1 / 106

Southeast Regional Professional Development Training Single Audit Update March 30 , 2016

Southeast Regional Professional Development Training Single Audit Update March 30 , 2016. The Who, What, When, Where, and Why of OMB’s Uniform Guidance. THE WHO, WHAT, WHEN, WHERE, AND WHY OF OMB’S UNIFORM GUIDANCE. Gerry Boaz, cpa , cgfm , cgma Technical Manager

woodalle
Télécharger la présentation

Southeast Regional Professional Development Training Single Audit Update March 30 , 2016

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Southeast Regional Professional Development Training Single Audit UpdateMarch 30, 2016

  2. The Who, What, When, Where, and Why of OMB’s Uniform Guidance

  3. THE WHO, WHAT, WHEN, WHERE, AND WHY OFOMB’S UNIFORM GUIDANCE • Gerry Boaz, cpa, cgfm, cgma • Technical Manager • TN. Comptroller of the treasury • Division of state Audit • Gerry.Boaz@cot.tn.gov • 615.741.5262 • Jerry e. durham, cpa, cgfm, cfe • Assistant Director • TN. Comptroller of the treasury • Division of local govnt. Audit • Jerry.durham@cot.tn.gov • 615.401.7951

  4. The Opinions expressed during this presentation are my own. They do not necessarily represent the views of the Comptroller, his representatives, or the Department of Audit.

  5. Single Audit Update Code of Federal RegulationsTitle 2, Subtitle a, Chapter II,Part 200Uniform Administrative Requirements, Cost principles, and audit requirements for federal awards

  6. Single Audit Update the New Uniform Grant Guidanceor uniform Guidanceor “ugg”or “Super Circular?”

  7. WHY?

  8. Why done? - Increase in Federal Grants Activity The Catalog of Federal Domestic Assistance lists over 2,000 Federal grant programs $600B $200B $91B $24B $7B

  9. Why Uniform Guidance? • Why do we have new guidance ? • Because the president said so • Because we asked for it • Just because • None of the above

  10. Why Uniform Guidance? • Reform of Federal Policies Relating to Grants and Cooperative Agreements; Cost Principles and Administrative Requirements • Result of over a year of work by federal / state / local / IG task force ordered by 11/23/2009 - E.O. 13520 “Reducing improper payments and Eliminating waste in Federal programs”; 2/28/2011 - Presidential memorandum “Administrative Flexibility, Lower costs, & Better results for state, Local and tribal governments”; and 7/26/2013 - OmB memorandum m-13-17, “Next step in the evidence and innovation agenda” • Goals : • Reduce fraud, waste and abuse • Increase cross-collaboration • Streamline reporting and adjudication of findings • Cut rules that are burdensome, ineffective etc. 10

  11. Why Uniform Guidance? • Why do we have new guidance ? • Because the old guidance wasn’t working • Because the old guidance was costing the federal government too much money • Because the old guidance was outdated • Because state and local governments had grown accustomed to the old guidance and knew how to get around the compliance requirements • Because state and local governments and their auditors love change • None of the above

  12. Why Uniform Guidance? • How many old circulars have been superseded ? • Seven (7) • Six (6) • Three (3) • Five (5) • Eight (8)

  13. Why Uniform Guidance? • Which of these old circulars was superseded by the uniform guidance? • Circular A-87, A-102, and A-133 • Circular A-133 • Circular A-122, a-102, and A-110 • Circular A-50, and a-21 • All of the above • None of the above

  14. Eliminated Duplicative and Conflicting Guidance Then: State or Local Government Now: All OMB guidance streamlined in 2 CFR 200.

  15. Superseded Guidance • A-133 Audits of States, Local Governments and Non-Profit Organizations (includes revisions published in the Federal Register 06/27/2003 and 06/26/2007) • A-87 Cost Principles for State, Local and Indian Tribal Governments (05/10/2004) • A-102 Grants and Cooperative Agreements With State and Local Governments (10/07/1994) (further amended 08/29/1997) • A-89 Catalog of Federal Domestic Assistance (08/17/1984) • A-110 Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations (11/19/1993) (further amended 09/30/1999 • A-21 Cost Principles for Educational Institutions (05/10/2004) • A-122 Cost Principles for Non-Profit Organizations (05/10/2004) • A-50 Audit Followup (09/29/1982)

  16. WHO?

  17. Who did this to (for) us? • Who prepared the uniform guidance ? • OMB (u.s. Office of management and Budget) • 26 federal agencies jointly • Cofar, (council on financial assistance reform) • Federal, state, and local governments along with omb • None of the above

