Finding Text
Finding 2024-003 Inaccurate SEFA - Reporting - Material Weakness Name of Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Recommendation: We recommend the Organization strengthen its policies, procedures, and controls for the identification of federal awards to ensure a complete and accurate SEFA is prepared in a timely manner. Views of Responsible Officials: Management agrees with the finding and is in the process of revising internal controls to address SEFA preparation. Assistance Listing Number: 21.027 Federal Award Identification Number and Year: Identification number unavailable. Name of Pass-through Entity (if applicable): City of New Bedford Criteria: In accordance with 2 CFR 200.302 (Financial Management), a grant recipient's financial management system must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. In addition, 2 CFR 200.510 (Financial Statements), states in part that the auditee must prepare a schedule of expenditures of Federal awards ("SEFA") for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2CFR 200.502. At a minimum, the schedule must include: All individual federal programs by federal agency. For federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. Provide total federal awards expended for each individual federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available. Include the total amount provided to subrecipients from each federal program. Condition / Context: The Organization management's review and approval process did not detect the errors that were identified during the audit procedures performed. The errors detected consisted of the understatement of Federal Assistance Listing Numbers 21.027 and 14.251 in the amount of $450,038 and $225,895, respectively, for a total understatement of $675,933. Cause: The Organization's internal controls over the preparation and review of the SEFA were not operating effectively. Material audit adjustments were proposed during the course of the audit that lead to material changes to the SEFA. Effect or Potential Effect: Inadequate controls over the preparation of the SEFA could result in financial misstatements or potential noncompliance. Questioned Costs: None Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization strengthen its policies, procedures, and controls for the identification of federal awards to ensure a complete and accurate SEFA is prepared in a timely manner. Views of Responsible Officials: Management agrees with the finding and is in the process of revising internal controls to address SEFA preparation.