Presentation by Rick Gratza, CPA
Kerber, Eck & Braeckel LLP
What is a SEFA?
 Why is the SEFA Important?
 Accumulating the Data
 Testing the Data
 Sorting & Summarizing the Data
 SEFA Note Disclosure
 Common Deficiencies
 Resources
 SEFA Checklist


Schedule of Expenditures of Federal Awards

Required by OMB Circular A-133 if Federal
expenditures exceed $500,000 (increase?)

SEFA defined in OMB Circular A-133_.310(b)
◦ Auditee’s responsibility defined in _.300(d)
◦ Auditor’s responsibility defined in _.505(a)

Supplementary information to the basic financial
statements

The SEFA serves as the basis for major program
determination- accuracy and completeness of the SEFA is
critical.

Auditee is responsible for preparing a complete and
accurate SEFA

Auditor is required to assess the District’s internal controls
over preparation of the SEFA.

Auditor is required to perform audit procedures to verify the
accuracy and completeness of the SEFA.

Prepare preliminary SEFA for auditor’s interim work

Update the SEFA for final audit work
Things you will need to get started:
ASBR
 DESE audit confirmation
 Prior year SEFA
 Internet access (CFDA website & OMB website)
 General ledger detailing expenses for all Federal programs
 Final expenditure reports for all Federal programs
 Memo from DESE indicating the value of donated food
commodities
 Payment history report from EPEGS for each Federal
program

Step 1
Obtain/prepare SEFA Preparation Worksheet with the
following columns: (see handout)
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◦
◦
◦
◦
◦
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A. Federal Grantor
B. Pass-Through Grantor
C. Program Title
D. Pass-Through Identifying Number
E. Federal CFDA Number
F. Prior Year Expenditures (for comparison only)
G. Current Year Revenues (for comparison only)
H. Current Year Expenditures
Step 2
Enter Federal revenues from the DESE Audit Confirmation into
column G.
 Federal revenues are good starting point for preparing the
SEFA. If you have Federal revenues, you’re sure to have
Federal expenditures.
Step 3
Enter the amount of any non-cash federal assistance received
during the year in columns G and H.
 This includes the value of donated food commodities
communicated to the District in a letter from DESE usually
in August.
 Any other noncash federal assistance?
Step 4
Reconcile the total revenues from column G to the ASBR.
 This ensures all federal revenues are included on the SEFA.
 During this process, additional federal revenues may be
identified (e.g. funding received directly from the federal
agency or from pass-throughs other than DESE.) These should
be added to the SEFA also.
Examples?
Step 4 - continued
 Exception – Medicaid is reported as Federal revenues on the
ASBR but should not be included on the SEFA. This will be a
reconciling item.
Step 5
Enter the corresponding CFDA number from the DESE Audit
Confirmation or grant agreement into column E.
 Each Federal program is assigned a unique CFDA number.
 The complete CFDA number is a five digit number, XX.XXX
 The first two digits represent the Funding Agency and the second
three digits represent the program.
 e.g. 84.010
84 = Department of Education
.010 = Title I Grants to Local Education Agencies
Step 5 - continued
 If the pass-through grantor failed to indicate the CFDA number,
either contact the pass-through or use a key word search on the
CFDA website to find it.
 Some programs may be funded by more than one CFDA number. In
that case, each CFDA has to be listed separately on its own line.
(e.g Title I source of funds #5451 could be funded by both cfda
#84.010 and 84.377).
Step 6
Enter the name of the pass-through grantor in column B.
 For school districts, the most common pass-through grantor is
DESE.
 If received directly from the Federal government, enter “Direct”.
Step 7
Look up the CFDA number entered in column E from the Catalog
of Federal Domestic Assistance website and enter the Federal
grantor name in column A and the program name in
column C.
 Programs can be searched by CFDA # or keyword.
 Enter the program name from the CFDA website, do NOT
use the name given to the program by the District or
DESE.
 Recovery Act awards must be identified separately on the
SEFA - add prefix “ARRA” to the name of program.
Step 8
Enter the prior year expenditures from the prior year SEFA in
column F.
 This column is not technically part of the SEFA but will be used to
test the reasonableness of the data in a following step.
Step 9
Enter the current year expenditures from the general ledger in
column H.
 The SEFA should be prepared on the same basis of accounting (i.e.
cash, modified accrual) as the financial statements.
 The SEFA must include both direct and indirect costs, and exclude
cost sharing or matching amounts.
 If the program is funded by a combination of both federal and state
or local funds, list only the federal share on the SEFA. Examples?
Step 1
For each program, reconcile current year expenditures (column H) to the
Final Expenditure Report (FER) submitted to the federal grantor or
pass-through agency (i.e. DESE).
 Attach the supporting reconciliation. Your auditors will want this.
Reconciling items could include:
◦ Expenditures obligated in the prior year and reported in
the prior year FER but paid for (accrued) in the current
year
◦ Expenditures obligated in the current year and reported in
the current year FER but paid for (accrued) in the
subsequent year.
Step 1 – Continued
◦ Example:
A purchase order is issued for Title 1 supplies in May 2013.
The supplies are received in July 2014 and paid for in
August 2015.
Expenditure reported on the FY2013 FER since it was
obligated in FY2013
Expenditure reported on the FY2014 SEFA since the
supplies were received and paid for in 2014
Step 2
Compare current year expenditures (column H) to prior year
expenditures (column F) for reasonableness.
 Any significant differences between the current and prior year
should be explained.
 Set a threshold - (e.g. explain variances > 10%)
Step 3
Compare current year expenditures (column H) to the current year
revenues (column G) and explain any significant differences.


