department of financial services · chapter 69i-5, f. a. c., state financial assistance 2019 rule...

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Department of Financial Services

➢ Introduction of Instructors

➢ Housekeeping

➢ Class Material

➢ Icebreaker

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Training Agenda

➢ FSAA Background

➢ SFA Flowchart, Checklists, Forms

➢ Exercise #1 – State Project Determination

➢ Exercise #2 – Recipient/Vendor Determination

➢ State Projects Compliance Supplement Overview

➢ 10 Compliance Requirements

➢ Exercise #3 – Compliance Supplement Form

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Authority

➢ Section 215.97, F.S., “Florida Single Audit Act”

➢ Enacted in 1998; effective July 1, 2000

➢ Mirrors Federal Single Audit Act

➢ Applies to local governments, non-profits, and for-profit organizations

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Amended Rule

Chapter 69I-5, F. A. C., State Financial Assistance

➢ 2019 Rule Amendment

➢ Florida Single Audit Act forms revised

➢ 215.97 FS & Federal 2 CFR Part 200 updated

➢ FSAA web page, Links/Forms tab provided

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Key Terms

➢ State Resources

➢ State Program

➢ Vendor

➢ State Awarding Agency

➢ State Project Compliance Supplement

➢ State Financial Assistance

➢ State Project

➢ Recipient

➢ State Single Audit

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Types of Financial Assistance

GrantsLoans

Grants

Insurance

Loan Guarantees

Property

Direct AppropriationsTax Refunds

Tax Credits

Cooperative Agreements

Food Commodities

Investments

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Background

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Requires recipients/subrecipients to have the single audit if they receive state financial assistance and expend $750,000 (effective 7/1/2016) or more during the nonstate entity’s fiscal year.

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Background

Exempt Organizations

➢ District School Boards

➢ Charter Schools

➢ Community Colleges

➢ State Universities

➢ Contractors operating state-owned facilities

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Background

Mirrors Federal Single Audit Act, some differences:

FSAA FEDERAL SINGLE AUDIT

10 Compliance Requirements 14 Compliance Requirements

For-profits Included For-profit Exempted

Tax Credit/Refunds= SFA Tax Credits/Refunds: N/A

Recipient/Vendor Checklist Preponderance of Evidence

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The Purpose of the FSAA

➢ To provide uniform state audit requirements

➢ To ensure sound financial management

➢ To increase audit economy and efficiency

➢ To verify adequate monitoring by state agencies

➢ To identify state financial assistance in state and

non-state entity’s accounting records

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Before Florida Single Audit

Reed Foundation for Kids, Inc.

State GrantsAgency Grant No.DCF 06-ADOPHHS EMS09

Federal Single Audit

Annual financial statements

Federal programs – CFDA #93.558, 93.556

Schedule of Expenditures of Federal Awards

1 audit

1 audit

1 audit

= 3 Audits!!

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After Florida Single Audit

Reed Foundation for Kids, Inc.

A. Annual financial statements

B. Federal financial assistance

CFDA #93.556

CFDA #93.958

C. State financial assistanceCSFA #60.017 – Grant #EMS09

CSFA #64.006 – Grant # 06-ADOP

D. Schedule of Expenditures of Federal Awards and State Financial Assistance (Combined)

1 Single Audit!

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Financial Reporting Packages

1. Include Financial statements

2. Furnish auditor reports (internal controls, project compliance)

3. Incorporate a management letter

4. Provide auditee's written responses or corrective action plan

5. Review correspondence on follow-up of prior years' corrective actions taken

6. Present a schedule of Expenditures of State Financial Assistance

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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND

STATE FINANCIAL ASSISTANCE

Federal / State Agency, Pass through entity, Federal Program / State Project

CFDACSFANo.

Contract/ GrantNo. Expenditures

FEDERAL AWARDS

U.S. Department of Agriculture

Passed through Florida Department of Education

National School Lunch Program 10.555 08-A6D4

$

513,135

Total expenditures of federal awards 513,135


Florida Dept. of Children and Families

Children’s Mental Health Juvenile Restoration 60.049 LH638 5,106,184

Florida Dept. of Juvenile Justice

Vocational Training Services 80.013 L8G02 1,806,361

Delinquency Prevention 80.011 DP544 3,997,639

Total expenditures of state financial assistance 10,910,184

Total expenditures of federal awards and state financial assistance $ 11,423,319

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https://myfloridacfo.com/

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Key Players


Auditor General

Independent (CPAs)

Coordinating Agency

State Agencies

Recipients/ Subrecipients

ACCOUNTABILITY

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➢ Administers Florida Single Audit Act

➢ Establish new rules

➢ Maintains Catalog & Compliance Supplement

➢ Reviews/audits state financial assistance

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State Awarding Agencies

➢ Identify state projects

➢ Determine recipient and vendor relationships

➢ Provide recipient information on FSAA

➢ Review financial reporting packages

➢ Determine the state coordinating agency

➢ Identify State Financial Assistance (SFA) in state accounting records

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Annual Agency Certification

➢ Review information in Catalog and the Supplement for accuracy and completeness

➢ Notify DFS of any additions, deletions, or revisions to state projects for the previous year

➢ Submit updates to the Catalog by September 1st

See “Links/Forms” on FSAA website for more info

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State Project Updates

Agencies are encouraged to submit updates for the new fiscal year as soon as possible.

