Schedule of Expenditures of Federal Awards (SEFA)
Under Uniform Guidance (2 CFR 200), a non-Federal entity that expends $750,000 or more in Federal awards during the non-Federal entity’s fiscal year must have a single audit conducted. The non-Federal entity is responsible for arranging for the audit, preparing the appropriate financial statements, taking corrective action on audit findings, and providing the auditor with access to all information required to perform the audit. The auditee (non-Federal entity) is also responsible for submitting the audit reporting package and related data collection form to the Federal Audit Clearinghouse (the repository of record designated by the Office of Management and Budget (OMB)).
In addition to financial statements, the single audit reporting package includes the non-Federal entity’s Schedule of Expenditures of Federal Awards (SEFA). All expenditures of Federal funds must be accounted for in the annual SEFA whether funds are received directly from a Federal agency or indirectly from a pass-through entity. To ensure that Federal funds are properly included in the SEFA report and spent in accordance with Federal requirements at the University, all Federal funds (except financial aid funds) are administered in sponsored accounts by the Office for Research and Sponsored Projects Administration (ORSPA). This practice helps to mitigate the risk of inaccurate reporting and helps to promote compliance with Federal laws, regulations and provisions of agreements related to Federal programs.
It is the auditor’s responsibility to determine and provide an opinion on whether the SEFA is presented fairly in all material respects in relation to the non-Federal entity’s financial statements taken as a whole. The SEFA is also the basis for the determination of major programs which are required to be audited as part of the single audit.
At a minimum, the SEFA should include:
- The name of the Federal grantor agency or organization;
- The official program title of the Federal award;
- The applicable CFDA (Catalog of Federal Domestic Assistance) number for each award;
- The contract or grant numbers assigned by Federal or state agencies, in addition to the CFDA number;
- Current year expenditures; and,
- Footnote disclosures.
Arizona State University’s single audit is conducted by the State of Arizona Office of the Auditor General (Auditor General). ASU’s SEFA is consolidated by the Auditor General with the SEFA reports of all other state agencies within Arizona and is published as part of the Single Audit Reporting Package.
In some instances it can be challenging to determine whether externally funded activity should be included on the SEFA. A review of key term definitions in Uniform Guidance can help in making this determination. Key terms include Expenditures, Federal award, Federal financial assistance, Grant agreement, and Cooperative agreement.
Not all issuances of Federal funds look alike. Differences exist amongst agencies, programs, awards and funding mechanisms which can make it difficult to definitively determine whether funds received and expended are from a Federal source. When in doubt, ask for assistance in researching and reaching a decision on whether funds are from a Federal source. While sponsors are generally expected to notify recipients that funds are from a Federal source, recipients are held to a ‘due diligence’ standard in making an independent determination based on available information.
When the source of funds is identified as Federal, one must also determine whether the University is considered to be a contractor (previously referred to as a ‘vendor’) providing goods or services through a procurement relationship. Federal funds received when ASU is acting as a contractor may not need to be included on the SEFA report. ORSPA Grant & Contract Officers can assist in making these determinations.