FAC Explorer

Finding 1236520 (2025-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-09-24
Audit: 412067
Organization: Homeward Bound Inc. (TX)
Auditor: STILL BURTON PLLC

AI Summary

  • Core Issue: The SEFA was incomplete and inaccurate, delaying the audit process.
  • Impacted Requirements: Compliance with Uniform Guidance section 200.510 for preparing a complete SEFA.
  • Recommended Follow-up: Ensure all relevant information is included, have a second person review for accuracy, and reconcile the SEFA with financial statements before submission.

Finding Text

Criteria: Internal controls should be designed to capture federal expenditures in order to ensure that an accurate Schedule of Expenditures of Federal Awards (SEFA) can be prepared. Condition: Uniform Guidance section 200.510 requires the auditee to prepare a SEFA. A complete and accurate SEFA was not provided to the audit team until several revisions based on questions from the auditor. Cause: A cost-reimbursement contract was new this year but was not included on the SEFA originally. Certain formulas were miscalculating on the spreadsheet. Certain amounts were incorrect originally. Questioned costs: NONE. Effect: The SEFA is used by the auditor to determine which federal programs are to be audited as major programs and to accurately report expenditures to the federal government and granting agencies. Major programs may not be properly identified and report in accordance with the Uniform Guidance. Recommendation: All information should be included on the SEFA by employees familiar with the grant awards. All grant awards should be evaluated for the nature of the funding and identified as federal, if applicable. A review should be performed by someone other than the preparer for accuracy and completeness. A reconciliation between the SEFA and the financial statements should be performed prior to submitting the SEFA to the auditor for testing. Management's Response: Management agrees with the finding.

Corrective Action Plan

Root Cause: The organization failed to correctly process claims under the correct contract. Once errors were detected, a correction was attempted in the CMBHS system, but the system reprocessed the claim with the original incorrect data and it could not be corrected. In addition, finance personnel lacked sufficient knowledge and training on how to prepare a Schedule of Expenditures of Federal Awards (SEFA) that accurately reconciles to the general ledger (GL). Corrective Action: 1. Review of existing policies and procedures for completeness. 2. Require supervisory review and approval of all grant-related expenditures prior to posting in external CMBHS system. 3. Continue to conduct training for finance staff on importance of data accuracy when processing in external systems. 4. Continue to reach out to CMBHS help desk and our contract manager to address issues as they arise. 5. Continue to perform monthly and quarterly internal monitoring reviews of grant expenditures to submitted claims. 6. Review of SEFA report with accounting team prior to submission to auditors Responsible Person: Patricia Guerra Implementation Date: • Supervisory review implementation: September 15, 2026 • Staff training: September 15, 2026 • Monthly and Quarterly monitoring reviews: Beginning September 30, 2026 Expected Outcome: All federal grant claims will be processed under the correct contract reducing the risk of future noncompliance

Categories

Reporting Cash Management

Programs in Audit

ALN Program Name Expenditures
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $1.86M
94.006 AMERICORPS STATE AND NATIONAL 94.006 $163,634