Finding Text
FINDING 2023-001
Program Information: Substance Abuse and Mental Health Services Projects (ALN #93.243)
COVID-19 Education Stabilization Fund (ALN #84.425C)
Criteria or Specific Requirement (Including Statutory, Regulatory
or Other Citation): L. Reporting - The auditee must prepare a schedule of expenditures of Federal awards (the “SEFA”) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 Basis for determining Federal awards expended. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For Research and Development (“R&D”), total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the passthrough entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the Assistance Listing number or other identifying number when the Assistance Listing information is not available. For a cluster of programs also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in 2 CFR 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in 2 CFR 200.414.
FINDING 2023-001
Program Information: Substance Abuse and Mental Health Services Projects (ALN #93.243)
COVID-19 Education Stabilization Fund (ALN #84.425C)
Criteria or Specific Requirement (Including Statutory, Regulatory
or Other Citation): L. Reporting - The auditee must prepare a schedule of expenditures of Federal awards (the “SEFA”) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502 Basis for determining Federal awards expended. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For Research and Development (“R&D”), total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. (2) For Federal awards received as a subrecipient, the name of the passthrough entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the Assistance Listing number or other identifying number when the Assistance Listing information is not available. For a cluster of programs also provide the total for the cluster. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in 2 CFR 200.502(b), identify in the notes to the schedule the balances outstanding at the end of the audit period. This is in addition to including the total Federal awards expended for loan or loan guarantee programs in the schedule. (6) Include notes that describe that significant accounting policies used in preparing the schedule and note whether or not the auditee elected to use the 10% de minimis cost rate as covered in 2 CFR 200.414.
Condition: The SEFA, as prepared by management erroneously included expenditures previously incurred and reported in fiscal year 2022, resulting in an overstatement of $7,875 for the Substance Abuse and Mental Health Service Project. Additionally, COVID-19 Education Stabilization Fund expenditures were not complete, resulting in an understatement of $6,000 for the COVID-19 Education Stabilization Fund.
Cause: Administrative oversight with respect to preparation of the SEFA.
Effect or Potential Effect: The original draft SEFA was overstated.
Questioned Costs: None
Context: Due to an error in disbursing grant funds to an incorrect local club in fiscal year 2022, the Alliance attempted to correct this mistake by disbursing additional funds to the correct club in fiscal year 2023. The Alliance included the remedied disbursement on the 2023 SEFA, which resulted in a $7,875 overstatement of expenditures that had already been incurred and reported on the 2022 SEFA. The omission of costs allocated to the COVID-19 Education Stabilization Fund resulted in expenditures being understated by $6,000.
Identification as a Repeat Finding: No similar findings noted in the prior year.
Recommendation: We recommend that the Alliance enhance its procedures and internal controls with respect to preparation and review of the SEFA.
Views of Responsible Officials and Planned Corrective Actions: Management will enhance procedures and internal controls with respect to the preparation and review of the SEFA, by reviewing the detail of expenses included in the prior year SEFA with current year expenses, to prevent duplicate entries being reported.