Finding Text
Criteria: U.S. Code of Federal Regulations, Title 2, Part 200, section 510(b) Schedule of Expenditures of Federal Awards requires recipients of federal awards to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee?s financial statements to accurately reflect federal awards expended for individual federal programs during the auditee?s fiscal year. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Condition: For the Community Development Block Grant Program for Entitlement Communities (CDBG) (Assistance Listing Number 14.218), the grant was erroneously identified as a city (or local government) grant and therefore, total expenditures of $589,466 incurred during the year were not initially properly identified and reported on the SEFA. Cause: Homeboy Industries was initially unaware that the funds granted by the City of Los Angeles were pass-through federal funds. Effect or Potential Effect: As a result, until the SEFA was corrected, it did not report the complete activity under the loan program for the year ended December 31, 2022. Questioned Costs: N/A. Recommendation: Homeboy Industries should establish a thorough internal review process to ensure amounts reported on the SEFA represent complete and accurate expenditures incurred in the applicable fiscal year. Repeat Finding: Not Applicable