Finding Text
2022-001 Improve Internal Controls over the Preparation of the Schedule of Expenditures of Federal Awards (SEFA)
Federal Program(s) Information
Cluster/Program: All federal programs
Type of Finding
Compliance
Internal Control over Compliance – Significant Deficiency
Criteria or Specific Requirement
The County is required to prepare a SEFA in accordance with the prescribed guidelines of the Uniform Guidance.
Condition and Context
The County did not properly report a net impact of $580,474 in expenditures on the SEFA. As a result of the initial improper expenditure amounts included, the auditors’ assessment over major program determination was impacted.
Cause
The County did not have adequate controls in place in order to properly report federal expenditures.
Effect or Potential Effect
Due to the weakness in internal controls noted above, there is a risk that amounts reported on the SEFA are not complete and accurate. The lack of a complete and accurate SEFA may impact the determination of if a single audit is required, as well as major program determination. Misstating expenditures on the SEFA results in the County being out of compliance with the requirements set forth in the underlying grant agreements and the Uniform Guidance.
Recommendation
The County should ensure that adequate procedures and controls are in place to ensure that the SEFA is complete and accurate. These controls should include controls requiring the reconciliation of federal expenditures to the appropriate supporting documentation (e.g., general ledger, grant reports, etc.).
Views of Responsible Official and Planned Corrective Action
Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.