Finding 2024-002
material weaknessother matters
- Program
- CHILD AND ADULT CARE FOOD PROGRAM (10.558); COMMUNITY PROJECT FUNDING CONGRESSIONALLY DIRECTED SPENDING (20.534); CONSOLIDATED RAIL INFRASTRUCTURE AND SAFETY IMPROVEMENTS (20.325); FEDERAL TRANSIT CLUSTER (20.500, 20.507, 20.526); HIGHWAY PLANNING AND CONSTRUCTION CLUSTER (20.205); PUBLIC TRANSPORTATION INNOVATION (20.530); RAIL AND TRANSIT SECURITY GRANT PROGRAM (97.075)
- Compliance requirement
- Other
- FAC record
- FY2024 audit on fac.gov
Finding text from the filing
Finding 2024-002: Preparation of the Schedule of Expenditures of Federal Awards Material weakness/other matter noncompliance
Criteria: The Uniform Guidance (2 CFR 200.510b) requires that the auditee (typically a non-federal entity receiving federal funds) must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by its financial statements which must include the total Federal Awards expended as determined in accordance with 2 CFR 200.502.
Condition: The original SEFA provided to the auditors for the year ended September 30, 2024, excluded $7,110,697 in federal expenditures across seven different programs because of inappropriate application of pre-award authority. For a breakdown of the exclusions by program refer to the “Effect” section below. Of the excluded amount, $6,213,216 was for ALN 20.534 Community Project Funding Congressionally Directed Spending (AL #20.534).
Cause: The existing internal control procedures for processing year end activity to fully support the SEFA reporting cutoff deadline is deficient. While a process is in place, it does not fully capture all the needed communication, coordinated review, and approval leading to eligible expenditures being omitted.
Effect: The Authority failed to appropriately prepare the SEFA in compliance with the Uniform Guidance (2 CFR 200.510b) as a result of errors in identifying expenditures in accordance with 2 CFR.502. The impact on each of the programs on the SEFA is as follows:
These errors and corresponding deficiencies could impact future federal award funding programs.
Context: As a result of the omission of eligible expenditures, total federal awards for ALN 20.534, Community Project Funding Congressionally Directed Spending, were understated by $6,213,216 due to the exclusion of expenditures. This understatement caused the major program determination to be improperly calculated and resulted in a missed major program.
Questioned Costs: None
Repeat Finding: No
Recommendation: We recommend that CapMetro re-evaluate their controls related to the identification and accrual of federal expenditures as well as the control process for the preparation of the schedule of expenditures of federal awards during their year-end close process to ensure timely and accurate reporting. View of Responsible Officials: Management agrees with this finding and acknowledges the material weakness in internal controls related to the preparation and review of the Schedule of Expenditures of Federal Awards (SEFA). The control deficiency resulted in eligible federal expenditures being omitted from the SEFA, causing federal expenditures to be understated for the reporting period.