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Finding No. 2022-001 ? Preparation of Schedule of Expenditures of Federal Awards Criteria Title 2: Grant and Agreements, Part 200 ? Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (?Uniform Guidance?), Subpart F Audit Requirements, specifically ?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 ?200.502 - Basis for determining Federal awards expended. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must include: ? List of individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. ? Total Federal awards expended for each individual Federal program and the CFDA number or other identifying number when the CFDA information is not available. For a cluster of programs, the total award expended for the cluster must also be provided. ? For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. Condition In performing procedures over the completeness and accuracy of El Proyecto del Barrio, Inc?s (El Proyecto?s) schedule of expenditures of federal awards (SEFA) for the year ended September 30, 2022, we noted that the SEFA prepared by management contained incorrect information such as contract number, grant period, program award amount and federal expenditure amount. As such, the SEFA was not prepared in an accurate manner and required revisions identified by the auditors. Cause El Proyecto?s procedures and controls were not properly implemented to ensure compliance with federal requirements in the preparation of the SEFA. The misstatement in the federal expenditures reported in the SEFA is not significant. We noted that El Proyecto has a formal process in place for SEFA preparation and reporting; however, we noted that it does not include 1) a formal in-depth review of the required elements of the SEFA, and 2) supplemental procedures for those grants or federal funding received where there is a lack of readily available guidance, in order to help ensure that the SEFA is complete and accurate. Effect An inaccurate or incomplete SEFA may result in an inefficient audit approach and incorrect program risk assessment process. It also increases the risk of incorrect major program determination. Additionally, an incorrect allocation of costs to federal programs can lead to expenditures being paid with the incorrect funding source. Questioned Costs None. Recommendation The SEFA, which is prepared by the auditee and considered supplementary information to the financial statements, is a key part of the reporting package required by the Uniform Guidance. The SEFA also serves as the primary basis that auditors use to determine which programs will be audited as part of the single audit. Therefore, the auditee?s responsibility for preparing an accurate and complete SEFA is critical. We recommend that El Proyecto reviews its existing process for preparation and review of the SEFA and incorporate additional procedures as necessary to the current review checklist, inquiry with the Federal granting agency or pass-through entity, when necessary, and other research procedures to help ensure the accuracy and completeness of the SEFA and that errors are identified and corrected prior to submission. In addition, we recommend that the grant tracking sheets are appropriately reconciled to the accounting records in order to ensure payments do not exceed budgeted amounts, especially for contracts that include multiple federal fiscal years of funding. Views of Responsible Officials and Planned Corrective Action Ricardo Ornelas, Chief Financial Officer, reviewed the processes for preparation of the SEFA and incorporated additional procedures to ensure errors are identified and corrected prior to submission, including multiple levels of review for the prepared SEFA to ensure the information reported in the SEFA reconciles to the contract, amendment(s), payment confirmation, and underlying accounting records. In addition, management will adopt the said recommendations above.