Finding Text
Finding 2022-003 Inaccurate SEFA – Reporting – Material Weakness
Name of Federal Agency: U.S Department of Housing and Urban Development
Federal Program Name: HOME Investments Partnership Program and CDBG Entitlement Grants
Cluster
Assistance Listing Number: 14.239 and 14.218
Federal Award Identification Number and Year: Identification number unavailable. Program years
2010, 2012, 2015, 2019, 2020, 2022.
Name of Pass-through Entity (if applicable): Rhode Island Housing and Mortgage Finance
Corporation and the City of Providence, Rhode Island.
Criteria: In accordance with 2 CFR 200.302 (Financial Management), a grant recipient’s financial
management system must be sufficient to permit the preparation of reports required by general and
program-specific terms and conditions; the tracing of funds to a level of expenditures adequate to
establish that such funds have been used according to the federal statutes, regulations, and the terms
and conditions of the federal award.
In addition, 2 CFR 200.510 (Financial Statements), states in part that the auditee must prepare a
schedule of expenditures of Federal awards (“SEFA”) for the period covered by the auditee's financial
statements which must include the total Federal awards expended as determined in accordance with
2CFR 200.502. At a minimum, the schedule must include:
-All individual Federal programs by Federal agency.
-For Federal awards received as a subrecipient, the name of the pass-through entity and
identifying number assigned by the pass-through entity must be included.
-Provide total Federal awards expended for each individual Federal program and the
Assistance Listings Number or other identifying number when the Assistance Listings
information is not available.
-Include the total amount provided to subrecipients from each Federal program.
Condition / Context: The Organization management’s review and approval process did not detect the
errors that were identified during the audit procedures performed. The errors detected consisted of
the understatement of Federal Assistance Listing Numbers 14.239 and 14.218 in the amounts of
$1,260,748 and $295,000, respectively, for a total understatement of $1,555,748.
Cause: The Organization’s internal controls over the preparation and review of the SEFA were not
operating effectively. Material audit adjustments were proposed during the course of the audit that
lead to material changes to the SEFA.
Effect or Potential Effect: Inadequate controls over the preparation of the SEFA could result in
financial misstatements or potential noncompliance.
Questioned Costs: None
Identification as a Repeat Finding: This is not a repeat finding.
Recommendation: We recommend the Organization strengthen its policies, procedures, and controls
for the identification of federal awards to ensure a complete and accurate SEFA is prepared in a
timely manner.
Views of Responsible Officials: Management agrees with the finding and is in the process of revising
internal controls to address SEFA preparation.