Finding Text
Reference Number: 2022-003
Prior Year Finding: No
Federal Agency: U.S. Department of Homeland Security/FEMA
Pass-through Agency: Various
Federal Program: Emergency Food and Shelter National Board Program
ALN Number: 97.024
Compliance Requirement: OTHER - BASIS OF ACCOUNTING Type of Finding: Significant Deficiency, Noncompliance
Criteria or specific requirement:
Basis of Accounting —Uniform Guidance states the basis of accounting used may be a special purpose framework. However, it does state that the determination of when an award is expended must be based on when the activity related to the federal award occurs. Uniform Guidance also states for Grants, cost reimbursement contracts, cooperative agreements, and direct appropriation type of contracts, the federal expenditure or expense should be reported when the transaction occurs. Uniform Guidance further states, the auditee should also be able to reconcile amounts presented in the financial statements to related amounts in the schedule of expenditures of federal awards.
Condition:
Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division report to the pass-through entity on an accrual basis. Division’s schedule of expenditures of federal awards is presented on the accrual basis of accounting. Of the Sixty (60) files selected for testing:
• Five (5) prior year expenditures were included in Division’s current year schedule of expenditures of federal awards.
Cause:
Division did not ensure that all program expenditures were reported in the correct year in the Division’s schedule of expenditures of federal awards.
Effect:
Division’s schedule of expenditures of federal awards was not reconciled with the current year program expenditures recorded in the financial statements.
Questioned costs:
Cannot be determined.
Recommendation:
We recommend Division report program expenditures in the year expenditures were accrued.
Views of responsible officials:
The Division will report program expenditures in the year expenditures were accrued.
See corrective action plan.