Finding Text
Finding 2023-001 Material Weakness: Schedule of Expenditures of Federal
Awards (SEFA) – Control Finding
Criteria Or Specific Requirement: Title 2 U.S. Code of Federal Regulations Part 200,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (the Uniform Guidance) provides guidance related to preparation and
reporting of the SEFA. 2 CFR Section 200.100 identifies the required elements of the
SEFA and 2 CFR Section 200.510 specifically requires that the SEFA include
information on each federal award expended during the year. Southwest Organizing
Project (the Project) is required to prepare a complete and accurate SEFA and to have a
system of internal controls, the design and operation of which allows management or
employees in the normal course of performing their assigned functions to prevent, or
detect and correct, errors on a timely basis.
Condition: The SEFA was incomplete and contained inaccurate assistance listing
numbers. Additionally, federal programs were excluded from the SEFA in error and
federal expenditures included unallowable amounts. As a result, while not material to
the financial statements, the SFEA required material adjustments during the audit
process.
Cause: Management does not have an internal control process in place to ensure an
accurate SEFA.
Effect: The possibility exists that errors within the SEFA could become material to the
financial statements or result in an incorrect major program determination.
Questioned Costs: Not applicable
Context: A sufficient review of the SEFA did not occur so errors were not detected by
management.
Identification As A Repeat Finding: N/A
Recommendation: The Project should strengthen its internal controls by
implementing additional training and oversight of personnel to ensure the SEFA
accurately reflects federal expenditures for the fiscal year.
Views Of Responsible Officials And Planned Corrective Action: An adequate
system of internal controls will be put in place by the end of fiscal year 2024. To ensure
SEFA will include accurate assisting listing numbers and accurate inclusion of all
federal programs. Allowable and unallowable costs will be reviewed to ensure accurate
federal expenditure reporting. Management will perform an exhaustive review of all
grants to close out the fiscal year in preparation for the audit process. In addition to
these, SWOP will work with a consultant to provide necessary training of finance
personnel.