Finding Text
Criteria: Per 2 CFR 200.510(b) Schedule of expenditures of Federal awards, “the auditee must prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502, Basis for determining Federal awards expended.
Condition: Due to the nature of Rainbow Health Minnesota’s federal funding, management has been unable to accurately identify total federal expenditures for reporting on the SEFA.
Cause: Internal controls are not in place to identify all contract and grant agreements that are federally funded. Additionally, Rainbow Health Minnesota does not always receive notification from its pass-through funders that specifies the federally funded portion of each payment received.
Effect: By not having proper controls over SEFA preparation, there is a risk that the SEFA will not reflect all the federal awards subject to the Uniform Guidance.
Questioned Costs: $0
Identification of Repeat Finding: Not a repeat finding.
Recommendation: We recommend that Rainbow Health Minnesota review procedures to ensure timely identification of federal funds, including increasing communication with pass-through funders to identify all expenditures that are federal in nature.
Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and identifies federal funding based on contract language. The contracts do not include a percentage of funding that is not federal. To ensure proper spending of federal funds, Rainbow Health Minnesota treats all funds as federal funds.