Friday, March 11, 2011

Schedule of Expenditures of Federal Awards (SEFA)

Friday, March 11, 2011 1
Has your organization established appropriate procedures to determine whether funds received from government agencies are federal sourced? For federal sourced funds was the correct CFDA (Catalog of Federal Domestic Assistance) number provided in the agreement? After preparing the SEFA, did you reconcile the schedule with applicable revenues and expenditures in your general ledger?

In reviewing the SEFA for completeness and accuracy, we often find that many of our clients are not properly distinguishing between federal and non-federal sourced revenues, they are not documenting the correct CFDA number and they are not reconciling the SEFA to the general ledger. The granting government agency is required to inform the recipient whether and how much of the funds are federal sourced. Although required, the appropriate information is not always provided to the recipient. The implementation of the following procedures will assist you, the recipient of government funding, in ensuring that your SEFA is complete and accurate:

Read and document your understanding of the funding agreement, and look for clues.
  • What type of agency provided the agreement (i.e. federal, state or local government)
  • Was a CFDA number provided in the agreement?
  • Are there specific audit provisions included in the agreement which may indicate federal sourced funds?
After reading and understanding the funding agreement, consider contacting the grantor agency to ensure your understanding is correct. Items to consider discussing with the grantor agency:
  • If absent from the agreement ask if any of the funds are federal sourced, and if they are, obtain the CFDA number.
  • Discuss allowable contract expenditures and the appropriate documentation needed to support expenditures.
  • Discuss the reporting requirements (financial and/or programmatic) and the level of detail required.
  • Document your conversation with the grantor agency.
Maintain a detailed schedule of all funding agreements to include the following:
  • Grantor name and number
  • Term of the funding agreement contract
  • Dollar amount of funds provided in agreement
  • Distinguish between federal and non-federal funding sources
  • CFDA number
  • Year-to-date and cumulative program expenditures (reconciled to the general ledger)
  • Reporting deadlines

American Recovery Reinvestment Act (ARRA) Funds

Will things change? Yes!

The ARRA imposes new transparency and accountability requirements on Federal awarding agencies and their recipients. The Single Audit process is a key factor in the achievement of accountability objectives of the Office of Budget and Management.
  • The recipients and uses of all funds are transparent to the public, and the public benefits of these funds are reported clearly, accurately, and in a timely manner;
  • And funds are used for authorized purposes and instances of fraud, waste, error, and abuse are mitigated.
Federal agencies are required to specifically identify ARRA awards, regardless of whether the funding is provided under a new or existing CFDA number.
  • New programs—Federal agencies will use new CFDA numbers for new ARRA programs or for existing programs for which the ARRA provides for compliance requirements that are significantly different for the ARRA funding.
  • Existing programs—Federal agencies may or may not use a new CFDA number for ARRA awards to existing Federal programs.
Key items which are most critical to ARRA accountability:
  • Have your ARRA funds been segregated and separately identified on your SEFA? This would include those awards which fall within a cluster. Were procedures in place to capture pertinent information
  • Were your quarterly reports submitted as required by ARRA?
  • Have you obtained your Dun and Bradstreet Data Universal Numbering System (DUNS)? DUNS Number is a unique nine-digit identification number for each physical location of your business. DUNS number assignment is FREE for all businesses required to register with the U.S. Federal government for contracts or grants. Obtain additional information on
  • Increased documentation for expenditures is essential. ARRA dollars are going to be watched more closely.
  • Your auditor will likely identify the award as high risk, which means it could be tested. It is possible that more awards will be tested in current year compared to the past.
  • Ensure ARRA funds are tracked separately in your general ledger and ensure internal controls are in place and the process is documented in order to provide sufficient audit trail.
Please contact us if you have any questions or need assistance in preparing your Schedule of Expenditures of Federal Awards.
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