Finding Text
Finding 2023-001: Preparation of Schedule of Expenditures of Federal Awards (SEFA)
Information on the Federal Programs: All
Criteria: As noted in 2 CFR 200.508 “Auditee Responsibilities” indicates that the auditee must prepare
appropriate financial statements, including the Schedule of Expenditures of Federal Awards (as
specifically defined under 2 CFR 200.510 “Financial statements”). Title 2 CFR 200 Section 200.510
“Financial Statements” requires recipients of Federal funds to prepare a Schedule of Expenditures of
Federal Awards (SEFA) for the period covered by the auditee's financial statements, which must
include the total Federal awards expended. Additionally, in accordance with CFR 200.303, the non-
Federal entity must: establish and maintain effective internal control over the Federal award that
provides reasonable assurance that the non-Federal entity is managing the Federal award in
compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition: Accountability Lab experienced difficulty in preparing and ensuring that all Federal
expenditures were identified, categorized, and included in the Schedule of Expenditures of Federal
Awards. The preparation of Accountability Lab's SEFA required manual adjustments of Federal costs.
We noted that the manual adjustments were not completed prior to the start of the audit. We also
noted that a certain award was not clearly identified as Federal pass-through funds and therefore not
initially included on the SEFA. As a result, several adjustments were posted to the financial statements
to ensure Federal receivables, refundable advances and Federal revenue were properly recognized
and accurately stated at year-end.
Cause: The year-end close process did not provide for the preparation of a complete and accurate
schedule of expenditures of Federal awards.
Effect: Without periodic training and consistent application of Accountability Lab’s internal policies and
procedures, this could potentially result in unreliable and erroneous grant reporting, internal record
keeping and decision making.
Questioned Costs: None noted.
Context: Our audit testwork consisted of substantive procedures over the SEFA. We determined that
the issue was systemic in nature.
Identification as a Repeat Finding: Not applicable.
Recommendation: We recommend Accountability Lab establish internal controls to correctly identify
and track all Federal awards received either directly or indirectly.