Finding Text
2022-004 - Strengthen SEFA Preparation and Performance Reporting Compliance
Program Name/ Assistance Listing Number: 93.788
Federal Agency: U.S. Department of Health and Human Services
Federal Award Identification: Unknown
Applicable Pass-through Entity: Ohio Department of Mental Health and Addiction Services
(Ohio MHAS)
Type of Findings: Significant Deficiencies and Material Weakness
Compliance Requirement: Reporting
Criteria: Effective grant management requires accurate financial and performance reporting,
supported by strong internal controls to ensure compliance with federal regulations. The Schedule
of Expenditures of Federal Awards (SEFA) must be complete, accurate, and aligned with grant
agreements and accounting records, as it determines major program selection in the Single Audit.
Performance reports should be consistent with supporting records to meet federal grant
requirements and demonstrate compliance.
Condition: Our audit identified opportunities to improve SEFA preparation and performance
reporting to enhance accuracy, compliance, and efficiency.
1. SEFA Preparation-The SEFA required multiple revisions due to inaccuracies, including
misaligned grant period dates, incorrect pass-through entity numbers, and errors in contract
details for SAMHSA and SOR grants. Non-federal awards were mistakenly included, and
expenditure totals for SOR contracts 2200648 and 230052 were miscalculated.
2. Performance Reporting- Performance reports contained inconsistencies with supporting
documentation, discrepancies in reported outcomes versus internal records, and required
performance measures for federal reporting were not always documented.
Cause: SEFA preparation may not follow a structured review process, and additional training may
be beneficial to ensure accurate reporting. Performance reporting processes may lack sufficient
internal validation steps, leading to discrepancies in reported outcomes. Furthermore, documentation
and internal control procedures may need enhancement to ensure consistency and transparency in
financial and performance reporting.
Potential Effect: The following are the potential effects of the condition:
Compliance Risks – Errors in SEFA and performance reporting could affect program
selection, compliance testing, and overall federal compliance.
Audit & Operational Delays – Revisions and missing documentation can cause delays in the
Single Audit, impacting financial reporting timelines.
Funding & Reputational Considerations – Inconsistent financial and performance reporting
may raise concerns with funding agencies, affecting grant renewals and external stakeholder
confidence.
Increased Administrative Burden – A lack of structured processes may increase the workload
for finance staff, making grant reporting and performance tracking less efficient.
Questioned Cost: Not quantifiable.
Context: Our review covered the fiscal year ending December 31, 2022, and focused on transactions
related to SOR grant programs administered through the Ohio Department of Mental Health and
Addiction Services. During the audit, the SEFA underwent three revisions before being finalized.
Additionally, we noted the following concerns:
Timely Access to Supporting Documentation – Documentation to verify SEFA information
was not readily available, which delayed the validation process.
Performance Reporting Discrepancies – Performance reports submitted for federal
compliance did not always match internal tracking records, indicating a need for improved
validation.
Recommendation: To strengthen financial reporting and compliance, we recommend the following
actionable and achievable steps:
1. Establish a Structured SEFA Review Process
Implement a two-step validation process before finalizing SEFA to ensure all information
aligns with grant agreements and financial records.
Assign a secondary reviewer (e.g., a senior accountant or compliance officer) to verify grant
period dates, pass-through numbers, and award classifications.
Use a grant reporting checklist to confirm all key reporting elements before submission.
2. Strengthen Performance Reporting Accuracy
Establish a review process to validate performance reports against internal program data
before submission.
Develop standardized templates and reporting procedures to ensure consistency and
completeness.
Implement training for program staff to enhance understanding of performance reporting
requirements.
3. Provide Targeted Training for Key Staff
Offer Continuing Professional Education (CPE) courses focused on Single Audit
requirements and federal grant reporting best practices.
Conduct internal training for finance and program personnel to strengthen their
understanding of federal compliance expectations.
4. Utilize Technology to Enhance Accuracy
Leverage existing accounting software to improve SEFA accuracy.
Implement automated grant tracking tools to reduce manual errors and improve efficiency.
Utilize performance tracking software to enhance reporting accuracy.
5. Strengthen Internal Controls and Documentation.
Develop and document clear policies and procedures for SEFA preparation and performance
reporting.
Maintain an organized grant documentation repository to ensure supporting records are easily
accessible.
Conduct periodic internal reviews to ensure ongoing compliance and process improvement.
Views of Responsible Official: RSNEO agrees with the findings and will adhere to the corrective
action plan outlined.