Finding Text
CRITERIA/SPECIFIC REQUIREMENT:
The Code of Federal Regulations (Code) (2 CFR §200.510 (b)), establishes criteria and requirements related to the preparation of the schedule of expenditures of federal awards.
The Code (2 CFR §200.303 (a)) requires Regional Office of Education No. 39 (ROE) to establish and maintain effective internal control over the federal award to provide reasonable assurance the ROE is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls should include procedures over preparation of the schedule of expenditures of federal awards.
CONDITION:
The ROE did not have sufficient internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA) to ensure all federal expenditures during the fiscal year were reported and information in the SEFA was accurately reported.
CONTEXT:
During our review of the SEFA, we noted the following:
• Program title descriptions were incorrect, and COVID-19-related grants were not properly identified in the program title.
• Assistance listing numbers and pass-through grant numbers were incorrectly listed.
• Federal expenditures did not match the expenditures in the general ledger.
• Subrecipient expenditures were inappropriately reported on grants that did not actually have subrecipients:
• The Education Stabilization Fund was not specifically categorized in the SEFA and the total federal awards expended for the program was not reported.
The ROE subsequently revised its SEFA to correct these errors.
EFFECT:
Failure to report an accurate SEFA affects the required audit coverage to meet federal requirements and can delay an audit beyond the reporting deadline.
CAUSE:
Management indicated the errors on the SEFA was due to oversight.
RECOMMENDATION:
The ROE should establish and implement internal controls over preparation of the SEFA to ensure accurate reporting.
MANAGEMENT’S RESPONSE:
The ROE agrees with this finding.