Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards Subpart F require all higher education institutions that receive and expend federal assistance totaling $750,000* or more during the entity’s fiscal year to have an annual audit performed by an independent (external) auditor. The single audit reporting package (including the audit report) must be submitted to the Federal Audit Clearinghouse (FAC) within 30 days after the institution receives its audit report or nine (9) months after the institution’s fiscal year-end, whichever comes first.
Audit criteria is established by the U.S. Office of Management and Budget (OMB) through issuance of the Compliance Supplement, which identifies potentially applicable compliance requirements that may be subject to audit. Use of the Compliance Supplement by the auditor is mandatory and the compliance supplement is updated annually to reflect changes and additions to program requirements.
Single audit objectives
Objectives of the single audit may include the following:
- Financial statements: determine whether financial statements of the entity are presented fairly in all material respects and in accordance with Generally Accepted Accounting Principles (GAAP)
- Compliance: determine whether the auditee has complied with federal statutes, regulations, guidelines and terms and conditions of the federal award that may have a direct and material effect on each of the entity’s major programs
- Internal controls: gain a sufficient understanding of internal controls over compliance, including testing operating effectiveness, to support a low assessed level of control risk for each major program
While not a main objective, stakeholders may use the single audit to determine risks of subrecipients, per Uniform Guidance 2 CFR 200.332. For additional information on use of the single audit to determine subrecipient risks, see Conducting pre-award subrecipient risk assessments.
Schedule of Expenditures of Federal Awards (SEFA)
The Schedule of Expenditures of Federal Awards (SEFA) is a financial statement prepared by an entity to report total federal expenditures during the fiscal year, including amounts where the entity is the prime entity and funds received as subrecipient from a pass-through entity. Not only is the SEFA a required component of the single audit reporting package submitted to the FAC, but also a document used by the external auditor to determine major programs. Auditors use a risk-based approach to identify which programs are required to be audited on an annual basis.
The SEFA must encompass the entire operations of the institution (e.g., program, school, department, etc.) and cover he same period as the institution’s basic financial statements. Expenditures on the SEFA are reported by individual federal programs and by federal agency, as signified by the Assistance Listing Number (ALN). For clusters of programs, the institution must provide the cluster name and list the individual federal programs that comprise the cluster with a subtotal for each cluster and a breakdown by the federal agency. The SEFA only includes expenditures for awards that are subject to 2 CFR Part 200, Subpart F. It does not include contracts for which an institution has not been deemed to be a subrecipient.
The following items are necessary to prepare a complete and accurate SEFA:
- Type of award (grant or contract)
- Reimbursement basis (cost or fixed)
- Name of direct sponsor (federal funding agency or pass-through entity as appropriate)
- Assistance listing number and associated federal program name
- Applicable cluster assignment for each award
- For pass-through awards, award ID assigned by the sponsor
- Total federal expenditures
- Total passed through to subrecipients
Is your institution ready for its single audit?
We can assist your institution in navigating the varying complexities of preparing for its annual single audit through a single audit readiness review or assessment.
