CENTER FOR SUSTAINABLE ENERGY

2021-003 ? Schedule of Expenditures of Federal Awards (SEFA) Program: All federal programs Criteria: CSE is required to have controls over the preparation of the schedule of expenditures of federal awards. Condition: CSE had an error in the preparation of the SEFA due to which the total federal expenditures showed less than $750,000. CSE?s total federal expenditures was $972,042 which required a Uniform Guidance audit. Cause: CSE?s accounting department did not have adequate review procedures in place with respect to the preparation of SEFA. Due to lack of internal review process, the error was not corrected before the financial statement audit was issued. Effect: Uniform Guidance audit was not done before the issuance of the audited financial statements. Questioned costs ? There were no questioned costs. Views of the responsible official and planned corrective action: CSE agrees with the finding and will adhere to the corrective action plan as shown on page 27 of the audit report

CSE conducted internal trainings to ensure that the accounting department understood the requirements associated with the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Additionally, CSE has developed and implemented new review procedures that involve the explicit review of the annual SEFA by management to ensure that any required Uniform Guidance audits are conducted in conjunction with CSE?s financial statement audits.

2021-004 ? Reconciliation and Closing Procedures Program: All federal programs Criteria: CSE is required to have controls in place over financial reporting and closing procedures. Condition: CSE transitioned to a new accounting system and was unable to produce a trial balance from its new accounting system in a timely manner. This prevented normal reconciliations and closing processes. Cause: The implementation of the new accounting system precluded CSE from producing a complete trial balance, including beginning and ending balances, that could be relied upon for audit procedures. CSE had to implement alternative procedures to manually prepare a trial balance by combining financial information from both the prior accounting system and the new accounting system to arrive at a complete trial balance for the 2021 year. Effect: Reconciliations and closing procedures were not performed prior to the start of the audit causing the audit completion to be delayed. Questioned costs ? There were no questioned costs. Views of the responsible official and planned corrective action: CSE agrees with the finding and will adhere to the corrective action plan as shown on page 28 of the audit report

CSE encountered challenges in completing a transition in its primary accounting systems that occurred at an interim point in calendar year 2021. These challenges resulted in the inability to produce a complete system generated trial balance, a significant delay in the completion of account reconciliations, and a significant delay of the resulting 2021 financial statement audit. CSE has procured additional resources in order to support the completion of the 2021 audit. These incremental resources will also be retained to ensure that timely reconciliations are performed in subsequent accounting periods, that financial information contained within the new accounting system is complete and reconciles to the audited financial statements, and that subsequent audits are adequately supported and completed timely. Additionally, as was previously described in CSE?s response to finding 2021-002, CSE has developed a standardized Month End Close Policy that will help to ensure CSE?s close procedures are occurring in a timely manner going forward.