Finding 1240007 (2025-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-10-06

AI Summary

  • Core Issue: The Schedule of Expenditures of Federal Awards (SEFA) was inaccurately prepared, reporting the wrong federal agency and overstating expenditures by $670,578.
  • Impacted Requirements: Compliance with 2 CFR Part 200 is at risk due to inaccurate reporting, which could lead to issues with major program identification and federal oversight.
  • Recommended Follow-Up: Implement a detailed review process for SEFA preparation, ensuring all federal award information is verified against documentation before finalization.

Finding Text

U.S. Department of Agriculture – 10.558 Child and Adult Care Food Program 2025-001 Inaccurate Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Criteria: The auditee is responsible for preparing an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with the requirements of 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The SEFA should properly identify federal awards expended, including the correct federal agency, pass-through entity information, Assistance Listing number, program name, and total federal expenditures for the audit period. Condition: During our audit, we noted that the SEFA prepared by management contained inaccuracies related to the Child Care and Adult Food Program. Specifically, the SEFA reported the wrong federal agency and the wrong pass-through agency. In addition, federal expenditures reported on the SEFA were overstated by$670,578. Cause: The inaccuracies appear to have resulted from insufficient review procedures over the preparation of the SEFA, including inadequate verification of award documentation, federal agency information, pass-through entity information, and expenditure amounts prior to finalization of the schedule. Effect: As a result, the SEFA was materially misstated prior to audit adjustment. Inaccurate reporting of federal agency and pass-through agency information, as well as overstated federal expenditures, could result in improper identification of major programs, inaccurate reporting to federal oversight agencies, and noncompliance with Single Audit reporting requirements. Questioned Costs: None noted. Recommendation: We recommend that management strengthen internal controls over SEFA preparation by implementing a detailed review process to verify all federal award information against grant agreements, award notifications, pass-through entity communications, general ledger detail, and other supporting documentation. This review should include confirmation of the correct federal agency, pass-through agency, Assistance Listing number, program name, and total federal expenditures before the SEFA is finalized. Views of Responsible Officials and Planned Corrective Actions: Responsible Person(s): Leesha Culp, Director CACFP/ECA Executive Director Anticipated Completion Date: November 2026 In September 2026, the Organization terminated its contract with its previous accounting services provider and engaged Whittle Strategic Accounting with demonstrated experience serving nonprofit organization subject to annual audits. In conjunction with this transition, ECA management will implement and oversee a documented grant-tracking and review process. Management will maintain complete award documentation, establish and approved grant-specific accounting codes, and provide coding direction to the financial services provider. ECA management will review grant activity against award documents and the general ledger at least quarterly. Before the SEFA is finalized, a designated member of management will independently verify the federal agency, pass-through entity, Assistance Listing number, program name, and total federal expenditures and document final approval. The new provider will support transaction recording and reconciliation. ECA management will retain responsibility for the internal controls, accuracy, review, and approval of all grant information and the SEFA.

Corrective Action Plan

Views of Responsible Officials and Planned Corrective Actions: Responsible Person(s): Leesha Culp, Director CACFP/ECA Executive Director Anticipated Completion Date: November 2026 In September 2026, the Organization terminated its contract with its previous accounting services provider and engaged Whittle Strategic Accounting with demonstrated experience serving nonprofit organization subject to annual audits. In conjunction with this transition, ECA management will implement and oversee a documented grant-tracking and review process. Management will maintain complete award documentation, establish and approved grant-specific accounting codes, and provide coding direction to the financial services provider. ECA management will review grant activity against award documents and the general ledger at least quarterly. Before the SEFA is finalized, a designated member of management will independently verify the federal agency, pass-through entity, Assistance Listing number, program name, and total federal expenditures and document final approval. The new provider will support transaction recording and reconciliation. ECA management will retain responsibility for the internal controls, accuracy, review, and approval of all grant information and the SEFA.

Categories

Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1240006 2025-001
    Material Weakness Repeat
  • 1240008 2025-004
    Material Weakness Repeat
  • 1240009 2025-004
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.558 CHILD AND ADULT CARE FOOD PROGRAM $4,789