THE LOS ANGELES REGIONAL INTEROPERABLE COMMUNICATIONS SYSTEM AUTHORITY

Reference Number: 2025-001 Federal Program Title: Homeland Security Grant Program Federal Assistance Listing Number: 97.067 Federal Agency: U.S. Department of Homeland Security Pass-Through Agencies: California Governor's Office of Emergency Services (Cal OES)/County of Los Angeles Federal Emergency Management Agency (FEMA)/Grant Programs Directorate (GPD)/City of Los Angeles Federal Award Number and Year: 037-00000; Grant Years 2021, 2022, 2023 and 2024 Category of Finding: Reporting – SEFA (2 CFR §200.510(b)) Type of Finding: Material Weakness in Internal Control over Compliance Criteria In accordance with Uniform Guidance (2 CFR §200.510(b)), the auditee is required to prepare a Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the financial statements that includes the total Federal awards expended for each Federal program. Condition The Authority Fiscal Agent (County of Los Angeles Auditor-Controller) initially prepared the SEFA based on Federal grant reimbursements received during the fiscal year rather than Federal awards expended, as required by the Uniform Guidance (2 CFR §200.510(b)). As a result, the SEFA originally prepared by the County of Los Angeles Auditor-Controller management did not accurately report Federal awards expended for the fiscal year. The SEFA was subsequently revised to properly report Federal awards expended. The methodology used to prepare the SEFA had also been applied in prior years; therefore, the SEFA amounts for the two prior fiscal years presented for comparative purposes in the current report were revised to reflect Federal awards expended. Cause The Authority’s procedures for preparing and reviewing the SEFA did not fully address the requirement to report Federal awards expended in accordance with Uniform Guidance. The methodology used to compile the SEFA relied on Federal grant reimbursements received rather than Federal program expenditures recorded in the Authority’s accounting records. As a result, the review procedures performed over the SEFA did not identify that Federal awards expended were not being reported. Effect As a result of the methodology used to prepare the SEFA, the schedule required material revisions during the audit to properly report Federal awards expended. The same methodology had also been applied in prior years, resulting in revisions to the SEFA amounts for the two prior fiscal years presented for comparative purposes in the current report. The Authority administered only one Federal program during the current and prior two fiscal years; therefore, the revisions to the SEFA did not affect major program determinations. The revisions also did not affect the Authority’s previously issued financial statements. Questioned Costs None Recommendation Management should update its procedures for preparing the SEFA to ensure the schedule is compiled based on Federal awards expended recorded in the accounting records, rather than Federal reimbursements received, and that the review process verifies the SEFA accurately reports Federal awards expended. Management’s Response We agree. The Authority Fiscal Agent (County of Los Angeles Auditor-Controller) has reviewed our procedures to record expenditures in the SEFA to ensure amounts are correctly stated in the proper period when expensed rather than when the reimbursement is received. Corrective Action Plan During the fiscal year 2024-2025 audit, we implemented internal controls to properly record the expenditures in the SEFA. Implementation Date March 23, 2026