Finding Text
Federal agency: All agencies in the SEFA
Assistance Listing Number: See SEFA
Award Period: 01/01/2023 to 12/31/2023
Type of Finding: Significant Deficiency in Internal Control Over Financial Reporting
Criteria or Specific Requirement:
2 CFR Section C: Subpart F Audit Requirements § 200.510 Financial statements Part (b) states: The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with § 200.502 – Basis for determining Federal awards expended.
Condition:
Adjustments to the SEFA were necessary due to the internal controls not recognizing and correcting expenditures initially reported in the SEFA provided for audit. The SEFA as presented has been adjusted and is correct.
Cause:
The internal preparation and review processes did not identify the misstatement of the SEFA prepared for audit purposes.
Effect or potential effect:
If the SEFA is misstated related to the programs and expenditures incurred for the program. This could impact the scope of the audit and therefore the federal agencies’ reliance on the audit results.
In addition, inaccurate tracking of federal expenditures may prevent the Organization from identifying when an audit in accordance with Government Auditing Standards and Uniform Guidance is required.
Repeat Finding:
No
Auditor’s Recommendation:
We recommend the auditee prepare supporting documentation for the calculation of the SEFA programs and amounts. We also recommend that the supporting documentation is reviewed and agreed with the SEFA for completeness and accuracy.
Finally, we recommend that the Organization include fiscal training related to Uniform Guidance if federal programs continue to be a source of revenue.
Views of Responsible Officials and Planned Corrective Actions:
We agree that, due to data entry errors, the SEFA provided at the start of the single audit did not include the appropriate and applicable federal expenditures.
We will be more diligent in the preparation of the SEFA to help prevent the potential for inadvertently misrepresenting the total federal expenditures and avoid the necessity for adjustments to the SEFA in future audits. At the issuance of the reports, we have enhanced our internal controls and processes related to the preparation of the SEFA to prevent this situation in future years. Our goal is to eliminate any errors to ensure that all applicable federal expenditures are complete and accurate.