OMB Circular A-133

1. OMB Circular A-133 Audits of States, Local Governments and Non-Profit Organizations Cathi Bass, Grants Compliance Manager Sponsored Research Accounting Services CReATEMay 2013

2. General Purpose Provides standards for obtaining consistency and uniformity among Federal agencies for audits of States, local governments, and non-profit organizations expending Federal funds A-133

3. Applicability Entities that A-133 applies to: • Non-Federal entities that expend $500,000 or more in a year in Federal awards. Applies to both recipients and sub-recipients. • Non-Federal entities that expend less than $500,000 are exempt from audit requirements, but records must be available for review/audit by Federal agency, pass-through entity or General Accounting Office (GAO) Entities that A-133 does not apply to: • Non-US based entities expending Federal funds received directly or indirectly • Any private, for-profit company A-133

4. What is an A-133 (Single) Audit ? • A single comprehensive audit of a recipient’s financial statements and Federal funding • One annual audit, as opposed to each agency conducting their own individual audits • If a Federal agency conducts an additional audit, the agency must arrange for full funding A-133

5. Audit Coverage • Encompasses all State of Florida agencies • Performed annually and covers preceding fiscal year • University required to prepare a Schedule of Expenditures on Federal Awards by Catalog of Federal Domestic Assistance (CFDA) number • A CFDA is a number assigned to a Federal program in the Catalog of Federal Domestic Assistance A-133

6. Audit Methodology • A risk based approach is used to determine what programs to focus on: • Current and prior audit findings • New programs or those with regulatory changes • Inherent risk associated with the Federal program • Significant personnel changes • Audit procedures performed • Test internal control systems • Test financial statement accuracy and reliability • Identify and test compliance requirements of specific Federal programs • Oversight is provided by Federal agencies and pass-through entities A-133

7. A-133 Non-compliance Sanctions • Withhold a percentage of Federal awards • Withhold or disallow overhead costs • Suspend Federal awards until an audit is conducted • Terminate Federal awards A-133

8. Cognizant Agency • Recipients expending more than $50 million per year in Federal awards will have a cognizant audit agency • Generally, the agency is determined by who provides the predominant amount of direct funding • The cognizant agency serves as the point of contact for any audit activity related to a recipient of federal funds • U.S. Department of Health and Human Services is the cognizant audit agency for FSU/State of Florida A-133

9. Funding Federal Agency Federal Agency FSU Prime Recipient Other Entity Prime Recipient FSU Sub-recipient Other Entity Sub-recipient Other Entity Sub-recipient

10. Prime Recipient’s Responsibilities • Monitor sub-recipient compliance with A-133, if applicable • Sub-recipients that meet the criteria are required to obtain an A-133 audit and report to the prime recipient the results of that audit • Impose sanctions (discussed previously), if sub-recipient is unable or unwilling to have required audits or does not take appropriate corrective actions to findings • Scope of prime’s responsibility is limited to the sub-award only and does not extend to sub-recipient’s organizational and systems audits (handled by cognizant audit agency) A-133

11. FSU’s A-133 Audit • Performed by Auditor General’s Office, State of Florida • Coordinated by FSU’s Office of Audit Services • Prepares written response and corrective actions, with anticipated completion date, to audit findings • Copy of the audit report submitted to a Federal Audit Clearinghouse and is accessible at http://harvester.census.gov/sac/. • The clearinghouse sends a copy of the audit report to Federal agencies with grants on which there were findings A-133

12. FSU’s A-133 Audit • Audit report package must be kept on file for three years from date of receipt • Audit package includes: • Financial Statements and Schedule of Expenditures of Federal Awards • Summary Schedule of Prior Audit Findings • Auditor’s report • Corrective Action Plan • For awards for which FSU is a sub-recipient, FSU is required to: • Notify the prime agencies that an A-133 audit was conducted and whether there were any applicable findings related to the prime agency’s award A-133

13. Current Hot Button Topics • Cost Transfers • Cost Sharing • Effort Reporting • DS-2 Compliance • Final Reports • Sub-recipient Monitoring • Cost Accounting Standards (CAS) Exemptions A-133

14. Departmental A-133 Tips • Adhere to all terms of and conditions of awards • Adhere to all regulations, policies and procedures • Federal (OMB Circulars, various agency sites) • FSU (Controller, Purchasing, HR, etc.) • Research (http://www.research.fsu.edu/) • Departments must notify the Assistant Director for Compliance in SRAS when auditors are inquiring with PI/department staff • Refer agencies to SRAS • Keep track of questions and responses • Forward any A-133 letters/requests to SRAS A-133

15. QUESTIONS