Finding Text
Finding 2022-003: Internal Controls over Compliance and Other Matters Identification of Federal Funds for Purposes of Assembling the Schedule of Expenditures of Federal Awards (SEFA) ? Other U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES COVID-19 ? Community Services Block Grant? Assistance Listing No. 93.569 Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, ?the auditee must 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 2 CFR 200.502, Basis for determining Federal awards expended. Condition: Federal expenses were not correctly identified on Youthprise?s 2022 SEFA. During our audit, it was determined that a $300,000 grant from Community Action Partnership of Hennepin County under the COVID-19 ? Community Services Block Grant program was not included on the audittee prepared SEFA. Additionally, it was determined that a $3.5 million grant originally included in the SEFA was a contractor payment not a subreceipient award. Cause: Internal controls were not in place to ensure all relevant contract and grant agreement information received by Youthprise staff were passed along to the individual responsible for overseeing the audit, financial statement, and SEFA preparation. Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance. Context: The original agreement from Community Action Partnership of Hennepin County did not specify that Youthprise was considered a subrecipient federal funds. Youthprise originally considered themselves a contractor under the agreement and therefore these funds were excluded from the SEFA. Subsequently, it was verified with the pass-through entity that Youthprise is considered a subrecipient for this program. During the financial audit, it was determined Youthprise was a contractor/fiscal agent related to the $3.5 million program and therefore these funds were removed from the SEFA. Refer to Finding 2022-001 for additional context. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend that Youthprise review procedures to ensure timely identification of federal funds, including the clear distinction between subrecipient and contractor relationships for all contract and grant agreements involving federal funds. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and is in the process of developing internal controls to ensure timely and appropriate actions are made on the deficiency noted. Additional details can be found in Youthprise?s Corrective Action Plan.