California Capital Financial Development CorporationNon-Profit

INTERNAL CONTROL OVER COMPLIANCE Finding 2024-001 – Significant Deficiency Award No.: 11.307, Economic Adjustment Assistance Federal Grantor: U.S. Economic Development Administration Compliance Requirement: Other compliance requirements. Condition: The schedule of Expenditures of Federal Awards (SEFA) was not complete, and expenditures reported on the SEFA were revised during the single audit. 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.” Internal controls over the SEFA should be in place ensure accrual basis expenses incurred under the federal program are properly reported as expenses on the SEFA and are properly reported as revenue in the financial statements prior to the start of the single audit. Cause: SEFA was not fully reconciled and finalized until after the single audit began. Effect: The expenses included on the SEFA were revised during the single audit, which could have resulted in the auditor not selecting the correct major program or expenses for testing and could have resulted in the single audit not satisfying the requirements of the Uniform Guidance. Recommendation: We recommend additional review procedures be implemented to ensure the SEFA is complete and accurate when the single audit begins. Views of Responsible Officials and Planned Corrective Actions: Year end SEFA reconciliation will be formalized and performed to ensure it is complete and accurate when the single audit begins.