  18. Council on Financial Assistance Reform (COFAR) www.cfo.gov/cofar http://www.whitehouse.gov/omb/grants_docs/

  19. WHEN?

  20. Effective Date(s) • When do the administrative (subparts a-d) and cost principles (subpart e) take effect? For awards received: • On or after December 26, 2014 • January 1, 2015 to December 31, 2015 calendar year • July 1, 2015 to June 30, 2016 Fiscal Year • An extended time for certain procurement provisions • All of the above • None of the above Q&A – 200.110-1 to 110-15

  21. Effective Date(s) • When do the Audit provisions (subPart f) become effective? For entity fiscal years “beginning” on or after: • December 26, 2014 • January 1, 2015 to December 31, 2015 calendar year • July 1, 2015 to June 30, 2016 Fiscal Year • All of the above Q&A – 200.110-1 to 110-15

  22. Effective Date(s) • Can an entity early implement the audit requirements? • Yes • No Q&A – 200.110-1 to 110-15

  23. Effective Date(s) • Can an entity early implement the administrative and cost principle requirements? • Yes • No Q&A – 200.110-1 to 110-15

  24. Effective Date(s) • How long is the grace period for the procurementstandards? • One year • Two years • Three years • All of the above • (A) and (B) Q&A – 200.110-1 to 110-15

  25. Effective Date(s) • Is it possible to have a grant that is subject to both (old) guidance and the (new) uniform guidance? • Yes • No Q&A – 200.110-1 to 110-15

  26. Effective Date(s) • A grant is awarded prior to December 26, 2014. A subaward was made from the grant after December 26, 2014. Is the subaward subject to the new uniform guidance? • Yes • No Q&A – 200.110-1 to 110-15

  27. Effective Date(s) • An indirect cost rate was negotiated prior to December 26, 2014 (E.G. October 2014) and is not scheduled to be renegotiated for three years in October 2017 (a date after December 26, 2014). Does the entity have to renegotiate the indirect cost rate when the new uniform guidance is effective for the entity (e.g. December 31, 2015) • Yes • No Q&A – 200.110-1 to 110-15

  28. WHAT?

  29. Comment Letter to OMB What We Asked For • Asked for $5,000,000 single audit threshold • Asked for Risk based awards • Asked for simpler method of determining major programs • Asked for Federal Agencies involvement in correcting findings • Asked for Seven Compliance Features instead of 14

  30. Basic Structure of Single Audit ProcessWhat Has Not Changed • Audit threshold (200.501). • Subrecipient vs. Contractor (200.501(f) & 200.330). • Biennial (200.504) & Program-specific (200.507) audits. • Non-Federal entity selects auditor (200.509). • Auditee prepares financial statements & SEFA(200.510). • Audit follow-up & corrective action(200.511 & 200.521). • 9 month due date (set in law) (200.512(a)). • Reporting to Federal Audit Clearinghouse (200.512). • Major programs determined based on risk (200.518). • Compliance Supplement overall format.

  31. Important Changes from old to new • Single audit threshold • Major program threshold • De minimis threshold for type b programs • Major program determination • Low risk auditee determination • Known and likely costs threshold • Communication between federal agencies and non-federal entities

  32. What? Subpart F – Audit Requirements

  33. What? - Audit Threshold (200.501) • The COFAR considered that raising the threshold would allow Federal agencies to focus their audit resolution resources on the findings that put higher amounts of taxpayer dollars at risk, thus better mitigating overall risks of waste, fraud, and abuse across the government. • Further, the COFAR notes that provisions throughout the guidance, including pre-award review of risks, standards for financial and program management, subrecipient monitoring and management, and remedies for noncompliance provide a strengthened level of oversight for non-Federal entities that would fall below the new threshold.

  34. What? - Major Program Determination 200.518 Major Program Determination focuses audits on the areas with internal control deficiencies that have been identified as material weaknesses. The Compliance Supplement reflects this focus as well.

  35. What? - Type A/B Threshold– Step 1 • Programs are grouped based on dollars. • Type A programs are those above the threshold. • Type B are those below the threshold. • Type A/B threshold is a sliding scale with minimum. • Minimum increases from $300,000 to $750,000. • Threshold presented in table to be more easily understood. • Audit threshold and Type A/B minimum threshold will be the same at $750,000.

  36. What? Type A/B Threshold – Table (200.518(b)(1))

  37. What? - Type A Threshold Change • Groupings are based on dollars — Type A programs are those above the dollar threshold, Type B are those below • The minimum threshold For type a programs is increased from $300,000 to $500,000.

  38. What? - High-Risk Type A Programs Changes –Step 2 OLD default criteria: • Not audited as a major program in 1 of 2 most recent audit periods • In most recent audit period, had any of the following for program: • Significant deficiency in internal control • Material weakness in internal control • Material noncompliance Finding • Has ARRA expenditures in current year • Written request by federal awarding agency to audit as major (180 days notice) NEW default criteria: • Not audited as a major program in 1 of 2 most recent audit periods • In most recent audit period, had any of the following for program: • Other than an unmodified opinion • Material weakness in internal control • Known or likely questioned costs that exceed 5% of the total expenditures ofthe program • N/A • Written request by federal awarding agency to audit as major (180 days notice) This change puts the focus of risk assessment on whether the program received a qualified opinion or material weakness over internal control, as opposed to whether the program received less significant findings that are not essential to the financial integrity of the program.

