Finding Text
Finding 2022-001, Inaccurate SEFA, Reporting - U.S. Department of Health and Human Services, Head Start Cluster: ALN 93.600 Criteria: The Uniform Guidance requires that the auditee prepare a SEFA for the period covered by the auditee's financial statements. At a minimum, the schedule shall: ? List all individual Federal programs by Federal agency. ? Include the name of the pass-through entity and the identifying number assigned by the passthrough entity for all Federal funds expended as a subrecipient. ? Include the amount of Federal funds passed through to subrecipients. ? 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: The Organization's current policies and procedures on the preparation of the SEFA were not detailed enough to ensure that all pass-through federal funds are included, which resulted in the SEFA provided to the auditors to not accurately reflect the pass-through federal funds given to subrecipients. Cause: Internal controls over the accurate preparation and completeness of the SEFA were not operating effectively. Effect: An improper SEFA and delays in identifying pass-through federal funds given to subrecipients could result in errors in accounting, revenue recognition, disallowed costs, and noncompliance with Uniform Guidance requirements. Identification as a repeat finding: Yes. Questioned costs: None. Recommendation: We recommend that the Organization strengthen its policies and procedures for the identification of Federal awards, including pass-through federal funds to subrecipients, to ensure a complete and accurate SEFA is prepared in a timely manner and in accordance with the requirements of the Uniform Guidance. Views of responsible official: There was an oversight in the completion of the SEFA resulting in not including passthrough federal funds given to subrecipients. Going forward, workflow has been amended to take into account any subawards given to subrecipients of federal funds, to ensure inclusion of the information in the SEFA.