OMB Circular A-133

1. OMB Circular A-133 Audits of States, Local Governments and Non-Profit Organizations Cathi Bass, Grants Compliance Coordinator, Team Leader Sponsored Research Accounting Services CReATE5/2012

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