Finding Text
Finding No. 2022-002 Internal Control over Preparation of Schedule of Expenditures of Federal, State, and City Awards (?SEFA?) - Material Weakness in Internal Control over Compliance Condition During procedures performed for reconciliation of the information presented on the Schedule of Expenditures of Federal, State, and City Awards (SEFA) to the underlying records used to prepare the SEFA such as the general ledger, reimbursement requests and grant agreements, auditor noted the following: ? SEFA was not prepared timely, which was the result of the financial statement finding #2022-001. ? Refundable advances and receivables were not properly reflected on SEFA. This matter was reported as finding #2021-002 in the prior year and is repeated again as the issue continued into fiscal year 2022, while the Organization developed and implemented new processes and procedures to correct the issue. Criteria Uniform Guidance, Commonwealth of Pennsylvania Department of Human Services and City of Philadelphia Subrecipient Audit Guides prescribe the required Schedule of Expenditures of Federal, State, and City Awards contents and delineates how or what is deemed to be expenditures for purposes of completing the SEFA. Cause Turnover in the finance department and mid-year conversion to the new accounting system led to delays in the preparation and review of information on the SEFA prior to submittal of the schedule to the auditor. Effect Inaccurate information on the SEFA may lead to improper selection of major programs, incorrect reporting on the Data Collection Form submitted to the Federal Single Audit Clearinghouse, as well as incorrect information submitted to grantor agencies. Questioned Costs None. Identification as a Repeat Finding Yes, this is a repeat finding, see prior year finding #2021-002. Recommendation To ensure adequate internal controls over the preparation of the Schedule of Expenditures of Federal, State, and City Awards, we recommend that the Organization implement financial controls and procedures to ensure that information reported on the Schedule of Expenditures of Federal, State, and City Awards is accurate, complete, agrees to underlying records and is prepared in accordance with Uniform Guidance, Commonwealth of Pennsylvania Department of Human Services and City of Philadelphia Subrecipient Audit Guides, and in a timely manner. Views of Responsible Officials and Planned Corrective Actions See corrective action plan.