Finding Text
Finding 2023-003: 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: NDRN 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 NDRN's SEFA required manual adjustments of Federal costs. We noted that the
manual adjustments were not completed prior to the start of the audit.
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 NDRN’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 NDRN establish internal controls to correctly identify and track all
Federal awards received either directly or indirectly.