Finding Text
Assistance Listing, Federal Agency, and Program Name 66.818, U.S. Environmental Protection Agency, Brownfields Assessment and Cleanup Cooperative Agreements; 14.218, U.S. Department of Housing and Urban Development, CDBG Entitlement Grants Cluster Community Development Block Grant
Federal Award Identification Number and Year N/A
Pass through Entity ALN 14.218 Wayne County
Finding Type Material weakness
Repeat Finding Yes
2022 002
Criteria The Single Audit Act and Uniform Guidance require a nonfederal entity that expends $750,000 or more of federal awards in a fiscal year to have a single or program specific audit. 2 CFR §200.508 (b) indicates that the auditee must prepare financial statements, including the schedule of expenditures of Federal awards in accordance with 2 CFR §200.510. Additionally, 2 CFR §200.502 describes the basis for determining the timing of when federal awards are deemed expended and, therefore, reportable on the schedule.
Condition The schedule of expenditures of federal awards (SEFA) was not accurate.
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A
Context During the fiscal year ended September 30, 2023, the City expended approximately $921,000 of federal funding. The initial draft of the SEFA included the following inaccuracies:
ALN 66.818 The expenditures reported on the SEFA were understated by $689,255.
ALN 14.218 The expenditures reported on the SEFA were understated by $55,192.
The errors noted above have been corrected on the SEFA as of September 30, 2023.
Cause and Effect Controls in place did not ensure the SEFA was complete and accurate for the fiscal period under audit. The errors resulted in the understatement of federal expenditures. Additionally, the understatement of federal expenditures on the SEFA resulted in the incorrect conclusion that federal activity was below $750,000 and, therefore, a single audit was not needed.
Recommendation We recommend the City implement a process to ensure that the SEFA is complete and accurate.
Views of Responsible Officials and Corrective Action Plan The City will review its process for identifying and communicating Federal Grant expenditures to its auditors.