Finding Text
2023-003: Significant Deficiency and Noncompliance: Cut-off Errors in Preparing the SEFA
U.S. Department of Education
Education Stabilization Fund
Passed through State of Iowa Department of Education
Federal Assistance Listing Number (ALN): 84.425D, 84.425U, 84.425W
Federal Award Year: 2023
U.S. Department of Agriculture
Child Nutrition Cluster
Passed through State of Iowa Department of Agriculture and State of Iowa Department of Education
Federal Assistance Listing Number (ALN): 10.553, 10.555, 10.559, 10.582
Federal Award Year: 2023
Finding: The District reported expenditures on the fiscal year 2023 schedule of expenditures of federal awards (“SEFA”) that were incurred in other fiscal years.
Criteria: The schedule of expenditures of federal awards is required to be prepared on a basis consistent with the financial statements. Expenditures of federal awards are to be reported on the modified accrual basis of accounting and should be reported on the SEFA when incurred.
Condition: Seven invoices which were either received late (after the preparation of the fiscal year 2022 SEFA) or paid early (prior to the recognition of the expense in fiscal year 2024) were reported on the fiscal year 2023 SEFA as expenditures in the current year. Therefore, they were not reported on the SEFA in a manner consistent with the fiscal year in which they were recognized as expenditures in the financial statements. This resulted in $58,308 of allowable costs reported on the fiscal year 2023 SEFA which were incurred in subsequent fiscal years. Specifically for the Education Stabilization Fund, there was $55,968 in costs reported in 2023 that should have been recognized in the fiscal year 2024 SEFA. For the Child Nutrition Cluster, there was $2,340 in costs that should have been recognized in the fiscal year 2024 SEFA. This also resulted in $42,366 of allowable costs reported on the 2023 SEFA for the Education Stabilization Fund that should have been recognized in the fiscal year 2022 SEFA.
Cause: Inadequate reviews were in place to ensure that only fiscal year 2023 expenditures were reported on the SEFA.
(Continued)
Effect or potential effect: Inaccurate reporting of expenses can result in actions taken by oversight agencies, which could impact future funding.
Questioned costs: None.
Context: For 7 of the 65 invoices tested, the District reported either fiscal year 2022 or fiscal year 2024 expenditures on the fiscal year 2023 SEFA.
Identification as a repeat finding, if applicable: Not a repeat finding.
Recommendation: We recommend the District implement procedures to ensure proper cut-off is achieved in reporting expenditures on the SEFA.
Views of responsible officials: Management agrees with the finding.