Finding Text
Criteria: According to 2 U.S. Code of Federal Regulations Part 200 , Subpart F - Audit Requirements, the Organization is required to prepare a SEFA that accurately reflects the total federal awards expended during the period covered by the financial statements. Specifically, section 200.510(b) mandates the preparation of a complete SEFA, Section 200.510(b)(3) requires the SEFA will include the total federal awards expended under each federal program and ALN, and finally, Section 200.508(b) emphasizes the importance of ensuring the SEFA is accurate, complete, and prepared in accordance with federal requirements. Condition: During the course of our audit, the Organization identified and corrected a discrepancy in the Schedule of Expenditures of Federal Awards (SEFA) related to three programs. Specifically, the following programs were calculated using incorrect information: 97.008 - Michigan State Police Nonprofit Security Grant 21.027 - Small Business Support HUB Program 94.013 - AmeriCorps VISTA Support Grant Context: The issue was identified during the reconciliation of the SEFA to the general ledger detail, prompting Jewish Family Services to recalculate the total using correct information and provide a revised SEFA. Management's documented controls were not sufficient. Effect: Ineffective controls to properly prepare and review the 2025 SEFA resulted in an overstatement of expenses for three programs; the total overstatement of $229,757 in the 2025 SEFA was ultimately corrected by management. Questioned Costs: No Repeat Finding: N/A Recommendation: Management should strengthen its internal controls over the preparation of the SEFA, including a secondary review, to ensure all expenditures associated with federal programs are identified and accurately reported. Views of Responsible Officials: Management agrees with the finding and has provided the accompanying corrective action plan.