➢ New projects

➢ Deleted projects

➢ Project title/other changes

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Coordinating Agency

➢ Reviews recipient audit reports to identify findings which affect all state projects

➢ Determines whether appropriate corrective action has been taken

➢ Notifies affected state agencies of recipient actions

Example: Internal control audit findings

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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE

FINANCIAL ASSISTANCE


CFDACSFANo.


FEDERAL AWARDS




$

513,135



Florida Dept. of Children & Families







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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE

FINANCIAL ASSISTANCE


CFDACSFANo.


FEDERAL AWARDS




$

513,135



Florida Dept. of Children & Families







5,804,000

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Recipients/Subrecipients

➢ Identify SFA in accounting records

➢ Arrange for state single audits

➢ Provide the FSAA information for the subrecipient

➢ Review the financial reporting package of the subrecipient

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Independent Auditors

➢ Perform single audits pursuant to Auditor General rules,

including an evaluation of internal controls

➢ Determine if each major state project complies with

Compliance Supplement requirements

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Auditor General

➢ Establishes audit standards and rules

➢ Provides technical assistance

➢ Performs audits and reviews

➢ Reviews financial reporting packages

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State Financial Assistance Flowchart

Research GAA,

Statutes, other

sources

State Project Determination

State Project

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Identifying State Projects

General Appropriations Act (GAA)

➢ Line item appropriations

➢ Grant and aid categories

➢ Proviso language (special purpose)

Supplemental Appropriations

➢ Analyze bills, clarify legislative intent

▪ Florida Statutes ▪ Agreements▪ Administrative Code

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Exercise 1: State Project Determination Checklist

Directions: Analyze the statute (pg. 2) and determine whether the state program is a state project by completing the checklist (pg. 3).

Section 381.989, F.S. – Health Education Centers

NOTE: The first page of the checklist is already completed. For this exercise, the program is not being funded by federal, state matching or maintenance of effort.

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State Financial Assistance Flowchart

Agency Requests New

CSFA for State Project

State Project

Recipient

vs. Vendor

Determination

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Recipients vs. Vendors

• Are served by the program

• Have accountability of funds

• May make programmatic decisions

• May have a match or MOE

• Must return residual funds

• Are required to have the State Single Audit if threshold is met

Recipients

• Are providing the program

• Do not have accountability of funds

• Do not make programmatic decisions

• Do not have a match or MOE

• May keep funds as profit

• Are not required to have the State Single Audit

Vendors

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Exercise 2: Recipient vs. Vendor Determination Checklist

Directions: Complete PART B of the checklist (pg. 8) for each contract.

#LUHECR9 – Lee University, Knight School of Medicine (pg. 5)

#FHCCV9 – South Florida Advertising, Inc. (pg. 6)

NOTE: Both contracts are under the Health Education Centers program (s. 381.989, F.S.), which was determined to be a state project in

Exercise #2. No federal, state matching, or Maintenance of Effort (MOE) funds are involved.

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Recipient and Subrecipient Requirements

Required to have combined federal and state single audit, if both thresholds are met

Required to return unobligated funds to the State, unlessauthorized to retain funds

Required to comply with the provisions of CFO Memo #3, (2014-2015)

Required to include standard contract language per CFO Memo #4 provisions in Subrecipient agreements

JEOPARDY GAME

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State Compliance Supplement

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State Project Compliance Supplement

➢ Acts as a Liaison

➢ Saves time

➢ Serves as notification

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➢ Part One: Background, Applicability, & Overview

➢ Part Two: Matrix of Compliance Requirements

➢ Part Three: Compliance Requirements

➢ Part Four: State Project Compliance Requirements

➢ Part Five: Internal Controls

➢ Part Six: Guidance for Auditing Projects Not Included in the Compliance Supplement

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Part One: Background

➢ If a state project is selected for audit, use of the Supplement is highly recommended.

➢ Adherence to the Supplement satisfies the audit requirements of s. 215.97, F.S.

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Part Two: Matrix of Compliance Requirements2017-2018

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Part Three: Compliance Requirements

➢ The 10 compliance requirements are found within the Florida Single Audit Act, per 215.97 F.S.

➢ The procedures for the audit are general and outline compliance requirements that may be tested.

➢ The judgment of the auditor is necessary to determine which compliance requirements will be tested.

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Part Four: State Project Compliance Requirements

➢ The compliance supplement provides objectives, procedures, and requirements specific to an individual project.

➢ The compliance supplement outlines the requirements necessary to complete audits of state financial assistance.

➢ The compliance supplement is mandatory. If it is not submitted, the Department of Financial Services will require an explanation.

