Finding Text
Criteria:
The following sections of the Uniform Guidance provide the following requirements:
Section §200.510 (b) Schedule of Expenditures of Federal Awards:
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 - Basis for determining Federal awards expended. While not required, the auditee may choose to provide the information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amounts of Federal awards expended for each Federal award year separately. At a minimum, the schedule must:
• List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name.
• Provide total Federal awards expended for each individual Federal program and the Assistance Listings number or other identifying number when the Assistance Listings information is not available. For a cluster of programs also provide the total for the cluster.
Section 200.303: The non-federal entity should 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.
Section 200.1 defines internal control for non-Federal entities as the processes designed and implemented by non-Federal entity to provide reasonable assurance regarding the achievement of the objectives in the following categories:
(i) Effectiveness and efficiency of operations;
(ii) Reliability of reporting for internal and external use
Condition:
During our audit of the SEFA submitted by the City, we noted that the City inadvertently booked the federal expenditure of $594,075 to one federal program. The City corrected the SEFA after the error was brought up to their attention.
Cause/Effect:
The City was not able to review the SEFA properly to ensure the federal expenditures reported are correct.
Questioned Costs:
None
Recommendation:
We recommend that the City revisit its internal control processes over the preparation and review of SEFA in conjunction with its other federal reporting requirements to ensure that the SEFA and all federal reports for internal and external purposes are accurate and complete.
Views of responsible officials and planned corrective actions:
The City implemented the new accounting rule GASB96 SBITA in Fiscal Year 2022-23. Therefore, the City had SBITA related journal entries, and inadvertently reported the non-actual expenditures that should not be accounted for on the Federal report. The City will closely review the federal expenditures and ensure proper reporting of the program/activity moving forward.
Corrective Action Plan (CAP) has been implemented as of March 21, 2024. Staff responsible for the CAP are Accounting Manager Hnin Phyu and Accountant Phat Nguyen.