Finding 965926 (2022-001)

Federal Award Omitted from Schedule of Expenditures of Federal Awards Grantor: Federal Emergency Management Agency (FEMA) Award Name: Disaster Grants – Public Assistance (Presidentially Declared Disaster) Award Year: FY2022 Assistance Listing Number: 97.036 Condition During the 2023 Uniform Guidance audit, Management identified $11.2 million of funds from this program that were not appropriately recorded in the 2022 SEFA. On the 2022 SEFA, management did not record reimbursement requests approved by the Federal Emergency Management Agency (FEMA) related to expenditures incurred in fiscal years 2020 and 2021. Criteria Per the FEMA’s Public Assistance Program, nonfederal entities must record expenditures on the Schedule of Expenditures of Federal Awards (SEFA) when (1) FEMA has approved the nonfederal entity’s project worksheet, and (2) the nonfederal entity has incurred the eligible expenditures. Cause The cause of this finding was due to insufficient review of the SEFA. Effect Federal funds related to program 97.036 of $11.2 million were incorrectly excluded from the 2022 SEFA. Had this been recorded correctly, this program would have been tested as a major program in 2022. As such, the 2022 SEFA was required to be revised, testing was performed over this program for 2022, and a significant deficiency in internal controls over compliance was identified and included in the 2022 Report of Independent Auditors on Compliance for Each Major Program and on Internal Control Over Compliance Required by Uniform Guidance, and the reporting package was re-submitted to the Federal Audit Clearinghouse. Questioned Costs There are no questioned costs associated with this finding. Recommendation Management should enhance the controls in place to review the SEFA. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.