Finding Text
Finding: 2023-003
CFDA Number: 21.027
Program Name: Coronavirus State and Local Fiscal Recovery Funds
Federal Agency: Department of Treasury/Department of Housing and Community
Development
Type of Finding: Federal Award Finding
Compliance Requirement: Reporting
Questioned Costs: N/A
Criteria
According to 2 CFR 200.510(b), the auditee must prepare a SEFA that includes all federal awards
expended, listed by federal program and Assistance Listings Number, along with the total amount
provided to subrecipients. The SEFA must also include notes that describe the significant accounting
policies used in preparing the schedule. The expenditures must be reported on the same basis of
accounting as the auditee’s financial statements.
Condition
During our audit of the Friends of the Mission's SEFA for the fiscal year ended December 31, 2023, we
noted that the SEFA did not accurately report the total federal awards expended for the Department of
Treasury, Assistance Listings Number 21.027. The SEFA understated expenditures by $612,964 from
the Homekey Program.
Cause
The auditee’s internal controls over the preparation of the SEFA were not sufficient to ensure all federal
expenditures were accurately identified and reported. Additionally, staff responsible for SEFA preparation
were not fully trained on the requirements of 2 CFR 200.510(b).
Effect:
The inaccurate reporting of federal expenditures in the SEFA could lead to noncompliance with federal
award requirements, misstatements in the single audit report, and potential delays or errors in the
submission of the data collection form to the Federal Audit Clearinghouse. This may also impact the
auditee’s ability to demonstrate compliance with federal regulations.
Recommendations:
We recommend that Friends of the Mission implement the following corrective actions:
1. Develop and document a formal process for preparing the SEFA, including procedures to identify
and track all federal awards.
2. Provide training to staff responsible for SEFA preparation on the requirements of 2 CFR
200.510(b).
3. Implement a review process to ensure the SEFA is complete, accurate, and consistent with the
auditee’s financial statements prior to submission.
4. Reconcile the SEFA with the general ledger and federal award records to ensure all expenditures
are properly reported.
Management's Response
Management is aware of the finding and has taken steps to rectify the finding so that it does not repeat in
future years.