Finding Text
Finding # 2023-002
Program: Various, including AL 20.509 – Formula Grants for Rural Areas and Tribal Transit Program – Reporting
Grant Number & Year: Various
Federal Grantor Agency: Various, including U.S. Department of Transportation
Pass-Through Entity: Various, including Nebraska Department of Transportation
Criteria: Title 2 of the U.S. Code of Federal Regulations (CFR) § 200.510(b) (January 1, 2023) states, in part, the following:
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 as determined in accordance with § 200.502. . . . (2) For Federal awards received as a subrecipient, the name of the passthrough entity and identifying number assigned by the pass-through entity must be included. . . .
Title 2 CFR § 200.302(b) (January 1, 2023) states, in relevant part, the following:
The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any.
Title 2 CFR § 200.303 (January 1, 2023) states the following, in relevant part:
The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ‘‘Standards for Internal Control in the Federal Government’’ issued by the Comptroller General of the United States or the ‘‘Internal Control Integrated Framework’’, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Title 2 CFR § 200.511(a) (January 1, 2023) requires the auditee to prepare a summary schedule of prior audit findings. Per subsection (b)(2) of that same regulation, “When audit findings were not corrected or were only partially corrected, the summary schedule must describe the reasons for the finding’s recurrence and planned corrective action, and any partial corrective action taken.”
The U.S. Department of Transportation adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards in Title 2 CFR § 1201.10 (January 1, 2023).
A good internal control plan requires adequate procedures to ensure the Schedule of Expenditures Federal Awards (SEFA) is properly presented and includes all Federal expenditures made by the County during the fiscal year.
Condition: Kimball County does not have adequate procedures in place to ensure the SEFA is prepared accurately and includes all Federal expenditures of the County. Consequently, there were numerous errors in the SEFA that were identified by the auditors.
A similar finding was noted during the fiscal year 2022 audit. The Summary Schedule of Prior Audit Findings lists the status of this finding as complete.
Repeat Finding: Finding # 2022-002
Questioned Costs: None
Statistical Sample: No
Context: Specifically, we noted the following errors during our audit:
• Fiscal year 2023 Federal expenditures of $276,566 were improperly omitted from the SEFA for Assistance Listing 20.509.
• Fiscal year 2022 Federal expenditures of $92,389 were improperly included as fiscal year 2023 expenditures for Assistance Listing 20.509.
• Non-Federal expenditures of $253,869 were improperly included as Federal Expenditures for Assistance Listing 20.509. These expenditures were paid with State funds and, therefore, should not have been included on the SEFA.
• The SEFA provided by Kimball County did not include the assistance listing number to which the expenditures were related, nor did it identify the name of the pass-through entity or the identifying number assigned by the pass-through entity.
Corrections were made for these errors after they were identified by the auditors to ensure the SEFA was properly presented.
Cause: Kimball County continues to lack personnel with adequate knowledge of Federal reporting and compliance requirements to prepare an accurate SEFA.
Effect: Increased risk for the SEFA to be inaccurate, which could lead to Federal sanctions or failure to audit programs that should be audited.
Recommendation: We recommend the County work with their pass-through entities to obtain training necessary to understand fully Federal reporting and compliance requirements, including how to prepare the SEFA accurately.
View of Officials: The information provided to the auditors regarding the SEFA did contain additional information such as the Federal and State reimbursements for the months before and after the fiscal year. While it is our responsibility to provide just the information required, the information was trackable and accurate per month.