Finding Text
Finding 2022-001: Schedule of Federal Awards (Material Weakness) U.S. Department of Education COVID-19 Education Stabilization Fund 84.425E, 84.425F Compliance requirement: Reporting Criteria: The Uniform Guidance requires that the auditee prepare a Schedule of Federal Awards ("SEFA") for the period covered by the auditee's financial statements. The schedule shall provide the total federal awards expended for each individual Federal program and the Assistance Listing number or other identifying number when the Assistance Listing Number information is not available. Condition and Context: During our audit, we noted that the Higher Education Emergency Relief Funds ("HEERF") expended per the SEFA in the Uniform Guidance report and submitted to the Federal Audit Clearinghouse for the year ended September 30, 2021, were not properly recorded. The actual HEERF expended for the year ended September 30, 2021, was $97,066 compared to the HEERF expenditures reflected on the SEFA of $440,450. This resulted in an inaccurate SEFA being submitted to the Federal Audit Clearinghouse and the Department of Education. Cause: Internal controls over the accurate preparation and completeness of the SEFA were not operating effectively. Effect or Potential Effect: The institute was not in compliance with federal regulations regarding reporting for the year ended September 30, 2021. An improper SEFA could result in errors in accounting, revenue recognition, and disallowed costs. Questioned costs: $0 Identification of repeat finding: No. Recommendation: We recommend that the Institute implement a formal policy for preparing the SEFA and reconciling the SEFA for accuracy and completeness to underlying accounting records. View of Responsible Officials: We agree with both the finding and the recommendation. The amount reflected in the year ended September 30,2021 SEFA was misstated due to an incorrect interpretation as to the amount to be reported as an accrual of HEERF expenditures under the Uniform Guidance for SEFA reporting. The correct amount of HEERF expenditures were included in the GAAP financial year ended September 30, 2021 financial statements. HERRF expenditures for the year ended September 30,2022 were reported correctly in both the SEFA report and the GAAP financial statements.