Finding Text
Assistance Listing Number, Federal Agency, and Program Name ALN 20.507, U.S. Department of Transportation, Federal Transit Cluster
Federal Award Identification Number and Year 20.507, fiscal year 2023
Pass through Entity N/A
Finding Type Material weakness
Repeat Finding No
Criteria Per 2 CFR 200.510(b): 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 determined in accordance with §200.502.
Condition The schedule of expenditures of federal awards (SEFA) was inaccurate.
Questioned Costs None
Identification of How Questioned Costs Were Computed Not applicable
Context In fiscal year 2023, the Authority expended approximately $21.7 million of federal funding. The Authority accumulates the financial data and other required information to complete the SEFA. Due to lack of control on reviewing drawdowns after year end to ensure they are reported properly, an adjustment was identified by the auditors related to ALN 20.507 for approximately $1,500,000 that was improperly excluded from the original SEFA provided by the Authority to the auditors.
Cause and Effect Controls in place to ensure the SEFA was complete and accurate were not effective. The error in the SEFA has been corrected.
Recommendation The Authority should implement a process to ensure the SEFA is complete and accurate by thoroughly reviewing agreements for grants received and reconciling the SEFA to a final trial balance prior to the start of the audit. The Authority should also ensure completeness by reviewing drawdowns after year end to ensure that they are reported in the correct period on the SEFA.
Views of Responsible Officials and Planned Corrective Actions Management would like to point out that this finding is related to Finding 2023 001. The accrual of additional grant invoices resulted in parallel updates to our SEFA schedule. Therefore, this finding is a direct result of Finding 2023 001.
As an aside, our current process for SEFA reporting is manual. We are investing in a new accounting system, in which the SEFA information will not require manual intervention and, thus, will reduce any potential entry errors in the future.