Finding Text
2023-001 – Material Weakness, Completeness and Accuracy of Schedule of Expenditures of Federal and State Awards (Repeat Finding 2022-001)
Criteria: Committee of Sponsoring Organizations (COSO) Framework – control activities: Proper review of the schedule of expenditures of federal awards (SEFA) and schedule of expenditure of state awards (SESA) includes the accuracy and completeness of the schedules.
Condition: We identified 15 federal programs and five state programs requiring adjustment to the reported expenditures. We identified two programs included on the SEFA without an assistance listing number, which resulted in the programs being reported as from the incorrect oversight agency. We identified one program was missing from the SEFA. One program was reported as a state program that was a passthrough of a federal program. The SEFA and SESA balance is required to be reconciled to the basic financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The Town has failed to adequately perform such reconciliation.
Cause: Grant management and reporting is not centralized within the Town and are left to the individual departments. Additionally, management as well as department heads are unfamiliar with grant accounting in accordance with U.S. GAAP.
Effect or Potential Effect: This can result in an inaccurate amount reported in the SEFA, SESA, or basic financial statements or the disallowance of expenditures / future awards by the grantor due to lack of proper reporting.
Recommendation: We recommend that Town management, in coordination with the departments; establish policy and procedures to help to make certain all federal and state expended funds are captured timely and appropriately in the correct fiscal year in the SEFA and SESA.
Questioned Costs: None
Context: See condition above.
Repeat Finding: This is a repeat of finding 2022-001.
View of Responsible Official: Due to turnover at the Greenwich Public Schools in key positions in recent years, the Town’s Finance Department has come to realize the grants reporting needs to be centralized. Initially, the Finance Department will assume more responsibility in the SEFA and SESA reconciliations of the reports to the Town’s financial software (MUNIS) until a Town-wide centralized grants reporting unit can be established. See corrective action plan.