Finding Text
CFDA Number, Federal Agency, and Program Name ALN 84.425E and 84.425F, Department of Education, COVID 19 Education Stabilization Fund 84.047A, Department of Education, TRIO Cluster Upward Bound 84.425N, Great Start for Higher Education Federal Award Identification Number and Year P425E202505, P425F202028, P425M200851, P047A170893, P047A170894, P047A170895, H325N180008 20 Pass through Entity N/A for ALN 84.425E and 84.047A, which were direct funded ALN 84.425N was passed through the University of Toledo Finding Type Material weakness Repeat Finding No Criteria 2 CFR 200.510(b) requires organizations to 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 2 CFR 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass through entities to make the schedules easier to use. Condition The original schedule of expenditures of federal awards (SEFA) provided by the College was not complete and accurate. The audit team identified numerous errors throughout the course of our procedures which were brought to management's attention. Management made the appropriate corrections to adjust the SEFA to the appropriate balances and presentation. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context The College accumulates the financial data and other required information to complete the SEFA. The original SEFA provided by the College to the audit team included several inaccuracies, including missing and/or incomplete expenditure amounts and incorrect presentation of pass through entities, award numbers, and award amounts. The SEFA most significantly included the following inaccuracies: $2,620,508 spent under ALN 84.425E (HEERF) was improperly excluded from the SEFA. Expenditures under ALN 84.425F (HEERF) were overstated by $149,844 for costs incurred outside the fiscal period under audit. Expenditures under ALN 84.047A (TRIO) were overstated by $304,924 for costs incurred outside the fiscal period under audit. $28,941 spent under ALN 84.425N (Great Start for Higher Education) was improperly excluded from the SEFA. Cause and Effect Controls and processes in place to prepare the SEFA did not ensure that the SEFA was complete and accurate. After follow ups with the audit team, all errors were corrected by management and all expenditure amounts and information were properly reported on the SEFA for the year ended June 30, 2022. Recommendation The College's process for preparing the SEFA should be adjusted to ensure that accounting records are closed timely, internal accounts are reconciled (i.e. the SEFA reconciles to federal revenue recorded), and appropriate workpapers are prepared to support the SEFA balances. In addition, client should review award numbers, award amounts, pass through entity information, and expenditure amounts for accuracy before providing the SEFA to the auditors. This process should include review by appropriate individuals, including the Director of Financial Aid, Director of Financial Services, and individuals involved in the administration of grants. Views of Responsible Officials and Corrective Action Plan A detailed business procedure will be written and implemented that expressly lists how to handle year end audit as it relates to both the Annual Financial Audit and the Single Audit. The procedure will include processes for quarterly balancing and review, at a minimum. The procedure will include the creation of the annual SEFA document to be used by auditors in determining what programs the College has been awarded and what expenditures have been made. It will also include who is to handle all pieces of the audit and preparation in the absence of the Director of Financial Services.