Finding Text
Criteria
Management is required to prepare the Schedule of Expenditures of Federal Awards (“SEFA”).
If the SEFA includes errors or omissions, it will surely result in inefficiencies, additional audit
effort by auditors if major programs must be re-selected, the potential for audit restatement,
and/or additional audit costs.
Condition
Not all federal expenditures were included on the client prepared Schedule of Expenditures of
Federal Awards. There were differences noted in reconciling expenditures from the original
SEFA to the government contract revenue (which is the basis for expenditures), and it was
discovered that certain adjustments for grants receivable, unearned revenues and grant
revenue had not been made in order to properly report total federal expenditures. These errors
were corrected through adjustments proposed as part of the financial statement audit.
Questioned Costs
None
Context
One of the grants, containing funding from the federal program assistance listing number
14.231- Emergency Solutions Grant Program incorrectly omitted $301,226 of federal
expenditures on the SEFA provided by management.
Cause
Funding received from one award was incorrectly reported as part of the contribution revenue
and omitted from the client prepared SEFA.
Effect
This delayed the completion of the compliance audit.
Recommendations
We recommend that the Organization become familiar with the SEFA reporting elements
required by the Uniform Guidance and develops and implements a review process to ensure a
complete and accurate SEFA is prepared. These processes and controls should include
reconciling the SEFA to the current year general ledger expenditures, grant reporting
submitted/approved and reviewing other grant related information to ensure accuracy.
Additionally, management should consider requiring key Grants Management personnel take
advanced Uniform Guidance training and annual updates, as made available.