Finding 1239408 (2025-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-09-30

AI Summary

  • Core Issue: Downstreet's draft SEFA missed about $1.2 million in federal awards.
  • Impacted Requirements: The Organization failed to meet the Uniform Guidance for accurate federal award reporting.
  • Recommended Follow-Up: Enhance internal controls to ensure all federal expenditures are accurately reported on the SEFA.

Finding Text

Federal Awards: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: The auditee is responsible for preparing an accurate schedule of expenditures of federal awards (SEFA) in accordance with the Uniform Guidance. Condition: Downstreet’s draft schedule of expenditures of federal awards incorrectly omitted approximately $1.2 million in federal awards. Context: The Organization received significant federal awards that were passed through to other entities. Cause: Lack of adequate controls over preparation of the SEFA. Effect: Lack of adequate controls over preparation of the schedule of expenditures of federal awards could result in errors in the major program selection for audit. Recommendation: We recommend the Organization improve internal controls over reporting to ensure it appropriately identifies all expenditures of federal awards for inclusion on the SEFA. Views of responsible officials: Management concurs with the finding. The omitted expenditures related primarily to federal awards received through pass-through entities and subsequently provided to other entities. Although the underlying transactions were recorded in the accounting records, the process used to identify and compile federal expenditures for the SEFA did not adequately capture all applicable awards. Management agrees that additional reconciliation and review controls are necessary to ensure the completeness and accuracy of the SEFA

Corrective Action Plan

Finding 2025-001 Finding type: Significant deficiency. Federal award: 21.027 Coronavirus State and Local Fiscal Recovery Funds Passthrough organizations: 21.027 (Agency of Commerce and Community Development, Town of Waterbury, City of Barre, Vermont Department of Environmental Conservation) Condition: Organization’s draft Schedule of Expenditures of Federal Awards was missing certain awards. Management concurrence: Management concurs with this finding. Corrective action plan: Downstreet Housing & Community Development will strengthen its procedures for preparing and reviewing the Schedule of Expenditures of Federal Awards. Management will maintain a centralized listing of federal awards, including awards received directly and through pass-through entities, and will identify awards for which Downstreet provides funding to other organizations. At least annually, and as part of the year-end closing process, the listing will be reconciled to the general ledger, grant records, executed agreements, reimbursement activity, and amounts passed through to other entities. The completed SEFA and supporting reconciliation will be reviewed by a supervisory finance official before being provided to the auditors. The review will include verification of assistance listing numbers, pass-through entities, expenditures, and subrecipient or pass-through activity, as applicable. Projected completion date: December 31, 2026 Responsible official: Schuyler Anderson, CFO/COO

Categories

Reporting

Other Findings in this Audit

  • 1239404 2025-001
    Material Weakness Repeat
  • 1239405 2025-001
    Material Weakness Repeat
  • 1239406 2025-001
    Material Weakness Repeat
  • 1239407 2025-001
    Material Weakness Repeat
  • 1239409 2025-002
    Material Weakness Repeat
  • 1239410 2025-002
    Material Weakness Repeat
  • 1239411 2025-002
    Material Weakness Repeat
  • 1239412 2025-002
    Material Weakness Repeat
  • 1239413 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.251 ECONOMIC DEVELOPMENT INITIATIVE, COMMUNITY PROJECT FUNDING, AND MISCELLANEOUS GRANTS $720,000
14.228 COMMUNITY DEVELOPMENT BLOCK GRANTS/STATE'S PROGRAM AND NON-ENTITLEMENT GRANTS IN HAWAII $500,000
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $250,000
21.000 NEIGHBORWORKS AMERICA $233,000
81.042 WEATHERIZATION ASSISTANCE FOR LOW-INCOME PERSONS $32,801
14.169 HOUSING COUNSELING ASSISTANCE PROGRAM $26,226