Finding Text
CRITERIA of Specific Requirement - Reporting CONDITION - During our assessment of internal controls for the single audit, we identified control deficiencies related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA) for the year ended December 31, 2022 that in aggregate are a significant deficiency. As a result, the SEFA presented to us for audit did not include $450,000 expended in the year 2022 for CDFI FA Grant 2021. CAUSE - 1. The system for tracking and monitoring federal award expenditures does not ensure the completeness and accuracy of the data used for SEFA reporting because there is a lack of communication between operations personnel that approve the expenditures and accounting personnel who must record transactions and prepare the SEFA. 2. The Credit Union does not have an accounting policy to establish the criteria for recording expenditures and grant income. 3. There is a need for enhanced training and awareness for federal award compliance, including a better understanding of the applicable federal regulations and reporting requirements. EFFECT or POTENTIAL EFFECT - The potential effect is incomplete reporting of expenditures in the SEFA and recognition of grant income in the proper reporting period. QUESTIONED COSTS - Not applicable as the final SEFA is properly stated.