Finding Text
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS – significant deficiency. Criteria: The books and records support the preparation of the Schedule of Expenditures of Federal Awards. Condition: During fiscal 2022, a complete income statement (including allocations) for each cost reimbursement Federal award was not available to compile the Schedule of Expenditures of Federal Awards (SEFA) on a timely basis. During 2025, an outside CPA firm was contracted to complete the 2021 and 2022 accounting close and prepare for the required 2022 Single audit (including reconstructing all Federal expenditures in the books and records to accurately prepare the SEFA). Questioned Cost: None Effect: Without full grant accounting within QuickBooks, the organization is not able to determine when a Single Audit is required and/or prepare an accurate SEFA on a timely basis. Cause: The individual grant income statements should include full GAAP accounting including prepaid expenses, accrued expenses, unbilled receivables, allocated indirect costs, and program income. The surplus/deficit should be nearly zero for each cost reimbursement contract. Recommendation: It is a best practice to utilize a grant bridging report (based on grant income statements) to understand any differences between grant revenues and expenses (for cost reimbursement contracts), as well as progress against grant budgets. Expenditures of federal awards should agree to each contract income statement. Status: See the CAFF’s Corrective Action Plan on page 35.