audit_findings: 4
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| rowid | source | report_number | finding_number | muni_id | state | entity_name | entity_type | entity_ext_id | place_geoid | match_method | auditor | report_title | audit_type | fiscal_year | period_start | period_end | published_date | finding_category | severity | questioned_cost | cost_basis | finding_title | finding_text | report_url | fetched_at |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 4 | wa-sao | 1018576 | 2015-001 | WA | Town of Coupeville | City/Town | 0357 | 5315185 | no_match | Washington State Auditor's Office | Financial and Federal audit — Town of Coupeville | Financial and Federal | 2015 | 2014-01-01 | 2015-12-31 | 2018-09-20 | federal_award_compliance | material_weakness | The Town did not have adequate internal controls in place to ensure accurate financial reporting on the Schedule of Expenditures of Federal Awards | Background Town management is responsible for designing and following internal controls that provide reasonable assurance regarding the reliability of financial reporting. These controls should ensure financial events are identified properly and presented completely. Controls should also ensur e the criteria and accounting methodology applied to financial events is correct. Our audit identified a deficiency in internal controls that adversely affected the Town’s ability to produce reliable schedules. Because of its effect on the Town’s financial reporting, we consider this a significant deficiency. Local governments in Washington that spend federal funds must prepare a Schedule of Expenditures of Federal Awards (SEFA) as part of the annual financial report. Federal regulations require grantees to identify, in their accounts, all federal money spent on the SEFA each fiscal year. If the government spends $750,000 or more in federal grant awards in a year, it must arrange for an audit of its federal grants, in accordance with federal regulations. Further, the government must submit the single audit reporting package to the federal government within 30 calendar days after we issue our audit report or within nine months after the end of the audit period, whichever is earlier. Description of Condition The Town’s internal controls over financial reporting of the SEFA were not sufficient to ensure accurate presentation . Although required for governments reporting on a cash basis, t he Town did not report expenditures paid related to a federal loan on the SEFA. Cause of Condition The Town did not have a clear understanding of the SEFA reporting requirements for its federal grants and loans and did not follow guidance provided in the Budgeting, Accounting and Reporting System (BARS) Manual or Uniform Guidance. Washington State Auditor’s Office Page 7 Although the Town had procedures in place to review the required schedules, the review was not adequate to detect and correct errors related to the SEFA before the audit. Effect of Condition The Town misstated its SEFA because it did not include expenditures of the federal loan awarded under CFDA 10.760 Water and Waste Disposal Systems for Rural Communities. The Town identified the misstatement and corrected the SEFA. However, the additional expenditures caused the Town’s annual federal expenditures to exceed the $750,000 threshold, requiring a federal single audit, after the Town’s federal deadline for completing the audit and submitting its reporting package had expired. After the federal deadline, our Office completed a federal single audit, updated and reissued our financial audit report and issued the Town’s federal single audit report. Recommendation s We recommend the Town: Prepare the SEFA in accordance with requirements outlined in the Budgeting, Accounting and Reporting System (BARS) Manual and Uniform Guidance Strengthen internal controls over SEFA preparation to ensure all federal awards spent are included on the schedule Town ’s Response In 2015 the Town received a Water and Waste Disposal Systems for Rural Communities loan from the USDA. Town staff sought guidance from their USDA representative on reporting requirements and was told the loan did not qualify for reporting on the Schedule o f Expenditures of Federal Awards (SEFA) because it was a loan and not a grant. Based on this inaccurate guidance, the loan expenditures were not reported on the 2015 SEFA. Unfortunately, the 2014 -2015 annual audit performed by the State did not find the error in the 2015 SEFA report either. In late 2017 the Town applied for a FEMA grant, which if awarded in 2018 would require specific financial management. In preparation of possibly receiving this grant award the Town sent staff to a Washington State Audito r's training on managing Federal Awards, to ensure records and reporting would be handled appropriately. It was at this training that staff learned that the federal loan awarded under CFDA 10.760 should have been included in the 2015 SEFA report. Washington State Auditor’s Office Page 8 The Town immediately contacted the State Auditor's Office to self -report and then filed a corrected SEFA and scheduled a federal single audit. Auditor’s Remarks We appreciate the Town’s commitment to resolve this finding and thank the Town for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 510 – Financial Statements, establishes criteria and requirements related to the preparation of the schedule of expenditures of Federal awards. The American Institute of Certified Public Accountan ts defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, paragraph 11. Budget, Accounting and Reporting Standards (BARS) manual 4.8.5 establishes reporting requirements related to the schedule of expenditures of Federal awards. Title 2 CFR Part 200, Uniform Guidance, section 302 – Financial Management, requires grantees to identify, in their accounts, all Federal awards received and expended and the Federal programs under which the awards were received. Title 2 CFR Part 200, Uniform Guidance, section 501 - Audit Requirements, requires non -Federal entities that expend Federal awards of $750,000 or more during its fiscal year to have conducted a single audit. Title 2 CFR Part 200, Unifor m Guidance, section 514 – Scope of Audit, requires the audit be conducted in accordance with Generally Accepted Government Auditing Standards (GAGAS) and encompass the financial statements and schedule of expenditure of Federal awards (SEFA). Title 2 CFR Part 200, Uniform Guidance, section 512 – Report submission, requires the audit be completed, the data collection form and reporting package submitted within the earlier of 30 calendar days after the auditor’s report, or nine months after the end of the audit period. Washington State Auditor’s Office Page 9 | https://portal.sao.wa.gov/ReportSearch/Home/ViewReportFile?arn=1018576&isFinding=false&sp=false | 2026-07-30 13:24:54 |