Finding Text
2025-001 – Incomplete and Inaccurate Schedule of Expenditures of Federal Awards (SEFA) Criteria
In accordance with 2 CFR § 200.508(b), the auditee must prepare a Schedule of
Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial
statements. The SEFA must be prepared in accordance with the requirements of 2 CFR §
200.510(b), which includes reporting total federal awards expended for each federal
program during the audit period, regardless of whether a reimbursement has been
requested.
Condition
During our audit of the SEFA, we noted that the reported expenditures for the Economic
Development Cluster only included those amounts for which reimbursement requests had
been submitted as of year-end. Expenditures that had been incurred but not yet submitted
for reimbursement were omitted. In addition, other grants were inadvertently excluded
from the SEFA schedule. This resulted in an incomplete and inaccurate presentation of
total federal expenditures for the fiscal year.
Cause
The cause of this condition was a misunderstanding by management regarding the proper
basis for reporting federal expenditures. Management relied solely on reimbursement
activity, rather than on total expenditures incurred during the audit period, when preparing
the SEFA. In addition, management should review all federal funding/expenditures activity
to verify all grants are captured on the SEFA.
Effect
Failure to report all federal expenditures incurred during the reporting period resulted in a
misstatement of total federal awards expended. This can impact the determination of major
programs, the risk assessment process, and federal oversight. Additionally, it results in
noncompliance with federal regulations governing SEFA preparation.
Recommendation
We recommend that management implement procedures to ensure the SEFA includes all
federal expenditures incurred during the reporting period, regardless of whether
reimbursement has been requested. This should include reconciling SEFA amounts to the
underlying accounting records and grant activity, as well as training responsible personnel
on Uniform Guidance requirements for SEFA reporting. Management’s Response
Responsible Official’s Response and Corrective Action Planned: We have implemented
procedures to ensure that the SEFA includes all federal expenditures incurred during the
reporting period, regardless of whether reimbursement has been requested. Reconciliation
of the SEFA amounts are completed monthly. Management will also offer and require
training to all personnel responsible on the Uniform Guidance requirements for SEFA
reporting.
Implementation Date: Immediate
Person Responsible for Corrective Action Plan: Chief Financial Officer, Ashley Cason