At its most basic level, the schedule of expenditures of federal awards, commonly referred to as the SEFA, is a supplemental schedule to the audited financial statements required when an organization meets the threshold for a single audit under 2 CFR Part 200 Subpart F. However, the SEFA, if designed and used properly, can be a useful tool to track and manage expenditures for all grants in an organization.
The basic requirements for the SEFA under Subpart F include the following elements:
- A listing of federal programs by federal agency, including clusters of programs.
- For awards received as a subrecipient, the name of the passthrough entity and award I.D. number.
- Total expenditures for each program and the assistance listing number (ALN), and total expenditures for each cluster, if any.
- Amounts passed through to subrecipients.
In addition, the SEFA is required to include notes that disclose the organization’s significant accounting policies related to the preparation of the SEFA, whether the organization elected to use the de minimus indirect cost rate, and other program specific disclosures as applicable (for example, loan guarantee programs must disclose the end of year outstanding balance).
While this summarized information is the minimum requirement for the SEFA included in the financial statements under Subpart F, the post-award requirements under 2 CFR Part 200 Subpart D require an organization to document and track this same information at the individual award level. Note that the requirements under Subpart D apply to all organizations who receive federal funding, not just those who meet the threshold to trigger a single audit. An internal SEFA is a great place to meet several of the documentation requirements under Subpart D that can be used to easily summarize the information for the supplemental financial statement required by Subpart F when required for a single audit. All it takes is a little customization.
The first change to make would be to include the required information broken out at the individual award level, rather than summarizing it by ALN. Including the individual award level of detail will also facilitate the use of the SEFA to meet other documentation requirements under Subpart D, such as the requirement to track the unobligated funds for all awards received. By adding the total award amount and the cumulative expenditures charged to each grant (separating current year expenditures from those incurred in prior years), your SEFA is now taking care of this requirement as well.
While the SEFA is specifically targeted to the tracking of federal grants, state and local grants can be tracked on the same worksheet; just be sure the funding source for each grant is clearly identified as federal, passthrough, or non-federal (note: the SEFA should already be identifying whether the funding source is federal or passthrough). This will allow for efficient tracking of all grants in one place. In addition, this information is likely to be requested by your auditors at audit time since the SEFA is the starting place for the single audit (or determining whether a single audit is needed). Tracking this information in an internal SEFA throughout the year helps ensure that your SEFA is complete and accurate and is more efficient than trying to accumulate it at the end of the year.
These are just a few simple examples of how creating an internal customized SEFA can turn a basic supplemental statement into a tool to track grants and maintain compliance with documentation standards that can easily be summarized for the final SEFA. Depending on the number of grants an organization receives and the level of federal funding, there may be additional ways an internal SEFA can be customized and adapted to create operational efficiencies to track and account for grants. For additional information or recommendations specific to making your organization’s SEFA more useful, contact your DZA team member.
