Finding Text
Significant deficiency - Preparation of the Schedule of Federal Expenditures
U.S. Department of Health and Human Services CFDA #93.566
U.S. Department of Labor CFDA #17.258 / 17.259 / 17.278
Criteria: Uniform Guidance requires Organizations to prepare a schedule of expenditures of federal awards for the period covered by the audit. The schedule must list individual federal programs by federal agency and provide total federal awards expended for each individual federal program and the Assistance Listings Number.
Condition: The Organization does not have a system for identifying federally funded expenditures in order to prepare the Schedule of Federal Expenditures (SEFA). During our review of the SEFA, we uncovered multiple inaccuracies which resulted in a net decrease in total federal expenditures of approximately $585,000. This changed the classification of Type A and Type B programs and affected the determination of which programs were audited under the Uniform Guidance regulations.
Cause: This situation was attributed to (1) the turnover and vacancy in the accounting department positions from July 2021 through May 2022 which resulted in the absence of guidance during the transition process for the newly hired personnel. (2) FCCP was awarded grants from new funders with varying grant funding criteria than in previous years. Thus, with the change in the type of grants and funders there was a disconnect on what type of funds were being passed through to FCCP.
Effect: Inaccurate reporting of the Schedule of Expenditures of Federal Awards (SEFA) could potentially lead to the incorrect inclusion or exclusion of federal programs in the annual single audit. This could result in non-compliance with reporting requirements set by grantors and ultimately jeopardize the renewal of funding.
Questioned Costs: None.
Repeat Finding: No
Recommendation: We advise management to maintain a comprehensive log documenting all grants received, both federal and non-federal, including grant #, funding source, grant period, total available funding, amount advanced, amount of reimbursable expenditures invoiced, etc to ensure accurate reporting in the Schedule of Expenditures of Federal Awards.
In addition, we recommend confirming directly with the granting organizations (a) the amount of total approved grant expenditures incurred during the fiscal year, (b) the amount of federally funded expenditures included in total expenditures, (c) the amount advanced under the contract, if any, and (d) the amount owed to FCCP at June 30th.
Response: The finance manager will have a SEFA template to record each grant as it is being awarded throughout the fiscal year. The Organization has created and maintains a comprehensive log of all grants received. Log data includes grant number, grant source and CFDA number, the grant period, total grant amount, the grant advance amount received, the usage of the funds, and the remaining balance.