Finding Text
2025-003 Schedule of Expenditures of Federal Awards Preparation (SEFA) Criteria: 2 CFR §200.510 requires non-Federal entities expending federal awards to prepare a complete and accurate SEFA that includes all Federal awards expended during the fiscal year. Condition: The Organization's SEFA materially understated Federal expenditures. During the audit, additional Federal reimbursements were identified and included, resulting in a material adjustment to the SEFA. Cause: Management's procedures for identifying, accumulating, and reporting Federal expenditures were not sufficient to ensure the SEFA was complete and accurate. Effect: A materially misstated SEFA could result in inaccurate reporting of Federal expenditures, affect the identification of major programs, and impair compliance with Uniform Guidance reporting requirements. Recommendation: We recommend that management strengthen its procedures for preparing and reviewing the SEFA by reconciling Federal expenditures to the general ledger, grant agreements, and reimbursement requests before the SEFA is finalized. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation and plans to enhance its SEFA preparation and review procedures.