A single audit is required when a not-for-profit organization expends $750,000 or more in either direct or indirect federal awards, and provides assurance to the federal government as to whether the organization is in compliance with federal statutes and regulations. For the organization that needs a single audit performed, one of the key reporting requirements is the Schedule of Expenditures of Federal Awards (SEFA).
The SEFA is a financial schedule prepared by management that details an organization’s expenditures of federal awards by source of federal agency, award number, and its respective expenditures. The information within the SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The preparation of the SEFA is the responsibility of the auditee.
Listed below are five key items management should include on the SEFA that will ensure the schedule is accurate and complete.
- Grantor Agency/Pass-Through Grantor: The grant funds can be received directly from a federal agency or from a pass-through agency. With any grant received it is important to read through the grant to understand if the monies are federal funds. It is important to know the source of funds, as this is one indicator that could determine whether a single audit is required.
- Federal Assistance Listing Number: The Federal Assistance Listing Number (formerly known as the Catalog of Federal Domestic Assistance (CFDA) Number) can be found within the grant agreement. The federal assistance listing number is a five-digit number assigned to the funds used for governmental reporting and auditing. The first two digits reflect the federal agency from which the funds are provided, and the final three digits indicate the federal program funding the project.
- Federal Program Name and Number: The auditee is required to disclose the name of the federal program, which may also have a unique identifier number to be disclosed.
- Subrecipient Information: If funds received and expended by the not-for-profit organization were passed through to subrecipients, the not-for-profit includes the total amount provided to subrecipients from each federal program.
- Expenditures: The auditee must report the total federal awards expended for each individual federal program for the reporting period under audit. A subtotal should also be provided for a cluster of programs (a group of closely related programs that share a common compliance requirement).
An accurate and complete SEFA prepared by management not only meets an auditee’s responsibilities under the Uniform Guidance but also provides important information for the auditor to plan and perform the single audit.
Peter Krone, Senior Accountant, Audit & Accounting
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