), reconciling federal expenditures recorded in the general ledger to underlying grant agreements, drawdown requests, and supporting documentation. 2. Designating a staff member to maintain a running schedule of federal award expenditures by federal assistance listing number and grant award, updated each reporting period. 3. Requiring that the SEFA be prepared directly from this reconciled schedule and reviewed by management for accuracy and completeness before it is provided to the auditors. Name of the contact person responsible for corrective action: Kristina Noell, Executive Director, (202) 897-5060 Planned completion date for corrective action plan: August 5, 2026.

Categories

Reporting Procurement, Suspension & Debarment Significant Deficiency

Other Findings in this Audit

  • 1229743 2024-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $797,880