Finding Text
2022-002 ? Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards) Information on the Federal Program: U.S. Small Business Administration Assistance Listing Number: 59.008 Assistance Listing Name: Economic Injury Disaster Loan Criteria ? The Code of Federal Regulation (CFR) Section ?200.510(b) states in part: ?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 as determined in accordance with CFR Section ?200.502 Basis for determining Federal awards expended.? The schedule must provide total Federal awards expended for each individual Federal program. In accordance with ?200.302 Financial Management, a non-federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system of each non-Federal entity must provide for the following: (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in ?200.328 Financial Reporting and ?200.329 Monitoring and Reporting Program Performance. (3) Records that identify adequately the source and application of funds for federally funded activities. (4) Effective control over, and accountability for, all funds, property, and other assets. Condition ? During the year ended August 31, 2022, the Center received additional EIDL funds. Prior to the COVID-19 pandemic, the Center did not receive and spend federal dollars in excess of the limit that required a single audit to be performed. Due to the lack of expertise surrounding the preparation of the SEFA and the non-recurring nature of the COVID-19 pandemic relief funding provided by the federal government, the Center was uncertain of some of the specifics on the SEFA statement. Cause ? The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year. Effect ? Management was unaware that the EIDL was a federal award requiring a single audit prior to discussion with the auditors. Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our testing of the Center?s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above. Repeat Finding: This is not a repeat finding. Recommendation ? We recommend management attend Federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the Federal funds are reported accurately on the SEFA and that programs are reported under the correct assistance listing number. Views of Responsible Officials ? Beck Center for the Arts concurs with the finding and the recommendation. The Center will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. The Center?s corrective action plan is described in Managements Corrective Action Plan included at page 42 of this reporting package.