  39. What? - High-Risk Type B Program (200.518(d)) - (Step 3) NEW CRITERIA: • PERFORM RISK ASSESSMENTS ON TYPE B PROGRAMS UNTIL HIGH-RISK TYPE B PROGRAMS HAVE BEEN IDENTIFIED UP TO AT LEAST 25% OF NUMBER OF LOW-RISK TYPE A PROGRAMS • *subject to de minimis threshold Current A-133 criteria: • Currently there are two Type B risk assessment options: • Option 1 – Perform risk assessments on ALL Type B programs and select at least 50%of Type B programs* identified as high risk up to number of low-risk Type A programs • Option 2 – Perform risk assessments on all Type B programs* until as many high-risk Type B programs have been identified as there are low-risk Type A programs. • *subject to de minimis threshold

  40. What? - Percentage of Coverage Rule (200.518(f))(Step 4) • Guidance reduces the minimum coverage as follows:

  41. What? - Low-Risk Auditee 200.520 Criteria for a Low-Risk Auditee • Members of the audit community and states commented on the criteria for a low-risk auditee that includes whether the financial statements were prepared in accordance with GAAP. Members of the audit community note that GAAP is the preferred method, and states note that state law sometimes provides for other methods of preparation. The COFAR considered this and recommended revised language to allow for exceptions where state law requires otherwise. • If the state law permits but does not require other methods, then the auditee cannot be considered a low-risk auditee.

  42. What? - Low-Risk Auditee (200.520) NEW (2 PRIOR YEARS) • SAME. • Unmodified opinions on statements in accordance with GAAP or basis of accounting required by state law. • SAME. • SAME. • SAME • SAME. • NO AUDIT REPORTING OF GOING CONCERN. • NO WAIVERS. Current (2 prior years) • Annual single audits • Unmodified opinion on financial statements in accordance with GAAP • Unmodified SEFA in relation to opinion. • No GAGAS material weaknesses • In either of preceding two years, none of Type A programs had: • Material Weakness. • Material noncompliance. • Questioned costs that exceed 5%. • Timely filing with FAC. • Auditor reporting going concern not preclude low-risk. • Waivers.

  43. Small Government - A-133 Summary • threshold for Type A = $300,000 • De minimis Threshold for Type B = $100,000 • Total Federal Awards = $2,381,834 • Coverage Requirement = 50% = $1,190,917 • Low risk Auditee Threshold = 25% or $595,335 • Total Type A Programs = $1,492,198, Percent coverage = 63%

  44. Small Government - UG Summary • threshold for Type A = $750,000 • De minimis Threshold for Type B = ¼ = $187,500 • Total Federal Awards = $2,381,834 • Coverage Requirement = 40% = $952,734 • Low risk Auditee Threshold = 20% or $476,367 • Type B Program audit Requirement = 25% of Type A low risk programs • Total Type A Programs = $1,022,926 + any remaining High Risk type B program

  45. What? - Effect of Large Loan Programs • Circular incorporates the guidance on the inclusion or exclusion of large loan or loan guarantee programs in determining the Type A threshold that is currently in the Compliance Supplement • Circular modifies the guidance related to a cluster of programs • Rule – Large loan program exceeds four (4) times the largest non-loan program. exclude all large loan programs when determining type a major programs. (200.518) • A cluster of programs is treated as one program in determining Type A programs. For the purposes of excluding large loan programs in the determination of other Type A programs, a cluster of programs is not considered to be a loan program if the individual loan programs within the cluster comprise less than 50% of the expenditures of the cluster (200.518, 200.502)

  46. What? - Audit Requirements – Single Audits • Streamlining Types of Compliance • Tentative “keepers” (7) • Activities Allowed or Unallowed • Including “matching” and “period of availability” to verify allowability • Allowable costs/ Cost Principles • Cash Management • Eligibility • Reporting • Subrecipient Monitoring • Special Tests and Provisions

  47. What? - Audit Requirements – Single Audits • Streamlining Types of Compliance (cont.) • Tentative eliminations (7) • Davis Bacon • Equipment and Real Property Management • Matching, Level of Effort, and Earmarking • Period of Availability of Federal Funds (except where tested to verify allowable/unallowable costs) • Procurement and Suspension and Debarment • Program Income • Real Property Acquisition & Relocation Assistance

  48. 2015 Compliance Supplement Matrix

  49. What is Required? • The uniform Guidance is divided into how many subparts? • Five (5) • Three (3) • Twelve (12) • None of the above

More Related