Finding 2024-001
significant deficiency
- Program
- CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS (21.027)
- Compliance requirement
- Reporting
- FAC record
- FY2024 audit on fac.gov
Finding text from the filing
Condition: The Organization tracks grants by individual cost-centers, which allows for total revenue and total expenditures by grant to be easily identifiable. In preparation of the Schedule of Expenditures of Federal Awards (SEFA), the Organization did not include a significant grant that is sourced from federal funds and required for testing.
Criteria: Section 2 CFR 200.510(b) of the Uniform Guidance requires that an auditee prepare a schedule of expenditures of federal awards, which includes individual federal programs by federal agency and total federal awards expended for each individual federal program and Assistance Listing Number. Management is responsible for establishing and maintaining an effective system of internal control to allow for complete and accurate preparation of the SEFA.
Cause: The Organization received a new one-time agreement during 2024, and the granting agency did not provide sufficient information for the Organization to clarify the funds were derived from federal funds. As such, the finance team did not include the grant expenditures in the schedule of expenditures of federal awards.
Effect: Inaccurate reporting of federal expenditures could result inaccurate major program determinations, risk assessments, identification of compliance requirements, and ultimately incomplete reporting of federal funds expended to granting agencies.
Questioned Costs: None reported.
Context/Sampling: Sampling was not used.
Repeat Findings From Prior Year: No.
Recommendation: We recommend management review all new grant agreements for indicators of federal awards (such as an Assistance Listing or CFDA number, references to federal regulations, references to federal laws or bills, etc.), and communicate with granting agencies for clarity. We recommend management receive confirmation in writing from any granting agencies about the source of any grants, when there is doubt about whether a grant is federally-sourced or not.
Management Response: Management agrees with the recommendation and will ensure both program and financial staff understand the importance of determining the source of new grant funds, to ensure the schedule of expenditure of federal awards is accurately prepared.