FAC Explorer

Finding 44420 (2022-002)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-03-30
Audit: 52410
Organization: Boys and Girls Clubs of the Coastal Plain, Inc. (NC)
Auditor: Blackman & Sloop CPAS P A

AI Summary

  • Core Issue: The Schedule of Expenditures of Federal Awards (SEFA) was not aligned with the Organization's financial records due to using incorrect source information.
  • Impacted Requirements: This discrepancy could lead to a material misstatement in the SEFA, affecting compliance with federal program requirements.
  • Recommended Follow-Up: Ensure the SEFA is prepared and reconciled to the general ledger by a knowledgeable employee, with an independent review for accuracy and completeness.

Finding Text

Preparation of the Schedule of Expenditures of Federal Awards. Federal Program Information: Child and Adult Care Food Program (Federal Assistance Listing ? 10.558) Condition and Criteria: The Schedule of Expenditures of Federal Awards (SEFA) is prepared using source information other than the financial reports generated by the accounting system. As a result, the Organization's internally prepared SEFA did not agree to the Organization's financial records. Prior Year Audit Finding: N/A Cause and Effect: The SEFA was prepared and reconciled to the amount of cash drawdowns for the year rather than total expenditures incurred for the year. This could result in a material misstatement in the SEFA. Context: This represents a systemic problem. Questioned Costs: None.Recommendation: The SEFA should be prepared and reconciled to the general ledger by an employee knowledgeable of the grant activity for the year. Someone other than the preparer should review the SEFA for accuracy and completeness to identify any errors and maintain proper internal controls over the preparation of the SEFA. Management?s Response: Management has hired an individual who specializes in federal programs who will be responsible for reviewing the SEFA in the future.

Corrective Action Plan

Audit Finding: The Schedule of Expenditures of Federal Awards (SEFA) is prepared using source information other than the financial reports generated by the accounting system. As a result, the Organization's internally prepared SEFA did not agree to the Organization's financial records. The SEFA was prepared and reconciled to the amount of cash drawdowns for the year rather than total expenditures incurred for the year. This could result in a material misstatement in the SEFA. Recommendation: The SEFA should be prepared and reconciled to the general ledger by an employee knowledgeable of the grant activity for the year. Someone other than the preparer should review the SEFA for accuracy and completeness to identify any errors and maintain proper internal controls over the preparation of the SEFA. Corrective Action Taken: Management has hired an individual who specializes in federal programs who will be responsible for reviewing the SEFA in the future. The CFO will also have the Senior Accountant review the SEFA for correctness prior to submission! Expected Completion Date: June 30, 2023

Categories

Reporting Cash Management

Other Findings in this Audit

  • 620862 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
10.558 Child and Adult Care Food Program $507,379
84.287 Twenty-First Century Community Learning Centers $399,335
21.019 Coronavirus Relief Fund $181,083
16.726 Juvenile Mentoring Program $63,000
21.027 Coronavirus State and Local Fiscal Recovery Funds $50,000