Finding Text
Finding 2024-002 Schedule of Expenditures of Federal Awards (SEFA) Preparation (Significant Deficiency)
Information on the Federal Programs: Research and Development Cluster.
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Per 2 CFR
§ 200.510(b), the auditee must prepare a SEFA for the period covered by the auditee’s financial
statements. The SEFA must include total Federal awards expended, including Federal awards passed
through from other entities, the name of the pass-through entity, and the identifying number assigned
by the pass-through entity.
Condition: During audit procedures, we identified a Federal pass-through award from under the
Research and Development Cluster that was omitted from the preliminary SEFA. The expenditures
associated with this award totaled approximately $72,000 for the fiscal year ended December 31, 2024.
Cause: The omission resulted from inadequate internal controls over the collection and review of
information used to prepare the SEFA. The client relied on a manual process to track Federal awards,
and the pass-through award was not included in the final SEFA due to oversight.
Effect or Potential Effect: The SEFA provided to auditors was incomplete and did not accurately
represent the total Federal expenditures. This could lead to an understatement of total Federal
expenditures and result in noncompliance with Uniform Guidance reporting requirements.
Questioned Costs: N/A.
Context: The SEFA initially provided by FASEB included 45 Federal awards with total expenditures of
$1,248,060. The omitted pass-through award represented expenditures of $72,333, or approximately
6% of total Federal expenditures for the year. The omission appears to be isolated to this particular
award; however, it was not detected by FASEB’s existing SEFA preparation and review process.
Identification as a Repeat Finding, if Applicable: N/A.
Recommendation: We recommend FASEB enhance its internal control procedures over SEFA
preparation to ensure all Federal awards, including those received through pass-through entities, are
properly identified, tracked, and reported. This could include periodic reconciliations between the
general ledger and award documentation and a formal review process prior to finalizing the SEFA.