Amador Water Agency

Condition: The final balance of federal grant and loan expenses reported on the Schedule of Expenditures of Federal Awards (SEFA) excluded accruals for qualified expense incurred up through year-end. Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.502 states, ?The auditee should prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements.? Closing procedures should be in place to reconcile grant expenses incurred at year-end to ensure the expenses that will be claimed under the major program are properly reported on the SEFA and audited financial statements prior to the start of the single audit. Cause: Amounts reported on the SEFA were not reconciled to the grant revenue nor construction-in-progress details for the year. Effect: Adjustments were needed to properly report federal revenues and expenditures in the Agency?s SEFA and financial statements, resulting in the expenditures on the SEFA not including all grant reimbursable expenses. If expenses are not properly reported on the SEFA prior to the start of the single audit, the auditor could omit expenses from testing, which would result in the Agency?s single audit not complying with audit standards. Recommendation: We recommend a grant tracking spreadsheet, and that the Agency reconciles the SEFA to the GL to ensure the expenses reported on the SEFA are complete and accurate when the single audit begins.

A grant tracking spreadsheet will be used to reconcile the SEFA to the GL to ensure the expenses reported on the SEFA are complete and accurate. This is additional to Amador Water Agency's corrective action in response to the similar issue noted in the prior year audit, in response to which Amador Water Agency added additional review procedures related to the SEFA.

2020-002

Condition: The final balance of grant expenses reported on the Schedule of Expenditures of Federal Awards (SEFA) excluded grant accrual for qualified expense incurred up through year-end. Criteria: 2 CFR Part 200, Subpart F (Uniform Guidance) Section 200.502 states, ?The auditee should prepare a Schedule of Expenditures of Federal Awards for the period covered by the auditee?s financial statements.? Closing procedures should be in place to reconcile grant expenses incurred at year-end to ensure the expenses that will be claimed under the major program are properly reported on the SEFA and audited financial statements prior to the start of the single audit. Cause: Not all of the grant revenue was accrued up to the amount of qualifying grant expenditures. Effect: Adjustments were needed to properly report federal revenues and expenditures in the Agency?s SEFA and financial statements, resulting in the expenditures on the SEFA not including all grant reimbursable expenses. If expenses are not properly reported on the SEFA prior to the start of the single audit, the auditor could omit expenses from testing, which would result in the Agency?s single audit not complying with audit standards. Recommendation: We recommend the Agency add additional review procedures over the SEFA prior to the audit in the future. The Agency needs to ensure that all qualifying expenditures are identified and revenue is properly accrued up to the amount of expenditures incurred through June 30, regardless of whether the claim has been filed. The list of qualifying invoices and payroll transactions should be finalized and agreed to the general ledger prior to the reimbursement request being made and before the audit begins. The same list of invoices and payroll transactions should be used as the basis of the expenditures reported on the SEFA as well as revenue recognized in the financial statements.

SEFA invoices and payroll transactions will be finalized and reviewed with the Agency accounting records and general ledger prior to the reimbursement request being filed, the revenue recognized, and before the audit begins.