Finding Text
Finding Number 2023-003 – Inaccurate Schedule of Expenditures of Federal Awards
Criteria
Entities that receive federal grants or programs are required to know the source of all grants and awards as the requirements of the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Final Rule (Uniform Guidance). Entities must be able to document the key components of the schedule of expenditures of federal awards.Condition
The schedule of expenditures of federal awards provided by management was incomplete. It did not include all federal grants expended during the fiscal year and in some instances overstated the federal expenditures for certain grants.
Context
Management has all the information to complete the schedule of federal awards in compliance with the Uniform Guidance but had inaccuracies discovered during audit procedures. Federal expenditures of $1,560,441 were excluded from the schedule but were determined to have been reported as spent during the fiscal year. There were also $99,895 in federal expenditures reported for other grants that were determined to be overstated.
Cause
In most cases, management failed to add additional federal grants that were either new to the Corporation or had not had expenditures in the prior year.
Effect
The audit firm assisted with compiling all the necessary information to ensure the schedule of federal awards was complete and accurate. In addition, if the error in federal awards had not been discovered, the result could have been inaccurate reporting of federal expenditures.
Recommendation
We recommend management incorporate proper training and education on the information and amounts that must be outlined in the schedule of federal awards.
Management’s Response
Management will prepare the schedule of expenditures of federal awards as part of the year end closing process each year to determine their audit requirements under the Uniform Guidance and provide the schedule and all backup used to prepare it to the audit firm during the financial audit process.