2024-007 – Preparation of the Schedule of Expenditures of Federal Awards (SEFA) (Significant Deficiency) Department of Education, SFA Cluster, Special Tests and Provisions Criteria: According to 2 CFR 200.210(b), a recipient of Federal awards is required to prepare a SEFA for the period covered by the entity’s financial statement which must include the total Federal awards expended. In addition, 2 CFR 200.303 requires non-Federal entities to, among other things, establish, document, and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. Effective internal controls should include procedures to ensure expenditures are properly reported on the SEFA. In addition to providing an accurate SEFA, an organization must also be able to demonstrate that it has a system of internal control that supports the preparation of the SEFA. Condition: The University did not have an adequate process in place to prepare and review its SEFA. Cause: The University’s internal control process for preparing the SEFA did not include review and approval of the SEFA prior to providing it to the auditor. Effect: Failure to accurately report federal expenditures on the SEFA could result in noncompliance with federal regulations. Repeat Finding from a Prior Year: Not a repeat finding. Recommendation: We recommend the University establish, document, and maintain effective internal controls over the preparation of the SEFA. At a minimum, an organization should be able to show documentation that the SEFA was reviewed and approved by an individual who was not directly involved with the initial preparation of the SEFA. The review process should include checking both the reported expenditures of federal awards and the assistance listing numbers reported for each grant program. Management Response: The University acknowledges the identified deficiency in the internal control process related to the preparation and review of the Schedule of Expenditures of Federal Awards (SEFA). In response, the University has implemented a formalized and documented process to ensure the SEFA is accurately prepared, thoroughly reviewed, and approved in compliance with 2 CFR 200.210(b) and 2 CFR 200.303. The corrective actions taken include: 1) Independent Review and Approval: The SEFA is now subject to a formal review and approval process by an individual who is independent of the initial preparation. This review involves verifying the accuracy of vreported expenditures, confirming the proper listing of assistance numbers (CFDA numbers), and ensuring that all program titles match the federal award documentation. 2) Internal Control Documentation: The University has documented its SEFA preparation and review procedures as part of its internal control framework. This documentation includes roles, responsibilities, timelines, and sign-off requirements to provide an audit trail for compliance verification. 3) Staff Training and Cross-Departmental Coordination: Staff involved in grants accounting and financial reporting will receive targeted training on SEFA requirements. Additionally, coordination among the Financial Aid Office and Finance Office has been strengthened to ensure the complete and accurate sharing of data related to federal award expenditures. Responsible Party and contact information: Joshua Henry – Executive Director of Financial Aid, henryjs@webber.edu, Jennifer Mueller – Assistant Vice President of Finance, muellerjj@webber.edu. Expected Date of Correction: 8/1/2025