Finding Text
Federal Award Number and Award Year 4486DR-FL and January 1, 2024 to December 31, 2024 Criteria According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of federal awards for the period covered by the entity’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-federal entities receiving federal awards to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal control should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Condition and Context The Organization did not have adequate controls in place related to the identification and reporting of federal expenditures for the COVID-19 Disaster Grants - Public Assistance (Presidentially Declared Disasters) program (FEMA) on the SEFA. Specifically, the Organization lacked controls to ensure expenditures incurred for FEMA were recognized on the SEFA when obligated. As a result, $4,644,457 of FEMA expenditures were omitted from the December 31, 2024 SEFA. Possible Cause and Effect Management did not perform appropriate risk assessment procedures related to federal awards that have unique recognition criteria such as FEMA. Specifically, there was not a control in place to ensure FEMA expenditures were recognized on the SEFA based on when the FEMA award was both obligated and expenditures were incurred. Failure to establish effective internal controls over the preparation of the SEFA may prevent the Organization from reporting accurate information and completing an audit in accordance with the Uniform Guidance. Questioned Cost Not applicable Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding Not a repeat finding. Recommendation We recommend that the Organization strengthen its processes and internal controls over ensuring that expenditures have been reported completely and accurately on the SEFA. View of Responsible Official Management agrees with the noted finding.