Finding Text
2 CFR 200.508 requires that proper internal controls are in place for the preparation of the Schedule of Expenditures of Federal Awards (SEFA), which must include the total federal awards expended and the Assistance Listing Number for each individual federal program. The auditors are required to determine whether the SEFA is stated fairly in all material respects in relation to the auditee’s financial statements as a whole. The auditors also utilize the SEFA for the determination of the major federal programs that will be audited.
Condition During our audit, we became aware of a material misstatement in the SEFA due to an excluded federal program: the Transportation Infrastructure Finance and Innovation Act (TIFIA) Program with federal expenditures of $537,484,439 for the fiscal year ended June 30, 2023.
Effect As a result of correcting the error in the SEFA, the TIFIA program was assessed for testing as a major program and met the criteria to require the program to be tested. Additionally, another major program that had already been selected and tested no longer was required to be tested as a major program.
Cause The TIFIA program expenditures were new in the fiscal year ended June 30, 2023 and SANDAG’s system of internal controls did not identify the program as federal expenditures subject to the single audit requirements.
Recommendation We recommend SANDAG enhance the system of internal controls for identification of federal awards subject to the single audit requirements and the preparation and review of the SEFA for accuracy and completeness.