Finding Text
Assistance Listing Number: 10.553, 10.555, 10.559 – Child Nutrition Cluster
Pass-through Entity: Michigan Department of Education
Finding Type: Material weakness in internal controls over compliance.
Repeat Finding: No
Criteria: 2CFR 200.510(b) requires organizations to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements, which must include the total of federal awards as determined in accordance with 2 CFR 200.502.
Condition: The original SEFA provided by the School District was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management’s attention.
Questioned Costs: None
Cause: Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate.
Effect: The School District accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the School District to the audit team included several inaccuracies, including missing or incomplete expenditure amounts. The SEFA most significantly included the following inaccuracies:
- $18,063 spent under ALN 10.553 (National School Breakfast Program) was improperly excluded from the SEFA.
- $41,653 spent under ALN 10.555 (National School Lunch Program) was improperly excluded from the SEFA.
Recommendation: The School District’s process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (the SEFA should reconcile to the federal revenues recorded), and appropriate workpapers are prepared to support the SEFA balances.
View of Responsible Officials: Management agrees with the finding and will implement procedures to ensure the SEFA is prepared accurately in the future.