Finding Text
Assistance Listing Number. Federal Agency, and Program Name - ALN 66.458, U.S. Environmental Protection Agency, Clean Water State Revolving Fund (CWSRF)
ALN 21.027, U.S. Department of the Treasury, Coronavirus State and Local Fiscal Recovery Funds (CSLFRF)
Federal Award Identification Number and Year - ALN 21.027 - SLFRP0127, program year 2021
Pass-through Entity - ALN 66.458 - EGLE
ALN 21.027-EGLE
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - Per 2 CFR 200.510(b): The auditee must also prepare a schedule of expenditures of federal awards for the period covered by the auditee's financial statements, which must include the total federal awards expended determined in accordance with § 200.502. While not required, the auditee may choose to provide information requested by federal awarding agencies and pass-through entities to make the schedule easier to use.
Condition - The schedule of expenditures of federal awards (SEFA) was incomplete and inaccurate.
Questioned Costs - None
Identification of How Questioned Costs Were Computed - Not applicable
Context - In fiscal year 2023, the City expended approximately $1.5 million of federal funding. The funding was received by various departments within the City from several federal and nonfederal entities. The City accumulates the financial data and other required information to complete the SEFA. Adjustments to correct the SEFA were required as follows:
- $69,880 of expenditures was removed from the SEFA provided to the auditors by the City related to ALN 66.458
- $295,000 of expenditures was added to the SEFA provided to the auditors by the City related to ALN 21.027
Cause and Effect - Controls in place did not ensure the SEFA was complete and accurate, and, as a result, the errors had the following impact:
- $69,880 of expenditures was removed from ALN 66.458; as a result, CWSRF was overstated.
- $295,000 of expenditures was added to ALN 21.027; as a result, CSLFRF was understated, impacting major program determination.
These errors have been corrected on the SEFA.
Recommendation - The City should implement a process to ensure the SEFA is complete and accurate by thoroughly reviewing agreements for grants received and reconciling the SEFA to a final trial balance prior to the start of the audit.
Views of Responsible Officials and Corrective Action Plan - We are implementing a procedure whereby the controller’s office receives copies of all contracts to ensure all reporting requirements are met and financial deliverables are completed according to the schedules.