Finding 33937 (2022-003)

Finding 2022-003 ? Significant Deficiency Assistance Listing: 93.591, Family Violence Prevention and Services/State Domestic Violence Coalitions Federal Grantor: U.S. Department of Health and Human Services Compliance Requirement: Other Condition: Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) were revised during the single audit. Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.510(b) states, ?The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended in accordance with ?200.502 Basis for determining Federal awards expended.? Internal controls over the SEFA should be in place to ensure accrual basis expenses incurred under federal programs are appropriately reported as expenses on the SEFA and are appropriately reported as revenue in the financial statements prior to the single audit. Cause: The Partnership failed to prepare its Audited Financial Statements and SEFA in a timely manner due to the loss of its key accounting staff near the single audit deadline and the time it took to hire a contract accounting firm to prepare for the financial statement and single audit. Also, some expenses reported on the SEFA was not reported in the general ledger grouping for ?funders? used to separate revenues and expenses for the federal grants and were instead reported in the grouping used for unallocated operating expenses. Effect: Adjustments were needed to properly report expenses on the SEFA and make the expenses agree to federal revenues in the financial statements. If expenses are not properly reported on the SEFA prior to the start of the single audit, the auditor could omit expenses for testing or select the wrong program for testing as a major program during the single audit, which would result in the Partnership?s single audit not complying with audit standards. Recommendation: The Partnership should work with its external accounting firm to ensure the SEFA is complete and accurate and expenses agree to federal revenues reported and ensure revenues and expenses for each federal grant are included in the appropriate grouping code for the grant so revenues and expenses claimed are accounted for separately in the general ledger. Management?s Response: Management?s response to the finding is discussed in the attached Corrective Action Plan.