Finding 35875 (2022-001)

Section III ? Federal Award Findings and Questioned Costs 2022-001 Internal Control over Compliance and Compliance with Reporting - Preparation of the Schedule of Expenditures of Federal Awards Information on the Major Federal Program ? General Services Administration Assistance Listing Number: 39.RD Assistance Listing Name: Advisory & Assistance Services Criteria - The Uniform Guidance in 2 CFR ?200.510 (b) states in part: ?The auditee must also 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 CFR ?200.502 Basis for determining Federal awards expended.? Condition - Certain contract expenditures related to the Advisory & Assistance Services award with General Services Administration (GSA) were incorrectly reported in the initial SEFA. The total federal expenditures initially reported in the SEFA for this award totaled $3,719,891. However, based on testing by the auditors, contract expenditures totaling $3,119,210 were determined to not qualify for SEFA presentation based on CFR Section ?200.502 due to a certain task within the award being firm fixed price. Cause ? One task of the Advisory & Assistance Services award was incorrectly labeled as cost-reimbursable with the Organization?s accounting system. This error resulted in the Organization not following its policies and procedures in place to ensure compliance with the requirements regarding the preparation of the SEFA. Effect or Potential Effect - Failure to comply with the reporting requirements of the Uniform Guidance related to the preparation of the SEFA could result in expenses from Federal awards being inaccurately reported. Questioned Costs - None. Context - This is a condition identified based upon our review of the Organization?s compliance with specified requirements required based on CFR ?200.502. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend that the Organization implement policies and procedures to ensure that Federal expenditures reported on the SEFA are properly included based on underlying Federal and award requirements. Views of Responsible Officials - Management agrees with the finding. The inclusion of the contract task was an oversight as the project type was mislabeled in the accounting system. Riverside will implement an additional review of projects created in the accounting system to ensure the reliance of the information to identify only the amount of Federal awards that are required to be reported under CFR ?200.502. Additionally, the one task of the Advisory & Assistance Services award that was the cause of the issue has been corrected within the accounting system.