The Family TreeNon-Profit

Finding # 2021-001 Condition: The Organization's Schedule of Expenditures of Federal Awards (SEFA) inaccurately presented the federal expenditures for the federal awards. The identified misstatement was corrected in the accompanying SEFA and had no impact on the financial statement amounts. Criteria: Internal controls should be in place to provide reasonable assurance that the SEFA is prepared in accordance with the Uniform Guidance. The Uniform Guidance, at 2 CFR section 200.508(b), requires, the Organization to prepare appropriate financial statements, including SEFA. Cause: Reconciliation to the related expenditures from federal awards was not performed and would have identified the noted misstatement in the SEFA. Effect: Lack of effective controls in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected in a timely manner. Recommendation: The Organization should have effective internal controls in place to ensure that the SEFA is accurately prepared and reconciles to the related revenues and expenses recorded in the financial statements. Views of Responsible Officials and Planned Corrective Actions: We are in agreement with the auditor's finding # 2021-001 and expect the finding to be resolved prior to the FY 2022 audit occurs (6/30/22). The Finance Director will thoroughly review all grant related revenues and expenditures reported in our general ledger system to determine whether the related amounts need to be reported on the Annual Schedule of Federal awards (SEFA). The general ledger amounts will be reconciled to SEFA prior to the inception of the audit. Should grant documents be unspecific to their source funding, the Finance Director will reach out to Grantor via E-mail to determine if Federal source funding was involved.