Finding Text
2023-002 Material Weakness – Preparation of Schedule of Expenditures of Federal and State Awards (“SEFSA”) Statement
Condition: Under Uniform Guidance 2 CFR Section 200.508 reporting compliance, it is the auditee’s responsibility to prepare the Schedule of Expenditures of Federal and State Awards statement. The Uniform Guidance 2 CFR Section 200.502 requires the proper tracking and accounting of federal expenditures incurred under the same basis of accounting as the basic financial statements to ensure proper cut-off and timely reporting to the Federal Audit Clearinghouse.
Criteria: Procedures should be in place to create a materially accurate Schedule of Expenditures of Federal and State awards statement based on the cash basis of accounting specifically tracking expenses when they are paid.
Cause: The procedures in place did not create a materially accurate Schedule of Expenditures of Federal and State awards financial statement for major program compliance. For CFDA #66.458, the SEFSA provided by the Authority did not represent expenditures as paid. This was a result of the bifurcation between loan and grant disbursements, as well as presentation of loan balances on the SEFSA. Uniform Guidance states that SEFSA loan balances should be reported as prior year outstanding loan balance plus current year borrowings.
Effect: The fund used to track the expenditures did not properly reflect the federal expenditures incurred in 2023.
Recommendation: Procedures should be implemented to create a materially accurate Schedule of Expenditures of Federal and State award financial statement, which should include ascertaining between loan and grant expenditures, and understanding the process for reporting loan balances on the SEFSA.
Views of Responsible Officials and Planned Corrective Actions: In order to create a materially accurate Schedule of Expenditures of Federal and State award financial statement, the Authority will establish procedures to ascertain loan and grant expenditures, as well as taking into account the Uniform Guidance requirement for presenting loan balances on the SEFSA.