Finding Text
2023-001 Implement System-Based Tracking of Federal Expenditures
Assistance Listing Number: 93.566
Assistance Listing Program Title: Refugee and Entrant Assistance – State - Administered Programs
Federal Agency: Department of Health and Human Services (HHS)
Passed Through Entities:
1. California Department of Social Services
2. University of California, San Diego
3. California Rural Legal Assistance Foundation
4. San Diego Refugee Communities Coalition/United Women of East Africa Support Team
Federal Award Numbers: ALSP22-0002-A1, PUR00533092, ALSP22-0001, and ACS22-05-CAIR-A1
Federal Award Year: 8/1/2022 to 3/31/2025
Compliance Requirement: Activities Allowed or Unallowed
Criteria:
Management is responsible for designing, implementing, and maintaining an internal control system that ensures accurate financial reporting. Effective internal control over financial reporting provides reasonable assurance regarding the completeness and accuracy of accounting records, and compliance with grantor requirements.
2 CFR 200.510 Financial Statements require auditees to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee's financial statements. This schedule must include the total Federal awards expended, as determined in accordance with 2 CFR 200.502. The information presented should be consistent with the accounting records (i.e., general ledger).
In addition, Section 2 CFR 200.302(b)(1) provides that non-Federal entities must maintain effective control over and accountability for all funds, and must identify, in their accounts, all Federal awards received and expended.
Condition:
During our review of the SEFA, we noted that CAIR-CA currently utilizes workbooks outside of its accounting software to track federal expenditures. The external workbooks do not reconcile directly with the general ledger (GL) requiring management to prepare a separate reconciliation to support the SEFA amounts.
Cause:
This year marks CAIR-CA’s first Single Audit. As such, processes and internal controls over federal award tracking are still under development. The current system is not yet fully integrated to allow for automated or system-based tracking of federal expenditures by grant.
Effect:
Relying on manual workbooks to track federal expenditures can be inefficient and may result in inaccurate or incomplete reporting of federal expenditures.
Questioned Cost: None
Recommendation:
We recommend that CAIR-CA enhance its accounting processes to enable the tracking of federal expenditures directly within its accounting software. This can be accomplished by implementing
GL tracking codes or tags specifically designated for federal expenditures. Transitioning to a system based tracking approach will support consistency between the general ledger and the SEFA, simplify the process of generating financial reports, and improve the tracking of federal expenditures.
Views of Responsible Officials and Corrective Action Plan:
Management concurs with the finding and is currently in the process of updating the accounting system to incorporate grant-specific specific tracking codes to further align with federal reporting standards. As part of a layered approach to internal controls, Excel worksheets will continue to be used as a supplementary monitoring tool, providing an additional cross-check to the system-generated reports.
Responsible person: Jackie Ramirez, Operations & Finance Associate Director
Expected Implementation date: November 20, 2025