Finding Text
Section III ? Findings and Questioned Costs for Major Federal Awards 2022-002 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards (Material Weakness ? All Awards) Criteria ? 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, #200.508 (b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with #200.510, Financial Statements. Condition and Context ? The following errors were noted and corrected as a result of auditing procedures on the SEFA: * All funds for WIC were listed under agreement CD4-21-4655B. A significant amount of these funds was provided under agreement CD4-22-4655. * TANF expenditures were understated by $12,215. * TANF was incorrectly identified as part of a cluster. * ERA funds were reported as being funded through US DHHS. * Head Start was not identified as being part of a cluster. * CACFP expenditures were understated by $35,656. * CACFP expenditures were listed as being passed though ME DHHS. This agreement is through ME DOE (education). * WIC expenditures were understated by $179,782. * Several COVID-19 programs did not include the appropriate prefix. Cause ? Insufficient internal controls over the preparation, review, and documentation process for the SEFA. Effect ? Errors on reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. The above corrections would have led to the SEFA being materially misstated. They would also lead to findings and corrective action with funders. Questioned Costs ? None Recommendations ? Management should seek additional training for the fiscal department on preparation of the SEFA standards. In addition, review processes over the SEFA should be strengthened. Both the preparer and reviewer should have a clear understanding of the required minimum elements. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, reporting, and the trial balance. Any inconsistencies should be resolved before beginning the audit. Management?s records should require the identification of the preparer and reviewer as well as the dates each of those tasks were performed. Management could consider requiring a preparation and review process checklist as required documentation for the Organization?s reporting records to help ensure key processes are performed and reviewed. Views of Responsible Officials and Planned Corrective Actions ? The Director of Fiscal will seek additional training on the preparation of the SEFA schedule provided to auditors for new staff to participate in. Before submission to auditors there will be a check and review process in which the Fiscal Director or delegate will review the schedule and initial for a backup copy. All back up documentation will be provided during the submission so review by auditors will be clearer. For this review to take place there will be an internal review and check list provided.