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Best Practices to Accurately Report LIHEAP and Weatherization Federal Funds on Schedule of Expenditures of Federal Awards

By Mark Perez, on May 17th, 2023

Under the requirements of the Uniform Guidance, organizations that spend $750,000 or more of federal funds within a fiscal year are required to have a Single Audit performed by an independent CPA. The Single Audit is distinct from a financial statement audit, as the focus is on compliance with federal program regulations. To prepare for a Single Audit, organizations need to compile their Schedule of Expenditures of Federal Awards (SEFA). The SEFA lists all federal expenditures by amount and program. The SEFA is used by the auditors to determine which federal programs need to be tested.

The accuracy of the SEFA reporting is critical. Many organizations within New York State (NYS) receive Weatherization Assistance for Low-Income Persons (Weatherization) and Low-Income Home Energy Assistance Program (LIHEAP) funding, passed through the New York State Division of Housing and Community Renewal (DHCR). Although these two programs need to be reported separately by recipients, DHCR passes the federal funds for both through a single funding stream. This can create confusion for organizations that may not know the amount of funding for each program or even that they received funds under more than one program.


Weatherization is authorized under Title IV, Part A of the Energy Conservation and Production Act and is administered by the U.S. Department of Energy. The Weatherization program’s main objectives are to improve the health and safety of low-income persons and reduce their total expenditures on energy. This is accomplished by improving the energy efficiency of their dwellings. In the funding process under this program, NYS submits an application that includes items such as a description of proposed projects, a budget and monitoring plan to the Department of Energy. Once the application is approved, NYS will receive the program funding and enter into sub-agreements through DHCR with local administering agencies. Common administration of Weatherization might involve installing energy efficient furnaces, water heaters and/or windows in eligible dwellings.


LIHEAP is authorized under Title XXVI of the Omnibus Budget Reconciliation Act of 1981 and is administered by the U.S. Department of Health and Human Services. The objective of LIHEAP is to help low-income persons by providing assistance with the costs of home energy needs. LIHEAP is a block grant program that provides states with the flexibility to design their own assistance program within general federal guidelines. NYS must administer its LIHEAP program in accordance with its approved plan and must establish policies and procedures to prevent and detect fraud or abuse.

Weatherization and LIHEAP Similarities in Program Funding

The Weatherization and LIHEAP programs are very similar in that they assist low-income persons with their energy needs and both are administered within the same payments from DHCR. A general rule of thumb to tell the difference between the programs is to think that Weatherization will help replace an old furnace (improvement of fixed assets) while LIHEAP will help pay a monthly utility bill (ongoing energy costs).

Often, organizations are not aware that they even received LIHEAP payments because they are disbursed from DHCR through the Weatherization funding stream. The programs are often administered together to allow greater impact to the community than each program could provide separately. This combined impact is critical in a time where it is estimated that lower income households spend 10% of their income on energy needs, creating what is called ‘energy poverty’.

Adding to the confusion in reporting is the fact that federal regulations of the LIHEAP program allow up to 15% of the LIHEAP funding to be spent for weatherization purposes (which can be expanded to 25% with a proper waiver).

Best Practices in SEFA Reporting

The best way to distinguish these programs and ensure accuracy when reporting them on the SEFA is to plan ahead. Understand your reporting deadlines and audit timing to know when to send an inquiry to DHCR, the single payor of both programs within NYS. A funding inquiry letter can be sent to DHCR at 641 Lexington Avenue, New York, NY 10022. DHCR’s response will provide detailed information regarding organization contract totals and funding streams for both programs, with respect to the time periods requested. This detailed information allows organizations to distinguish the separate programs and accurately report them on the SEFA. This allows for more accurate federal reporting annually and will improve efficiency of the Single Audit.

Want to Learn More?

Does your organization obtain Weatherization and LIHEAP funding from NYS DHCR and want to learn more best practices for these federal programs? We are here to help. Please do not hesitate to reach out to discuss your specific situation.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.

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Written By

Mark Perez Dec18
Mark Perez

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