Finding Text
Assistance Listing Numbers: 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants), 20.507 Federal Transit – Formula Grants (Urbanized Area Formula), 20.525 State of Good Repair Grants, 20.505 Metropolitan Transportation Planning Grants, and 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities
Federal Agency – Department of Transportation
Finding Type: Significant Deficiency and Non-Compliance
Condition
During the audit, it was found that the auditee incorrectly classified the following:
• Assistance Listing Number 20.500 Capital Investment Grants (Fixed Guideway Capital Investment Grants) – Management reported $2,455,795 as federal awards expended instead of $1,589,748, which were the amounts validated by the auditors.
• Assistance Listing Number 20.507 Federal Transit – Formula Grants (Urbanized Area Formula) – Management reported $25,222,452 as federal awards expended instead of $21,372,923, which were the amounts validated by the auditors.
• Assistance Listing Number 20.525 State of Good Repair Grants – Management did not report federal awards expended instead of $4,715,576, which was the amount validated by the auditors.
• Assistance Listing Number 20.505 Metropolitan Transportation Planning Grants – Management reported $2,279,469 as federal awards expended instead of $2,210,082, which were the amounts validated by the auditors.
• Assistance Listing Number 20.513 Enhanced Mobility of Seniors and Individuals with Disabilities – Management reported $15,848.93 as federal awards expended instead of $14,912.93, which were the amounts validated by the auditors.
Criteria
Under 2 CFR 200.510(b), auditees are required to prepare a Schedule of Expenditures of Federal Awards (SEFA) and must include accurate information about expenditures for each federal program, including the correct Assistance Listing number. In addition, the auditee must provide total Federal awards expended for each individual Federal program and the Assistance Listings Number or other identifying number when the Assistance Listings information is not available.
Cause
The misclassification appears to have resulted from a misunderstanding of the program guidelines and a lack of adequate internal controls to ensure the accurate reporting of federal expenditures.
Effect
This misclassification could result in noncompliance with federal regulations and may impact the federal agency's ability to accurately monitor and allocate funding. Furthermore, it may lead to incorrect conclusions about the auditee's compliance with specific program requirements.
Questioned Costs
None
Recommendation
It is recommended that the auditee:
• Review and revise its procedures for classifying federal expenditures to ensure accurate alignment with assistance listing numbers.
• Implement additional training for staff responsible for preparing the SEFA.
• Conduct a thorough review of all federal program expenditures for the current and previous years to identify and correct any similar misclassifications.