Finding Text
Finding 2022-004
Compliance Requirement: Internal Control over Compliance and Compliance with Reporting (Preparation of Schedule of Expenditures of Federal Awards)
Prior Year Finding Number: N/A
Program:
ALN 14.267 U.S. Department of Housing and Urban Development – Continuum of Care Program
ALN 16.575 U.S. Department of Justice – Victims of Crime Acts Program
ALN 21.027 U.S. Department of Treasury – Victims of Crime Acts Program
Criteria - The Code of Federal Regulation (CFR) Section 200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section 200.502. Basis for determining Federal awards expended.” The SEFA must provide total federal awards expended for each individual Federal program.
In accordance with Section 200.302 Financial Management, a non-federal entity’s financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award.
The financial management system of each non-Federal entity must provide for the following:
(1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received.
(2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in Section 200.328 Financial Reporting and Section 200.329 Monitoring and Reporting Program Performance.
(3) Records that identify adequately the source and application of funds for federally funded activities.
(4) Effective control over, and accountability for, all funds, property, and other assets.
Condition – The SEFA as prepared by management did not originally include one federal grant with federal expenditures during the year and one grant for which the Assistance Listing Number (ALN) did not match the
grant documents.
Cause - The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed due to new funding received in the current year.
Effect – The original SEFA was incomplete.
Questioned Costs: None. Context: The conditions outlined above are based on our testing of the Organization’s major program and our overall testing of the accuracy of the SEFA. The nature of this findings is detailed in the condition section above.
Recommendation- We recommend management attend federal award trainings and information to ensure the documented policies and procedures can be performed as described. This will ensure the federal funds are reported accurately on the SEFA and that programs are reported under the correct ALN.
Views of Responsible Officials – The Organization concurs with the auditor’s findings and recommendations. The Organization will continue to review federal award guidance and requirements to ensure compliance with current and future federal awards. Refer to the Organization’s corrective action plan for further details.