Finding Text
2025-003 Preparation of the Schedule of Expenditures of Federal Awards. Federal Program Information: Coronavirus State and Local Fiscal Recovery Funds (FAL #21.027) Condition and Criteria: The Schedule of Expenditures of Federal Awards (SEFA) is prepared using source information other than the financial reports generated by the accounting system. As a result, the Organization's internally prepared SEFA did not agree to the Organization's financial records. Prior Year Audit Finding: 2024-004 Cause and Effect: The SEFA was prepared and reconciled to the amount of cash drawdowns for the year rather than total expenditures incurred for the year. This could result in a material misstatement in the SEFA. Context: This represents a systemic problem. Questioned Costs: None. Recommendation: The SEFA should be prepared and reconciled to the general ledger by an employee knowledgeable of the grant activity for the year. Someone other than the preparer should review the SEFA for accuracy and completeness to identify any errors and maintain proper internal controls over the preparation of the SEFA. Management’s Response: Healing Transitions acknowledges the findings noted in the Schedule of Findings and Questioned Costs. Management reviewed the matters identified and addressed them during the audit process in coordination with the auditors. Corrective actions included engaging an outsourced accounting organization under a three-year contract to provide stability in the finance function of the Organization. The accounting organization will reconcile grant activity reported by the organization with the general ledger on a monthly basis. All necessary adjustments have been recorded, and management believes the actions adequately address the items noted.