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How to prepare a SEFA for a single audit

SEFA, fedearl funding, government accountingSingle audits are designed to be a cost-effective way of determining whether or not federal grant money is being used properly. It is up to the entity to establish and maintain a system of controls that will give reasonable assurance that the grant is being spent within the laws, regulations and specific conditions of the grant.

If $750,000 of federal awards is expended in one year, you are required to hire a qualified auditor to perform a single audit. This includes if the recipient of federal dollars is a pass-through entity and is expending money to sub-recipients. It is the entity’s responsibility to monitor the sub-recipient and ensure they meet the requirements of the OMB Federal Uniform Guidance and specific requirements of the grant.

An important step in becoming ready for a single audit is to properly prepare the Schedule of Expenditures of Federal Awards, or what is more commonly referred to as the SEFA. This schedule summarizes the grants received and how much was expended throughout the year. To increase your audit efficiencies, it is important to use the correct CFDA (Catalog of Federal Domestic Assistance) numbers, which indicates the federal agency and funding program for the grant. Some of these CFDA numbers are required to be clustered, or grouped together, on the SEFA, and the correct program title can be found here.

The last crucial part of your SEFA is the amount of expenditures associated with each grant. This is critical as it helps the auditor determine which grants are major and therefore need to be tested. Be sure to prepare your staff for the additional work of a single audit as the auditor will request documentation for the expenditures associated with each grant that is tested. To learn more about single audits, click here and here.

Andrew Gill, CPA

Comments

  1. isis Mathoslah says:

    if i need to reconcile between the SEFA and Trail Balance , what should i do to bring the
    grant expenditure to reconcile to grant trail balance.

    What expenditures should be removed from grant expenditure for example ,
    Match dollars
    Depreciation amount
    private fund
    what else we should consider to be taken out

    • admin says:

      Isis,

      Great question. All you need to do to reconcile is take out any non-federal expenditures such as any matching dollars, state or local grant monies not passed through the federal government, etc.

      Thanks,

      Andrew Gill