Finding Text
Assistance Listing Number, Federal Agency, and Program Name - 84.425, U.S. Department of Education, Education Stabalization Fund Federal Award Identification Number and Year - P425E203325, Various Pass-through Entity - N/A Finding Type: Significant Deficiency Repeat Finding - No Criteria - Expenditures are required to be reported on the Schedule of Expenditures of Federal Awards (SEFA) according to the basis of accounting followed by the nonfederal entity, per 2 CFR 200.502(a) and in accordance with the cost principles that the program is subject to (2 CFR 200, Subpart E). Condition - The College reported $593,703 of expenditures on the SEFA for disbursements to students that occurred prior to July 1, 2021. This treatment is not in accordance with the accrual basis of accounting following generally accepted accounting principles (GAAP), which is the basis of accounting for the College's SEFA. Questioned Costs - There were no questioned costs identified. Identification of How Questioned Costs Were Computed - Although the expenditures identified were not reported in the appropriate period for the purposes of the SEFA, based on audit procedures performed, they were still within the period of performance for the award. Context - Amounts that were disbursed to students in June 2021 as emergency grants under the Student Portion of the award for summer term were incorrectly not captured on the June 30, 2021 SEFA. These amounts were reported on the June 30, 2022 SEFA. Because they were not captured in the appropriate period, the College concluded to report them on the 2022 SEFA in order to ensure that the expenditures were subject to audit. Cause and Effect - Instead of the College accumulating the total expenditures by disbursement date, management accumulated the total expenditures by academic term. This resulted in a certain expenditures being reported on the SEFA in the incorrect period. Recommendation - We recommend that the College establish controls to ensure appropriate cutoff for SEFA reporting purposes. Views of Responsible Officials and Corrective Action Plan - The College will review its practices for SEFA reporting and in the future follow U.S. GAAP and the uniform guidance.