ENVIRONMENTAL LAW INSTITUTE

Criteria: The auditee is responsible for establishing and maintaining financial management systems that can provide accurate, current, and complete amounts and disclosures of their financial information as required by U.S. GAAP and the Uniform Guidance. The definition of a federal award under the Uniform Guidance includes direct and indirect federal assistance. Condition: Assistance received indirectly from pass-through entities was not included on the Schedule of Expenditures of Federal Awards. Cause: A misunderstanding lead the auditee to believe that only direct federal funding from grants and cost-reimbursement type contract was to be included on the Schedule of Expenditures of Federal Awards. Effect: Three federally funded subawards received from pass-through entities were added to the Schedule of Expenditures of Federal Awards. Repeat finding: This is not a repeat finding. Recommendation: We recommend that the auditee review the definition of a federal award under the Uniform Guidance and other relevant guidance on the preparation of the Schedule of Expenditures of Federal Awards.

In 2020, the Finance team is seeking out additional guidance and training to better understand the criteria for which projects below on the SEF. For existing and all new federal funded projects, a notation will be added to the contract summary to indicate federal funding. The team will also work with grantors who are pass-through entities to obtain the original federal grant agreement when possible.