Finding Text
2022-002 Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards) Information on the Federal Program: United States Department of State Assistance Listing Number: 19.706 Assistance Listing Name: Partnership for Regional East Africa Counterterrorism Award Numbers: Direct Award Numbers Award Period SLMAQM20CA2264 September 28, 2020 through March 29, 2024 SLMAQM20GR2364 September 28, 2020 through September 30, 2024 Criteria: CFR Section ?200.510(b) states in part: ?The auditee must also 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 CFR Section ?200.502 Basis for determining Federal awards expended.? The schedule must provide total Federal awards expended for each individual Federal program. In accordance with ?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 ?200.327 Financial Reporting and ?200.328 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 internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not operate as designed. During our testing of management?s preparation of the SEFA, BDO identified two awards whose assistance listing number was changed by the federal entity in award amendments issued prior to December 31, 2022. Management failed to update the assistance listing number for the awards within the SEFA to address the award modifications. Questioned Costs: None. Context: The nature of these findings is detailed in the condition section above. Cause: The internal controls established for the review and approval of the SEFA to ensure its completeness and accuracy did not fully operate as designed. The Organization did not adequately review award modifications for changes to existing awards. Effect: The SEFA initially provided to BDO resulted in incorrect major program selection as prescribed under the Unform Guidance. During the review of the award agreements, BDO identified the assistance listing numbers for the two awards had been modified. This issue resulted in a different major program selection once the SEFA was updated to reflect the correct assistance listing numbers. Repeat Finding: This finding is not a repeat finding from prior year. Recommendation: We recommend management to continue to focus on training for both preparer and reviewers of the SEFA to ensure the documented policies and procedures can be performed as prescribed to comply with Section ?200.510(b). This will ensure that the SEFA provides all relevant information as proscribed.