Could be timing differences- expenses reported in the SEFA in
one fiscal year may not be reimbursed by DESE until the
following fiscal year.
Check the payment history report on EPEGS for each grant.
The final payment indicated on the payment history report
should agree to the difference, if any, between revenues and
expenses.

Sort the data by CFDA number (column E) so that all
of the financial assistance from the same federal
program is grouped together on the schedule.

Provide subtotals for programs with the same CFDA
numbers (e.g. Special Education programs).

Provide a subtotal for each federal grantor.

Provide a total for all federal programs.
Notes to the SEFA should include these common disclosures:

Significant accounting policies used in preparing the
schedule

Value of noncash assistance expended

Clusters of programs - groupings of closely related
programs that have similar compliance requirements
identified in OMB Circular A-133 Compliance Supplement
Other required disclosures, if applicable, include:

Amounts provided to sub-recipients

Amount of insurance in effect from federal insurance
program

Loans and loan guarantees outstanding
NOTE A—BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards includes the
federal grant activity of ABC School District under programs of the federal
government for the year ended June 30, 201X. The information in this
schedule is presented in accordance with the requirements of OMB Circular
A-133, Audits of States, Local Governments, and Non-Profit Organizations.
NOTE B—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported on the schedule are reported on the (identify basis of
accounting) basis of accounting. Such expenditures are recognized following
the cost principles contained in OMB Circular A-87, Cost Principles for
State, Local and Indian Tribal Governments, wherein certain types of
expenditures are not allowable or are limited as to reimbursement.
NOTE C—SUBRECIPIENTS
Of the federal expenditures presented in the schedule, ABC School District
provided federal awards to subrecipients as follows:
CFDA Number
Program Name
Amount
Provided
Subrecipients
93.600
Head Start
$ 123,965
to
NOTE D—FOOD DONATION
Nonmonetary assistance is reported in the schedule at the fair market value of
the food commodities received and disbursed during the year ended June 30,
201X.
NOTE E – CLUSTERS
Clusters of programs are groupings of closely related programs that share
common compliance requirements. Total expenditures by cluster are:
Child Nutrition Cluster
10.553, 10.555
$6,210,726

Amounts reported in the SEFA did not reconcile to
financial records (i.e. g/l & FER)

The SEFA did not indicate whether the awards were
direct or pass-through.

Notes did not disclose the basis of accounting.

The sub-grant awards numbers assigned by the passthrough entities were not included on the schedule.

The names of the pass-through entities or grantor
federal agencies were missing.

Multiple lines for CFDA numbers were shown, but the
total expenditures for the CFDA number was not
included.

The correct CFDA number was not reported

The correct name of the program was not reported
Catalog of Federal Domestic Assistance
◦ www.cfda.gov
OMB Circular A-133, Audits of States, Local Governments and Non-Profit
Organizations
o
http://www.whitehouse.gov/sites/default/files/omb/assets/a133/a133_revised_2
007.pdf
OMB Circular A-133 Compliance Supplement
◦ http://www.whitehouse.gov/omb/circulars/A133_COMPLIANCE_SUPPLEME
NT_2012
AICPA’s Schedule of Expenditures of Federal Awards (SEFA) Practice Aids (look
for link to auditee practice aids)
◦ http://www.aicpa.org/InterestAreas/GovernmentalAuditQuality/Resources/Audit
PracticeToolsAids/Pages/Single%20Audit%20Practice%20Aids.aspx
1.
Does the schedule of expenditures of federal awards
(SEFA) do the following:
a)
b)
c)
d)
List individual federal programs by federal agency?
Separately list programs with expenditures of Recovery Act
awards?
Include the CFDA number for each program, or if a CFDA
number is not available, include another identifying number and
the name of the program?
Show total federal awards expended for each individual federal
program?
e.
f.
g.
h.
For research and development (R&D) clusters, list federal
awards expended either by individual award or by federal
agency and major subdivision within the agency.
For all other clusters of programs, list the individual awards
within the cluster?
Include the name of the pass-through entity and identifying
number assigned by the pass-through entity for federal
awards received as a sub-recipient?
Identify, to the extent practical, the total amount provided to
sub-recipients from each federal program? (Alternatively,
this information may be included in the notes.)
2.
Do notes to the SEFA appropriately and completely
describe the significant accounting policies used in
preparing the SEFA and the basis of accounting?
3.
Does the SEFA (preferably) or a note to the SEFA
include the value of federal awards expended in the
form of:
a)
b)
c)
Noncash assistance?
The amount of insurance in effect during the year?
The amount of loans or loan guarantees, including interest
subsidies, outstanding at year end?
4.
Does the SEFA include other information required by
federal awarding agencies and pass-through entities?
5.
If nonfederal awards are included:
a)
b)
Is the data clearly segregated and identified as non-federal?
Is the title modified to indicate that non-federal awards are
included?
New guidance in the AICPA Audit and Accounting Guide, State
and Local Governments regarding Required Supplementary
Information (RSI) applicable to cash basis Districts.
Under previous guidance, financial statements prepared on the cash
basis of accounting were to include Management’s Discussion and
Analysis and budgetary comparison information for the General
Fund and major Special Revenue funds consistent with financial
statement prepared in accordance with GAAP.
While this information may still be included with the financial
statements, it is no longer required and therefore, should not be
labeled Required Supplementary Information (RSI).