Finding Text
Finding 2024-002 - Preparation of Schedule of Expenditures of Federal Awards (SEFA) Name of Federal Agency: U. S. Department of Housing and Urban Development (HUD) Award Year: 2021 and 2024 Criteria or specific requirement: Management is required by various regulatory and funding agencies, as well as by due diligence responsibilities to the general-public, to provide a single audit, or if separately, annual audited financial statements, and a program-specific audit (the SEFA). In general, it is management's responsibility to prepare the SEFA, and present it to the auditor. Condition: SC UpLift's management does not internally prepare its own full-disclosure SEFA. Currently the auditor provides significant assistance when preparing the SEFA. Cause of condition: Similar to most small-to-medium sized organizations, SC UpLift lacks the personnel with the accounting expertise and training such as that possessed by a certified public accountant or a chief financial officer of a large organization who customarily and regularly prepares appropriate reporting statements. Potential effect of condition: SC UpLift is dependent upon its external auditor to assist in preparing the SEFA, including footnotes, as part of the audit process. Recommendation: We are obligated by recently adopted auditing standards to bring this condition to the attention of management and the Board. Those charged with governance are obligated to consider the validity of these comments in light of the circumstances surrounding this condition and respond as they consider necessary. Your response may very well entail acceptance and continuance of this condition as the best perceived alternative under the circumstances. Response of Responsible SC UpLift Official: We relied on our auditor to produce the SEFA. Our accounting department is small, and consists of one contracted individual, which makes it difficult. We will continue to evaluate our ability to produce our SEFA, with related footnotes when audits are required. Auditor’s Response: Auditor concurs.