Finding 966743 (2022-002)

Finding 2022-002: Significant Deficiency – Schedule of Expenditures of Federal Awards (SEFA). Assistance Listing: 20.507 and 20.526, Federal Transit Cluster Federal Grantor: U.S. Department of Transportation, Federal Transit Formula Grants Passed-through: The City of Davis Pass-through Grantor’s No.: CA-2019-107 Compliance Requirement: Reporting Condition: Expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA) were revised during the single audit. Criteria: Internal controls should be in place that provide reasonable assurance that the SEFA is complete and accurate. Cause: The SEFA was not finalized until after the single audit began. This is an ongoing issue from prior years as we noted changes to amounts previously reported on SEFAs as well. Most of the revisions in the current year were due to Finding 2022-001, as there were additional eligible expenses found during the audit due to lack of internal control over closing procedures. Effect: The expenses included on the SEFA were revised during the single audit, which could have resulted in the auditor not selecting the correct expenses for testing and could have resulted in the single audit not satisfying the requirements of the Uniform Guidance. Amounts reported to the Federal Clearinghouse each year may not be accurate. Context: $237,177 of expenses were added to the SEFA after the single audit began. Recommendation: We recommend additional review procedures be implemented to ensure the expenditures reported on the SEFA are complete and accurate when the single audit begins. View of Responsible Official and Planned Corrective Action: See the Corrective Action Plan attached.