Finding 38391 (2022-001)

Criteria: Internal controls and procedures should be established to ensure accurate and complete financial reporting of all federal award related expenditures within the Schedule of Expenditures of Federal Awards (SEFA) in accordance with Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Condition: Multiple federal grant awards were identified during the audit process which were not initially included in the Schedule of Expenditures of Federal Awards, as originally prepared. Cause: The Borough's Treasurer is new to her position after fiscal year end and did not have clear procedures to follow in order to draft the Schedule of Expenditures of Federal Awards. Because the Borough is relatively small, the number of federal awards normally received has historically been limited. The Borough's Treasurer had not previously acquired the experience of accounting for multiple federal grants including new grant awards made available to local governments as a result of the COVID-19 pandemic. Effect: Several corrections were necessary to ensure the completeness of the SEFA. Many of the adjustments were identified as a result of audit procedures performed for the basic financial statements. Recommendation: In order to ensure the accuracy and completeness of the SEFA it is important to identify the appropriate funding source of all grant awards received. This should be determined at the time the Borough makes an application for a new grant award or when grant funds are received by the Borough if no specific grant application is made. Views of responsible officials: See the corrective action plan.