What is a SEFA? Schedule of Expenditures of Federal Awards Required by Code of Federal Regulations (2 CFR 200) Supplementary information to the basic financial statements (CAFR) Why is the SEFA necessary? Statewide Single Audit Volume 1– There is an opinion on SEFA in relation to financial statements SEFA serves as a basis for program testing selections in a compliance audit – the accuracy and completeness of the SEFA is critical Agencies are responsible for preparing their own SEFA– we can help! Our office performs procedures to verify each SEFA submitted is accurate and complete Statewide Grantor Schedule
Transcript
What is a SEFA?
Schedule of Expenditures of Federal Awards Required by Code of Federal Regulations (2 CFR 200) Supplementary information to the basic financial statements (CAFR)
Why is the SEFA necessary?
Statewide Single Audit Volume 1– There is an opinion on SEFA in relation to financial statements
SEFA serves as a basis for program testing selections in a compliance audit – the accuracy and completeness of the SEFA is critical
Agencies are responsible for preparing their own SEFA– we can help! Our office performs procedures to verify each SEFA submitted is accurate
and complete Statewide Grantor Schedule
SEFA Package Due: August 26
Instructions on website very detailed
Six “SEFA’s”
SEFA 1A (Cover Letter) SEFA 2 (Schedule of Expenditures of Federal Awards - Cash Programs)+Recon. SEFA 2-ARRA (Schedule of Expenditures of Federal Awards – Cash Programs) SEFA 3 (Schedule of Expenditures of Federal Awards - Noncash Programs) SEFA 4 (Schedule of Research and Development Expenditures) SEFA 5 (Notes to the Schedule of Expenditures of Federal Awards) SEFA 6 (Schedule of Subrecipients)
To get started…
SEFA1
Do you or do you not received federal awards? Either way, submit a letter. It is on the website. DUN. EIN. Agencies/Departments included.
Signed by the department head or their representative.
Accumulating Information for the SEFA
Things you will need to get started:
Prior year SEFA - emailed out recently (let us know if you need) eMARS Reporting 3.10 - Beginning balance for FY19 -
https://ebi41.ky.gov/BOE/BI/logonNoSso.jsp eMARS Reporting 3.11 - https://ebi.ky.gov/BOE/BI/logonNoSso.jsp CFDA – Catalog of Federal Domestic Assistance -
https://beta.sam.gov/search?index=cfda Controllers Website – blank forms and detailed instructions
Current Fiscal Year Activity – (Revenue and Expense)
2035 Definition – Report that shows all CFDA’s with current year activity for a department. (eMARS 3.11)
LOOK FOR: NEGATIVE EXPENSES AND POSITIVE REVENUES MISSING FEDERAL SUFFIX OR FEDERAL AGENCY
Run prior year ending balance (current year beginning) query in eMARS Reporting/EBI. Compare ending balances from prior year SEFA to current year beginning balances.
Plug data into SEFA2:
Know your federally funded programs! The majority of these are reported under Fund 1200 but there may be exceptions.
Run 2035. Under Statewide Reports (3.11)
Revenues and expenditures If the program is funded by a combo of federal and state or local funds, list
only federal share
List all CFDA in numerical order on tabs in excel for SEFA2. Are they still open program awards? Provide explanation for grants not reported anymore (in the notes section – SEFA5)
Look up the CFDA number from the Catalog of Federal Domestic Assistance website and enter the Federal grantor name and the program name.
Programs can be searched by CFDA # or keyword. Enter the program name from the CFDA website. Do NOT use the name
given to the program by the District or pass through agency. Use name closest to 6/30 date
SAMPLES
Department Big Toe
Department Big Toe received a new award, this fiscal year, for $500. Cash Receipts were $500 and expenditures were $500, leaving a zero balance at the end of the year. Department Big Toe has a loan program that began on October 1, 2018. The initial award received was $400. During the year, $200 was invested and a $100 loan was made (both under other deductions). Interest on investments of $30 was received (other additions). At June 30, 2019, the loan program had a cash balance of $130. Department Big Toe received a grant, for $750 that began October 1, 2007, and ended September 30, 2018. $100 was due from grantor at July 1, 2018. $250 in federal moneys was received during the year, $100 of federal expenditures were made, and $50 was passed through to Department Little Toe (state department).
Department Little Toe
Department Little Toe had a grant that began July 1, 2008, and ended June 30, 2019. Department Little Toe received $100 in federal money and received $50 as a pass through from Department Big Toe. Federal expenditures totaled $225 resulting in $75 due from grantor on June 30, 2019. Another grant began October 1, 2007, and ended September 30, 2019. Unearned revenue at July 1, 2018, was $25. $75 of federal moneys was received during the year. $15 of federal expenditures was made, and an ending balance of $85 as unearned grantor revenue remained. Another grant began October 1, 2007 and closed September 30, 2018 (ended during current fiscal year). Beginning Balance at July 1, 2018, was $25. During the fiscal year, $100 in federal money was received and $50 of federal expenditures was made. The remaining $75 in unexpended moneys was refunded to grantor during the period.
Reconcile the total revenues and expenditure to eMARS.
