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Single audits

Single audits. History, Purpose, and Improvements. Objectives. Today – You’ll get an overview of single audits You’ll be introduced to the OMB’s new grants management supercircular and its: administrative requirements cost principles, and audit requirements. OMB’s New Guidance.

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Single audits

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  1. Single audits History, Purpose, and Improvements

  2. Objectives Today – You’ll get an overview of single audits You’ll be introduced to the OMB’s new grants management supercircular and its: • administrative requirements • cost principles, and • audit requirements

  3. OMB’s New Guidance Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards • December 26, 2013 Document and the related crosswalks can be obtained at: http://www.whitehouse.gov/omb/grants_docs#final Document, crosswalks, slide shows, FAQs, and video discussion links can be obtained at: https://cfo.gov/cofar/

  4. Why Single Audit?

  5. Why Single Audit?

  6. Single audit Objectives and requirements

  7. SEFA Schedule of Expenditures of Federal Awards

  8. Single Audit Report

  9. Single Audit Finding

  10. Audit threshold (200.501) Subrecipient vs. Contractor (200.501(f) & 200.330) 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 Basic Structure of Single Audit

  11. Fixing Single Audits Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal AwardsDecember 26, 2013

  12. What’s Wrong?

  13. Objectives of uniform guidance • Eliminate duplication and conflicting guidance • Focus on performance over compliance for accountability • Encourage efficient use of information technology and shared services • Provide for consistent and transparent treatment of costs • Limit allowable costs to make the best use of federal resources • Set standard business processes using data definitions • Encourage non-federal entities to have family-friendly policies • Strengthen oversight • Target audit requirements on risk of waste, fraud, and abuse

  14. Structure of Uniform Guidance Subparts B, C, D are the Administrative Requirements

  15. EFFECTIVE DATES Federal agencies must implement policies and procedures by promulgating regulations to be effective December 26, 2014. Upon implementation, the guidance will be in effect for all Federal awards or funding increments provided after the effective date. Standards in Subpart F (Audit Requirements) effective for fiscal years beginning on or after December 26, 2014

  16. ADMINISTRATIVE Requirements (Subparts B, C, and D of the Uniform Guidance)

  17. Significant administrative reforms Not a Complete List

  18. COST PRINCIPLES (Subpart E of the Uniform Guidance)

  19. Significant cost principles reforms Not a Complete List

  20. Audit Requirements (Subpart F of Uniform Guidance)

  21. Audit threshold (200.501) Subrecipient vs. Contractor (200.501(f) & 200.330) 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 Basic Structure of Single Audit unchanged

  22. Single Audit Threshold • Increases audit threshold from $500,000 to $750,000 • Based on single audits submitted to the FAC for 2012, there would be approximately 6,200 fewer entities subject to a single audit, but there would only be a reduction in dollars covered of approximately $3.9 billion, or less than 1%

  23. 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 is increased from $300,000 to $750,000.

  24. Excluding large loan programs • 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 • Guidance related to a cluster of programs was modified as follows: • 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.

  25. Type A Program Risk Assessment Current default criteria: Revised default criteria : Not audited as a major program in 1 of 2 most recent audit periods In most recent period, had any of the following for program: Modified opinion Material weakness in internal control Known or likely questioned costs that exceed 5% of the total expenditures of the program Written request by Federal awarding agency to audit as major (180 days notice) • Not audited as a major program in 1 of 2 most recent audit periods • In most recent 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) Focuses risk assessment on whether the program received a modified opinion or material weakness over internal control, rather than less significant findings.

  26. Selecting high risk b programs

  27. Minimum coverage

  28. Low-risk auditee

  29. OMB Goals for Major program changes

  30. Compliance requirements No changes were proposed in the Final Guidance

  31. Current status of compliance requirements • Many commenters of the proposal were concerned about: • Uniform Guidance does not list compliance requirements • COFAR recommended further public outreach • Changes likely to be issued in 2015 Compliance Supplement

  32. Finding elements

  33. Single Audit Reporting

  34. Federal Agency Requirements

  35. summary

  36. Questions or Comments? Thanks for your participation!!!

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