By: Teena R. Curnow, CPA
Audit Manager

The Schedule of Expenditures of Federal Awards (SEFA) is required if an entity's total expenditures equal or exceed $750,000 in a fiscal year. The SEFA supplements the audited financial statements and determines the applicability and scope of the single audit. Below we will cover some basics you should be aware of.

What is a single audit?
A single audit is a narrow focus audit that reviews how you managed the grant(s) and ensures you followed the rules for dollars associated with the grant(s) or award(s). It will entail testing the entity’s internal controls as a whole and over the individual compliance requirements that must be followed for the particular grant being audited. Similar to a regular audit, specific transactions will also be selected for further analysis.

Who needs a single audit?
A single audit is required when an entity spends more than $750,000 of federal funds in a fiscal year. This includes all funding from federal sources, regardless of where they are passed through (state or local agencies). A single audit is tracked by expenditures charged to the grant in a given year, not the award amount of the grant.

What is a Schedule of Expenditures of Federal Awards (SEFA)?
The SEFA, which is prepared by the auditee's management, is required if an entity's total expenditures equal or exceed $750,000 in a fiscal year. The SEFA supplements the audited financial statements and determines the applicability and scope of the single audit. The SEFA summarizes all the entity’s federal programs and must include specific information. This allows for sufficient disclosure of the entity’s active grants and necessary identifiers related to those grants, such as grant numbers and pass through agency names. 

What needs to be reported on the SEFA?
The SEFA serves as the primary basis that auditors use to determine which programs will be audited as part of the single audit. Therefore, it is critical that the auditee prepares an accurate and complete SEFA. While there is no one required format, below are the main components that must be included:
     - Grant name
     - Agency by which the funds were received
     - Assistance listing number (formerly known as a CFDA number)
     - Award amount
     - Cash received
     - Amount expended

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