Notes to SEFA
Accounting Policies: Basis of Accounting: This policy outlines the basis on which the SEFA is prepared. Generally, it follows the accrual basis of accounting, which means transactions are recorded when they occur, regardless of when the cash is received or paid.Consistency: The SEFA should disclose whether the accounting policies have been consistently applied from one period to another. Any changes in accounting policies and the impact on the SEFA should also be explained.Identification of Federal Awards: This policy outlines the criteria used to identify which awards are considered federal awards and, therefore, are included in the SEFA.Treatment of Pass-Through Awards: For entities that pass federal funds through to subrecipients, the SEFA should disclose the accounting treatment used. This includes identifying which awards are considered as subawards and the method of presentation in the SEFA.Allocation Methods: If the entity receives a mix of federal and non-federal funds and applies different allocation methods to determine how costs are attributed to each award, these methods should be disclosed in the SEFA.Direct and Indirect Costs: The SEFA should disclose the accounting treatment of direct costs that can be specifically identified with a particular federal award versus indirect costs, which are shared among multiple federal awards.Treatment of Unliquidated Obligations: If there are unliquidated obligations at the end of the reporting period, the entity should disclose the accounting treatment used in the SEFA.Treatment of Program Income: Program income is generated by a federal award and should be disclosed separately in the SEFA. The policy should explain how it is treated and whether it is deducted from total program costs or added to the federal award.Treatment of Prior Period Adjustments: Any significant prior period adjustments related to federal awards should be disclosed in the SEFA.Treatment of Termination or Closeout Adjustments: If there are any termination or closeout adjustments related to federal awards, the accounting treatment should be disclosed in the SEFA.Treatment of Indirect Costs: If the organization is using a different rate for indirect costs than the one provided by the federal awarding agency, the rationale and accounting treatment should be disclosed in the SEFA.
De Minimis Rate Used: N
Rate Explanation: The auditee did not use the de minimis cost rate.