Finding Text
Statement of Condition NEW did not prepare a complete and accurate Schedule of Expenditures of Federal Awards (“SEFA”). The SEFA was substantially prepared by the auditors based upon information obtained during the audit. NEW lacked the internal expertise and procedures necessary to prepare the SEFA. The auditors were required to identify federal awards, determine Assistance Listing Numbers, compile federal expenditures, and prepare the SEFA. Criteria or Specific Requirement 2 CFR § 200.510(b) requires the auditee to prepare a SEFA for the period covered by the auditee's financial statements which accurately presents federal expenditures by federal program and Assistance Listing Number. Questioned Costs Not applicable. Effect Errors or omissions in the SEFA may result in inaccurate reporting of federal expenditures and could affect the determination of major programs and the scope of the Single Audit. Cause Management did not maintain sufficient internal controls over the accumulation, review, and reporting of federal award expenditures necessary to prepare an accurate SEFA. Recommendation Management should establish and document procedures for preparing and reviewing the SEFA, including: • Maintaining a complete listing of all federal awards. • Reconciling SEFA expenditures to the general ledger. • Verifying Assistance Listing Numbers and pass-through information. • Performing an independent management review prior to submission to the auditors. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding and will implement procedures to ensure the SEFA is prepared and reviewed internally prior to the commencement of future audits.