Finding Text
Finding 2023-004: Schedule of Expenditures of Federal Awards Presentation
Information on the Federal Program: 97.024 - Emergency Food and Shelter National Board
Program
Type of Finding: Material Weakness in Internal Control over Compliance
Criteria: Management is responsible for the complete and fair presentation of the financial statements,
including any supplementary information that is presented in relation to the financial statements, such
as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section
200.510 (b)(2), SAMU is required to include only direct and pass-through Federal awards expended
during the fiscal year in the SEFA.
Condition: During our audit fieldwork, we noted that the SEFA included expenditures of $4,563,468
that were related to State awards and should not have been included on the SEFA. In addition, we
noted that the SEFA included conditional awards that had not yet been earned in the amount of
$3,485,473. As a result, an adjustment to the amounts reported on the SEFA was proposed, and
accepted by management, to decrease current year expenditures reported on the SEFA by
$8,077,689.
Cause: SAMU began receiving diversified funding streams for the first time during the year ended
December 31, 2023. The misstatements appear to be due to a misunderstanding of what should be
included on the SEFA and how support should be recognized and recorded on conditional awards in
accordance with ASC 958.
Effect or Potential Effect: The SEFA was overstated by $8,077,689. When the SEFA is not prepared
properly, it could have an effect on the auditor's determination of major programs or the auditor's
sample selections.
Questioned Costs: None.
Identification of a Repeat Finding: Not applicable.
Context: The SEFA prepared by SAMU was not representative of actual Federal expenditures that
were incurred during the year ended December 31, 2023.
Recommendation: We recommend that SAMU ensure it has an understanding of what expenditures
are to be presented on the SEFA, particularly in connection with conditional awards, in accordance with
2 CFR § 200.