By Jacob Crosby, CLC Consultant
The Schedule of Expenditures of Federal Awards, or SEFA, is one of those audit items that can be a daunting task on the audit request list. Let me help make this task less daunting so you can check it off the list early on in your audit preparation process. Once you finish reading this article, you will be ready to prepare your SEFA, or at least know who to call if you have questions.
Since the SEFA is one of those tasks that seems very overwhelming, I find it best to break it into sections that are more manageable. Those sections include the List of Notice of Awards (NOA), Grant Tracking workbook, Payment Management System (PMS) draws report, and the Summary or SEFA schedule.
NOA Listing - The NOA listing is just that, a list of all the notice of awards for the last grant year. If you are new to the process, it can be helpful to list out the NOAs for the last couple of grant periods. On the list I find it most helpful to include the NOA ID, CFDA number, Authorized Financial Assistance, Awarded Financial Assistance, Previous Fiscal Year Expenditures, Current Fiscal Year Expenditures, Date NOA was Issued, Project Period, Budget Period, and a note for if it is the Base grant or a supplemental grant, such as IBHS or QI. The listing breaks down each individual NOA as most of the time the base grant is split between two CFDA numbers (93.224 & 93.527). The CFDA split out can be found at the bottom of your NOA. I have found that this list also helps mark off an additional item for the audit as the auditors will typically ask for all the NOAs for the last fiscal year. The amounts that are noted under the Current Fiscal Year Expenditures column will ultimately end up on the SEFA summary tab.
Grant Tracking Workbook - The grant tracking workbook is a much larger topic that could really be discussed in greater detail, but we will just note the basics for the purposes of the SEFA. It is best practice to keep a grant tracking workbook that shows all your grant expenses that tie to your grant draws. This detail is sometimes also kept in the accounting software, but this part of the SEFA is really something that can be maintained throughout the year to make this process a bit quicker. The goal of the grant tracking workbook is to show all the expenses during the fiscal year that match your draws during the fiscal year. These expenses are then linked over to the NOA listing tab for the corresponding grant and fiscal year.
PMS Draw Report - The “Draws Report”, which runs out of PMS, is the simpler part of the SEFA workbook as it is a system generated report that you are getting into a workable format in Excel. The report is used to tie out the grant tracking workbook expenses. This is something that I find to be helpful to do as part of the SEFA preparation process as it ensures that everything is being captured on the grant tracking workbook, which is then ultimately reported on the SEFA.
SEFA Schedule - The SEFA is just taking information from all the areas above and putting it into a nice, summarized format for the auditors to review.
The last step to do before calling the SEFA ready to submit, is to compare the total expenditures of Federal awards to the amount of Federal grant revenue on the trial balance. The revenue on the trial balance should match the SEFA. If it doesn’t, then I would compare the revenue reported to the PMS draw schedule and grant tracking workbook. It is most common that an accrual for the grant expenditures at the end of a period may have been missed. If that is the case, then make the associated accrual entry to record the grant revenue into the correct period. You are now ready to prepare your next SEFA with less stress and a solid approach. If your health center would like support with audit prep or the SEFA, please don’t hesitate to reach out to CLC.