What Is a Schedule of Expenditures of Federal Awards (SEFA)?

A Schedule of Expenditures of Federal Awards, or SEFA, summarizes the federal awards a nonprofit expended during its fiscal year.

For organizations subject to a Single Audit, the SEFA is a critical audit schedule. It helps the auditor understand the organization’s federal funding and determine which federal programs must be evaluated as major programs for detailed compliance testing.

The SEFA is prepared by the nonprofit—not by the auditor—and should be supported by the organization’s underlying accounting records.

What Information Belongs on a SEFA?

Under the Uniform Guidance, the SEFA generally includes:

  • individual federal programs grouped by federal agency;

  • the name of any applicable cluster of programs;

  • Assistance Listing Numbers, or ALNs;

  • total federal expenditures for each program;

  • the name of the pass-through entity when federal funds were received indirectly;

  • the identifying number assigned by the pass-through entity; and

  • amounts provided to subrecipients from each federal program.

The schedule must include the total federal awards expended as determined under the federal expenditure rules in 2 CFR 200.502.

Where Does the Information Come From?

A good SEFA should tie back to the nonprofit’s underlying accounting and grant records.

Common source documents include:

  • the general ledger;

  • grant agreements;

  • award letters;

  • reimbursement requests;

  • grant revenue schedules;

  • federal expenditure reports;

  • pass-through award documents;

  • subrecipient records; and

  • prior-year SEFA information.

Organizations should track federal awards by grant or program throughout the year rather than trying to reconstruct the SEFA after year-end.

What Is an Assistance Listing Number?

Each federal assistance program is generally associated with an Assistance Listing Number, sometimes abbreviated ALN.

The ALN helps identify the specific federal program associated with the funding.

For example, an award received from a state agency may still be federal funding if the state is acting as a pass-through entity. In that case, the award documentation should typically identify the underlying federal program and applicable Assistance Listing Number.

Organizations should not rely solely on the identity of the entity sending the payment when determining whether an award belongs on the SEFA.

What Is Pass-Through Funding?

Federal awards do not always come directly from a federal agency.

A nonprofit may receive federal funding through:

  • a state agency;

  • county or city government;

  • another nonprofit;

  • a university; or

  • another pass-through entity.

Those expenditures can still belong on the SEFA.

Uniform Guidance requires the SEFA to identify the pass-through entity and the identifying number assigned by that entity for federal awards received as a subrecipient.

What About Federal Funds Passed to Other Organizations?

If the nonprofit itself provides federal funds to subrecipients, the SEFA generally must disclose the total amount provided to subrecipients from each federal program.

This is different from ordinary vendor payments.

Determining whether another organization is a subrecipient or contractor can have significant compliance implications and should be evaluated carefully.

Why Does the SEFA Matter So Much?

The SEFA does more than summarize federal funding.

It directly affects the Single Audit.

Auditors use federal expenditure information in the SEFA as part of the process for determining which federal programs are considered major programs and therefore subject to detailed compliance testing.

If federal expenditures are omitted, assigned to the wrong program, or reported incorrectly, the audit team may initially select the wrong programs for testing.

That can result in:

  • additional audit work;

  • changes to major-program determination;

  • audit delays;

  • SEFA adjustments; or

  • potential findings if the organization’s federal reporting process is not operating effectively.

Current audit findings published through the Federal Audit Clearinghouse show that incomplete or inaccurate SEFAs can result in major-program determinations changing after the schedule is corrected.

Does the SEFA Equal Federal Grant Revenue?

Not necessarily.

This is an important distinction.

The SEFA reports federal awards expended, which may not equal:

  • federal cash received;

  • federal revenue recognized in the financial statements;

  • the total amount of grants awarded; or

  • the remaining balance on federal grants.

The Uniform Guidance contains specific rules for determining when federal awards are considered expended.

That means organizations should not simply take a federal grant revenue account from the income statement and assume it represents the SEFA.

How Should a Nonprofit Reconcile the SEFA?

The organization should be able to trace SEFA amounts back to its accounting records and explain differences between federal expenditures and related financial statement amounts.

A useful reconciliation may start with:

Federal grant revenue per the general ledger

and then adjust for items such as:

  • timing differences;

  • advances;

  • deferred or conditional amounts;

  • noncash federal assistance;

  • federal loans;

  • pass-through amounts;

  • subrecipient activity; or

  • other items treated differently under the federal expenditure rules.

The exact reconciliation depends on the organization and its awards.

When Should the SEFA Be Prepared?

Do not wait until the audit begins.

Organizations with federal awards should maintain the information needed for the SEFA throughout the year.

At year-end, management should ideally already know:

  • which awards are federal;

  • whether funding is direct or passed through;

  • the applicable ALNs;

  • expenditures by federal program;

  • amounts passed to subrecipients; and

  • whether total federal expenditures are approaching the Single Audit threshold.

Washington State Auditor guidance similarly emphasizes that the SEFA should be prepared carefully and include both direct and pass-through federal award expenditures.

Common SEFA Mistakes

Common problems include:

  • omitting federal awards received through a pass-through entity;

  • using cash received instead of federal awards expended;

  • missing or incorrect Assistance Listing Numbers;

  • reporting expenditures under the wrong federal program;

  • failing to identify clusters properly;

  • omitting amounts provided to subrecipients;

  • using incomplete grant documentation;

  • failing to reconcile the SEFA to underlying accounting records; and

  • waiting until audit fieldwork to determine which grants are federal.

Many of these issues can be prevented with better grant tracking throughout the year.

A Simple SEFA Example

A simplified SEFA might look like this: Federal Agency U.S. Department of Health and Human Services, Program U.S. Department of Housing and Urban Development

Total Federal Awards Expended$1,075,000.

In this simplified example, total federal awards expended exceed $1 million.

If the organization’s fiscal year began on or after October 1, 2024, that level of federal expenditures would generally trigger the Single Audit requirement.

Related Resource: When Does a Nonprofit Need a Single Audit? →

The Bottom Line

The SEFA is one of the most important schedules for a nonprofit receiving federal funding.

It tells the auditor which federal programs the organization participated in, how much was expended, where the funding came from, and how much may have been passed to subrecipients.

An accurate SEFA helps support:

  • correct Single Audit threshold determination;

  • accurate major-program selection;

  • efficient audit planning;

  • federal compliance reporting; and

  • a smoother Single Audit process.

The best approach is to build the SEFA from disciplined grant accounting throughout the year—not reconstruct it after the audit begins.

How Bilotta & Company Can Help

Bilotta & Company, CPAs, LLC provides financial statement audits and Single Audits for nonprofit organizations receiving federal awards.

We work with organizations to understand their federal funding environment, evaluate Single Audit requirements, identify SEFA information needs, and prepare for the audit process.

For nonprofits that need stronger year-round grant accounting, reporting, and financial infrastructure, our Nonprofit Navigator® Financial Stewardship program can also support ongoing accounting, controllership, compliance readiness, and financial leadership.

Related Resource: When Does a Nonprofit Need a Single Audit? →

Visit the Nonprofit Financial Resource Center →

This article is provided for general educational purposes and should not be considered accounting, legal, or federal grant compliance advice for a specific award or organization.