This helps make sure all federal activity is included on SEFA
SEFA3 – Noncash Programs
Most federal awards are in the form of cash awards. However, there are a number of federal programs that do not involve cash transactions.
Look at prior year schedule and verify all continued programs are still reported in current year
SEFA4 - Research and Development
1. Amount of expenditures related to research and development 2. Amount of expenditures not related to research and development 3. Total of all expenditures for each federal program
Coded in eMARS – List codes for each federal program Outside of eMARS – List explanation of the process
SEFA5 – Notes
If we have any questions, we come here first to see if there is an explanation Helps with reconciliation to eMARS
SEFA6 – Subrecipient
Subrecipient is a non-federal entity that expends federal awards received from a pass-through entity to carry out a Federal program, but does not include an individual that is a beneficiary of such a program.
Vendor means a dealer, distributor, merchant, or other seller providing goods or services that are required for the conduct of a Federal program.
BIGGEST DIFFERENCE IS SUBRECIPIENT CAN MAKE DECISIONS ABOUT THE GRANT MONEY
Build your own Payment Report to show the vendor name
Tools
Sub-recipient VS Vendor Checklist - https://www.agacgfm.org/Intergov/More-Tools/Subrecipient-vs-Contractor-Checklist.aspx
Another Tool
Please work your way through this checklist before submitting SEFA package. Please include with submission.
Agency SEFA Checklist
Complete
Review representation letter. Identify items that warrant disclosures in the notes. Include all agencies and verify the DUNS # and EIN are included on signed representation letter.
Verify all open grants reported in preceding year’s schedule(s) exist in the current year. Provide explanation(s) for any grant not reported.
Verify CFDA numbers are listed in numerical order.
Reconcile CFDA numbers/program titles to the CFDA Catalog.
Validate that the current year beginning balances agree with prior ending balances. Any differences must be explained.
Review schedules for completeness, correct flow, proper formatting (underlining, spacing, consistency, etc.), accurate math, and reasonableness.
Trace all pass through amounts listed on schedule(s) to the notes. Confirm reported pass through amounts with pass through agencies.
Verify the description of noncash programs is clearly defined.
Review SEFA6 to ensure entities listed are sub-recipients and not vendors. No state agencies, except state universities, should be listed on the sub-recipient schedule.
Determine if agency’s prior year notes are still applicable and verify current year information has been submitted.
Reconcile SEFA2 to eMARS.
Frequently Asked Questions
For SEFA regarding Pass Through amounts, do we net the total amount before looking at the sign to see where it would fall on the report, or should we break it down by cabinet or some other criteria? For example if DJJ’s total is negative but AOC’s total is positive for the same grant, do we keep them separate or net them to see where they would fall on the report?
o On the SEFA 2, it would be appropriate to net Pass Through amounts based on From (revenue) or To (expenditure). However, the SEFA 5 (Note 2 or 3) should list the Pass Through amounts by CFDA/Department. In the event the Pass Through From is a debit amount it would appear on SEFA 2 as Other Deductions and SEFA 5 (Note 5) should reference SEFA 5 Note 2. If the Pass Through To is a credit amount it would appear on SEFA 2 as Other Additions and SEFA 5 (Note 4) should reference SEFA 5 Note 3.
If a beginning balance adjustment does not change the total beginning balance of the CFDA, does that still require a note? If so, at what level would a beginning balance adjustment that nets out to zero, would a note not be required (ie CFDA, major program, program period, etc). For example, if two major programs fall under the same CFDA, and we make a net-zero manual adjustment to the beginning balance between those two major programs, are we required to make an official note about it?
o Beginning balance adjustments that net to zero for the CFDA do not have to be disclosed on SEFA 5 (Note 7). However, since these changes often relate to the program period and/or function it is recommended that the department keep adequate support that justifies the adjustments for the Auditor of Public Accounts. Period of Performance is required to be tested for most federal awards.
Should federal receipts passed through to other cabinets that are not the result of an actual drawdown appear on our SEFA? If so what column would they go in since they are not R600?
o Yes, if the receipts are federal and the Department/Cabinet did not receive the funds by delivering goods/services while acting in the capacity of a Vendor/Contractor. The funds could be receipted as a Pass Through From, if from another state agency, or as Other Additions. SEFA 5 (Note 2 or 4, respectively) should report additional information about those receipts.
Frequently Asked Questions (continued)
What is the rule for removing old grant periods from the report? Is there a set number of years it has to remain on the report after it is closed? And if we remove closed periods, do we need to make a note even if the balance was zero?
Further, does the balance of the closed grant affect the above requirements? For example if we have a grant with an ending balance from 10 years ago, can we remove it?
o There is not a specific rule for how long an old grant period should stay on the SEFA. If the grant period were closed, with a zero ending balance it would be recommended to remove that line from the SEFA 2. If the grant period has an ending balance, it is recommended leaving on the SEFA 2. Only when the Department/Cabinet decides it will not be able to recoup any outstanding balances should the line item be removed. Additionally, the grant period should not be removed if cumulative revenues exceeds cumulative expenditures. When this is the case, the Department should issue a refund and pay the grantor back the excess funds plus any additional interest that may have been earned.
