Under Uniform Guidance, entities that expend more than $750,000 in federal funds are subject to a single audit. This requires the auditee to prepare a Schedule of Expenditures of Federal Awards (SEFA). SEFA is a schedule that will show the financial statement user the expenditures by federal fund for the fiscal year and is used to determine if a single audit is required. Below is what should be included in a SEFA:
Individual federal programs by federal agency– The name of the federal program and the related federal agency (i.e., U.S. Department of Labor, U.S. Department of Energy, U.S. Department of Housing and Urban Development, etc.) that funds are coming from should be disclosed.
CFDA listing number– The Catalog of Federal Domestic Assistance (CFDA) describes an individual federal award program, with each specifically numbered. There are over 2,000 of these individual programs in the catalog. If a CFDA number is unavailable, another identifying number needs to be provided for the program. For clusters of programs (i.e., R&D Cluster), the cluster name, list of individual federal programs within the cluster, applicable federal agency names, and total federal awards for the cluster.
Total federal awards expended for each individual program– There should be an amount expended for each CFDA number and a subtotal amount for each federal agency.
Total federal awards expended– There should be a sum of these subtotals for each agency making a total of federal awards expended.
Separate identification of COVID-19 funding– Appendix VII of the 2020 Compliance Supplement adds a requirement to separately identify COVID-19 related award on the SEFA. Each COVID-19 related award should be included as a separate line with “COVID-19” before the program name. If there are both COVID-19 and non-COVID-19 funds spent on the same CFDA number, then a total of funds expensed under that CFDA number must be shown.
Types of funds included– There are 15 types of awards, both financial and nonfinancial, according to the CFDA. The eight principal types of assistance are formula grants, project grants, direct payments for specific use, direct payments with unrestricted use, direct loans, guaranteed or insured loans, insurance, and sale exchange or donation of property and goods. The seven other types of assistance are use of property facilities and equipment, provision of specialized services, advisory services and counseling, dissemination of technical information, training, investigation of complaints, and federal employment. Also, remember that cost-reimbursement type contracts under Federal Acquisition Regulations are considered federal awards under the Uniform Guidance and should be included on the SEFA.
Subawards– If federal funds are received from another government or nonprofit organization, that pass-through entity should be disclosed and the award should be treated as though they were received directly from the federal government. These funds should be separate from directly received funds on the SEFA. Also, the amounts provided to subrecipients from each federal program must be disclosed.
When you’re compiling the SEFA, make sure you consider everything listed above. There should be strong controls in place to ensure the SEFA is complete and COVID-19 funds are presented separately. This should be a year-round, continual process and not something that is completed merely for the audit.