Finding Text
Finding 2024-001--Reporting of the Schedule of Expenditure of Federal Awards
Federal Agency: U.S. Department of Health and Human Services
Federal Program: ALN 93.323 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) – Passed through Health Research, Inc.
Grant Period: Year ended April 30, 2024
Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards
Condition: The Organization’s internal controls did not identify amounts expended under the ELC program as federal expenditures. The related grant was inadvertently identified as a state grant and was initially excluded from the schedule of expenditures of federal awards (SEFA). As a result, the Organization should have reported ELC expenditures totaling $1,167,015 on the SEFA for the year ended April 30, 2024.
Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the recipient’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502.
In addition, 2 CFR 200.303 requires non-Federal entities receiving federal awards to establish and maintain internal controls designated to reasonably ensure compliance with federal laws, regulations and program compliance. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA.
Cause: The grant was originally coded as a state grant was overlooked when management prepared the SEFA.
Effect: The SEFA was understated by $1,167,015. In addition, the inaccurate preparation of the SEFA may prevent the Organization from completing an audit in accordance with the timelines established in the Uniform Guidance.
Questioned Costs: Not applicable
Statistical Sampling: Not appliable
Repeat Finding: No
Recommendation: We recommend that the Organization implement additional processes and procedures to ensure that the SEFA is complete and accurate.
Views of Responsible Officials: We agree with the finding noted above. Although the grant income was federally sourced, our contract was with a state department and was classified as such in our books and records. As soon as the error was realized, we notified the auditors so the necessary corrections could be made. This incident is isolated and not recurring. The grant for which this finding is associated was a temporary grant that has since ended.
To prevent future errors from occurring, all new contracts will be reviewed prior to submitting the summary of federal awards to the auditor to ensure that any federally sourced funding is properly identified regardless of grantor. CARES of NY, Inc. will implement a check and balance procedure where the grants director will review the listing prior to audit submission for accuracy.