Finding Text
Finding 2025-001 – Schedule of Expenditures of Federal Awards (SEFA) Preparation Information on Federal Program(s) – US Department of Health and Human Services and US Department of Housing and Urban Development, 93.224/93.527 Health Center Program Cluster, 93.778 Grants to States for Medicaid, 14.267 Continuum of Care Program Criteria - In accordance with the Code of Federal Regulations (CFR) Section 200.510(b), non-federal entities must prepare a SEFA for the period covered by the entity’s financial statements, including the total federal awards expended for each individual program and the Assistance Listings number (ALN). For a cluster of programs, the non-federal entity must provide the cluster name and total for the cluster. Condition - During our review of the SEFA, errors were identified in ALN classification, completeness of federal expenditures, inclusion of nonfederal expenditures, inclusion of out of period expenditures, and identification and presentation of clusters. Cause - The Organization’s review of the SEFA was not conducted at a level of precision sufficient to identify and prevent errors in the SEFA preparation process. As a result, the SEFA was not prepared in accordance with the Code of Federal Regulations. Effect - The SEFA was not accurately or completely prepared. The omission of certain federal expenditures resulted in a major program not being identified in the original major program determination process. In addition, the use of inaccurate ALN classifications resulted in changes to the expenditures reported within one of the major programs. Questioned Costs – None Context - During our review of the SEFA, we identified multiple errors in the Organization’s presentation and reporting of federal expenditures. The Organization did not properly identify applicable federal program clusters, reported incorrect ALNs for two federal grants, included $33,847 of non-federal expenses as federal expenditures, excluded $924,673 of expenditures related to two federal grants, and reported $118,099 of expenditures related to four federal grants in the incorrect reporting period. These errors affected major program determination and reporting. Repeat Finding – No Recommendation - We recommend the Organization enhance its review controls over SEFA preparation to ensure the SEFA is accurately and completely prepared in accordance with the Code of Federal Regulations. Management’s review should be performed at a sufficient level of precision to identify and prevent errors prior to issuance. View of Responsible Officials - Management agrees that appropriate controls are necessary to ensure the SEFA is complete, accurate, and prepared in accordance with federal requirements. The SEFA process will include reconciliation of federal expenditures to the general ledger and grant records, verification of Assistance Listing Numbers (ALNs), identification of applicable program clusters, and confirmation that expenditures are reported in the proper reporting period.