Finding Text
Finding 2023-002 Schedule of Expenditures of Federal Awards Preparation
Type of Finding:
Significant Deficiency over Financial Reporting.
Criteria:
Federal regulations and GAAP require the preparation of a comprehensive and accurate Schedule of Expenditures of Federal Awards ("SEFA"), which includes transparent disclosure of federal funds expended, including the source of funds, program titles, award numbers, and expenditure amounts.
Condition:
This year’s audit revealed significant improvements in the Organization’s SEFA preparation. The SEFA now more accurately reflects federal awards received and expended, and there have been enhancements in documenting award numbers, funding sources, and program titles. However, some inaccuracies and omissions persist, impacting the completeness and reliability of the SEFA.
Cause:
Ongoing gaps in the skills, knowledge, and experience of personnel responsible for SEFA preparation and reporting contribute to the persistence of some inaccuracies. Continued deficiencies in training and procedural adherence are factors in these issues.
Possible or Known Effect:
While improvements have mitigated the risk of misrepresentation, the remaining discrepancies could still lead to misinterpretation of federal funds received and expended. This could affect the Organization’s compliance with federal reporting requirements and potentially impact eligibility for future federal funding.
Questioned Costs:
There were no questioned costs identified.
Repeat Finding:
This finding is a repeat from the prior year. The previous finding number was 2022-002.
Recommendation:
Management should continue to build on recent improvements by further refining SEFA preparation processes. Enhanced controls should be implemented to ensure complete and accurate recording of federal awards and expenditures. Ongoing training for financial reporting personnel should be sustained, addressing remaining knowledge gaps and procedural issues. Documented procedures should be reviewed and updated regularly to ensure adherence to best practices and continuous improvement in SEFA preparation.
Views of Responsible Officials:
The Organizations’ Board and Executive Team consisting of the Chief Executive Officer (CEO) and the Chief Operating Officer (COO) and key Overdose Lifeline (ODL) Staff to include the independent bookkeeper and Grant and Finance Manager recognize the need to further refine the SEFA preparation process. This will be accomplished through the completion of a formal course that covers performing a single audit and consultation with the Independent Public Accounting Firm (Pile CPAs).