By Dwight Buracker, CPA, CVA

As our government clients strive to optimize the way they manage finances, compliance with Office of Management and Budget (OMB) requirements is critical.

When it comes to the Schedule of Expenditures of Federal Awards (SEFA), it’s important to implement procedures that ensure an accurate and complete SEFA. Failure to demonstrate compliance with OMB requirements is common but often unintentional. The source of the problem is typically a lack of communication or misunderstanding of compliance requirements.

The Government Finance Officers Association (GFOA) recommends that governments subject to the Single Audit Act do the following to ensure proper compliance:

Create an electronic repository of relevant grant information.

This file should be accessible to anyone involved in preparing the SEFA or administering the grants.  At a minimum, this repository should contain the following for each federal grant:

  • Grant agreement and notice of the award, as applicable
  • Type of grant (e.g., reimbursement basis or structured payments)
  • Program name and cluster title (if applicable)
  • Name of federal funding agency
  • Pass-through entity (if applicable)
  • Assistance listing number (formally known as the CFDA number)
  • Pass-through entity identifying number (if applicable)
  • Amount passed through to each subrecipient (if applicable)
  • Award amount
  • Award date
  • Match requirement (if applicable)
  • Period of performance

Maintain consistent accounting for SEFA and general financial statements

Your SEFA, of course, should be prepared in a timely and accurate manner. To accomplish this, the GFOA recommends:

  • Preparing a monthly reconciliation of expenditures in the general ledger. If expenditures reported in the SEFA differ from expenditures reported in the general ledger (due to outstanding loan balances, timing of grant awards, expenditures incurred in a prior period, etc.), a reconciliation should be included in notes to the SEFA.
  • Including grant-specific coding in the charts of accounts to easily identify eligible expenditures.
  • Reviewing grants included in the previous year’s SEFA to determine if they should be included in the current year SEFA.
  • Ensuring that the Single Audit is submitted to the Federal Audit Clearinghouse in accordance with Federal guidelines.

Take a Proactive Approach

Preparing a SEFA in accordance with OMB requirements calls for a proactive plan.

Because these considerations can demand significant training, time, and effort, the experts at PBMares can simplify and streamline the process for you. Contact us today for a complimentary consultation.

 

[1] The complete list of Best Practices for a SEFA Preparation from the GFOA can be found here.