Finding Text
Finding 2022-002: Preparation of Schedule of Expenditures of Federal Awards (Repeat Finding 2021-02) Program Name: Railroad Rehabilitation and Improvement Financing Program Assistance Listing No. 20.316 Federal Award No.: RRIF_2016_0040 Federal Agency: U.S. Department of Transportation Criteria The code of federal regulations ? 2 CFR 200.510(b)(5) and 2 CFR 200.502(b) require that: (a) For loan or loan guarantee programs described in 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. (b) Loan and loan guarantees (loans). Since the Federal Government is at risk for loans until the debt is repaid, the following guidelines must be used to calculate the value of Federal awards expended under loan programs, except as noted in paragraphs (c) and (d) of 2 CFR 200.502: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. Condition The following exception to the criteria was observed during the performance of the audit procedures: In the preparation of the Schedule of Expenditures of Federal Awards (SEFA) which was provided to EY in relation to FY22 Uniform Guidance audit, Amtrak incorrectly presented the balance of the federal program Assistance Listing #20.316 - Railroad Rehabilitation and Improvement Financing by not reducing the loan amount by the FY21 loan repayments of $39 million. Amtrak provided EY an updated SEFA which corrected the presented balance to account for loan repayments made. Questioned Costs None. Context We have performed procedures to reconcile underlying data to amounts reported on the SEFA. Exception as described in the Condition section above were noted for the matter under 2 CFR 200.502 (b)(2) within the Criteria section, indicating that internal controls were not functioning as designed. Effect Amtrak?s control procedures in place as it relates to the preparation of the SEFA were not designed in such a manner that would timely identify the conditions noted. The effect of the condition above led to an initially overstated SEFA by $39.0 million. The SEFA within has been adjusted for this overstatement. Cause The exception from the criteria noted is attributed to the following cause: 1. Overall lack of familiarity with the Uniform Guidance Requirement stipulated within 2 CFR 200. Identification as a Repeat Finding The finding related to the Criteria above was identified as a repeat finding in the immediate prior year as Finding 2021-002. Recommendation To address the Condition identified above, we recommend Amtrak to ensure that SEFA preparation policy and review procedures that have been established address appropriate preparation of the SEFA in accordance with 2 CFR 200 requirements for presentation and disclosure. Additionally, management should consider requiring key Grants Management personnel take advanced Uniform Guidance training and annual updates, as made available. Views of Responsible Officials Amtrak agrees with the recommendation to review and enhance the SEFA preparation procedures to ensure full compliance with 2 CFR Part 200 requirements. In FY22 Amtrak expanded the grants management team and hired an additional Director level position to ensure the grants management team is adequately staffed. Amtrak recognizes the importance of keeping personnel up to date with changes to regulations and will consider providing Uniform Guidance training to key personnel on an annual basis.