Finding Text
Criteria: Per 2 CFR § 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The SEFA must be complete and accurate and include the total federal awards expended, the Assistance Listing Numbers (ALNs), the name of the federal agency, and any amounts provided to subrecipients.
Condition: The SEFA was not prepared as prescribed by 2CFR Part 200.510(b) of the Uniform Guidance. The Parish did not have adequate internal controls in place to ensure the accurate and complete preparation of the SEFA. Specifically, the federal expenditure data provided for audit omitted multiple federal awards, contained inaccuracies in reported expenditures for multiple programs, did not allocate the federal and local cost share accurately, and amounts reported did not adequately trace back to the Parish’s financial reporting system.
Cause: The deficiencies were caused by a lack of updated formal policies and procedures for gathering and reconciling federal expenditures across departments. Additionally, there was insufficient review by management to ensure the completeness and accuracy of the SEFA. The Parish experienced turnover in several departments, including the finance director/chief financial officer position in 2024. During the time of the transition, there were various accounting issues identified that required a significant amount of time and resources to address. Parish administration and management were immediately tasked with enhancing operations related to procedural concerns from the prior administration and performing the accounting function without sufficient documentation on several balances and transactions.
Effect: As a result, the Parish provided incomplete and inaccurate data when preparing the SEFA which resulted in the Parish excluding federal awards and misstating expenditures and being noncompliant with federal reporting requirements. These errors required material adjustments to be made during the audit process, increasing the risk of misreporting to oversight agencies.
Recommendation: We recommend that the Parish enhance policies and procedures over financial reporting and preparation of the SEFA so that duties are well defined, and responsibilities are properly outlined to assist periods of transition or turnover of key employees, as well as identifying and correcting errors on a more frequent basis through a monthly reconciliation process for all material and/or significant account balances. Additionally, we recommend that all journal entries proposed are reviewed and approved by the chief financial officer or designee.