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Part Four: State Project Compliance Requirements

598 State Projects

Only 521 have State Project Compliance Supplements 87%

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Part Five: Internal Controls

The compliance supplement provides objectives, procedures and compliance requirements specific to an individual project.

➢ It outlines the requirements necessary to complete audits of state financial assistance.

➢ It is mandatory. If not submitted, the Department of Financial Services will require an explanation.

➢ It provides objectives, procedures and compliance requirements specific to an individual project.

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Part Six: Guidance for Auditing Projects Not in the Compliance Supplement

➢ Projects without a supplement are forwarded to part six

➢ Part six provides limited project information for the CPA

➢ The State Agency determines the success criteria of the state project

➢ The completion of part six provides the CPA information to accurately assess the project

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Preparing the Compliance Supplement Form

(Part Four)

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General Information

➢ State Agency

➢ CSFA Number

➢ Project Title

➢ Completed by

➢ Phone/E-mail

➢ IG/AD Review

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Program Information

Program Objectives

Explains what will be accomplished in the program

Program Procedures

Describes how state financial assistance is awarded

➢ Includes references

➢ Provides other relevant information about the operation or administration of the state project

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Compliance Requirements

A. Activities Allowed or Unallowed

B. Allowable Costs

C. Cash Management

D. Eligibility

E. Equipment & Real Property Management

F. Matching

G. Period of Availability of State Funds

H. Reporting

I. Subrecipient Monitoring

J. Special Tests & Provisions

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Compliance Requirements

➢ Requirements are unique to each state project and are found in laws, rules, and provisions of contract or grant agreements

➢ DFS considers these to apply to each project:


B. Allowable Costs


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Examples

Allowable activities include health assessments, computer training and animal therapy

Unallowable activities include entertainment activities and meals

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B. Allowable Costs

➢ Allowable costs require that expressed or implied authority must be provided in order to expend state funds (AG Opinion 078-101)

➢ Allowable costs require that recipients and sub-recipients must

comply with the Reference Guide for State Expenditures, even if

the agreement is awarded on a fixed-price basis or competitively

procured under chapter 287, F.S.

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B. Allowable Costs

Example

Allowable Costs:

1. Travel expenditures

2. Speaker fees

3. Informational materials

Unallowable Costs:

1. Promotional items, refreshments, greeting cards

2. Travel costs unrelated to outreach activities

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C. Cash Management

Refers to cash advances, not a method of payment

➢ Agreements with advances may contain clause permitting recipients to temporarily invest proceeds

➢ Interest income returned to State or applied against agency’s obligation to pay the contract amount

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C. Cash Management

Example

Interest earned on cash advances provided by the State shall be returned to the department.

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D. Eligibility

Specifies the criteria for determining eligibility of:

1. Beneficiaries (individuals/groups of individuals);

2. Subrecipients that can participate in the project and the amounts for which they qualify

NOTE: Does not refer to recipient eligibility criteria (non-profits, for-profits, local governments)

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D. Eligibility

Examples

Clients between the ages of 3 and 17 attending the Stevens Educational Center are eligible for services.

Eligible subrecipients are for-profit, private businesses that employ less than 100 people with a revenue stream of less than $1 million.

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E. Equipment and Real Property Management

Specifies the use, management, and disposition of equipment and

real property

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E. Equipment and Real Property Management

Examples

➢ Upon purchase, laptop computers become the local

government’s property. Maintenance costs are the responsibility

of the local government.

➢ Non-expendable equipment costing $1,000 or more is subject to

agency property reporting requirements for the contract period.

Upon project completion, such equipment shall return to the

agency.

F.S. 273.02

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F. Matching

Specifies Matching Requirements:

➢ How match is computed

➢ How in-kind contributions are valued

➢ Types of expenditures or in-kind contributions that can be used to meet the match

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F. Matching

Example

A 10% local match is required

Eligible match sources include: Cash and in-kind service costs

Land value acquired under other state or federal grant land acquisition programs is ineligible

(Rule 69I-5.005 F.A.C.)

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Specifies the time period during which nonstate entity may obligate/expend state financial assistance

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Examples

➢ State Fiscal Year

➢ Contract/Grant Agreement Period

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H. Reporting

Verification of data contained in reports required of recipients and subrecipients

Types of Reports

➢ Financial – Revenue/expenditure reports

➢ Performance – Benchmarks

➢ Activity – Number of clients served

➢ Special Reports – Program-specific

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H. Reporting

Example

Recipient shall maintain individual participant files and attendance rosters to support the data in the annual Fiscal and Participant Report, which shall include:

➢ Actual number of enrollments➢ Actual number of participants successfully

completing each session➢ Total project expenditures (by expense category)

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Verify that the recipient/subrecipient monitored subrecipients per project requirements

➢ On-site visits

➢ Limited-scope audits

➢ Expenditure review

➢ Review subrecipient audit reports

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Example

Recipient shall conduct 1 on-site review of each subrecipient in the grant period, which includes:

➢ Programmatic review of all required contract deliverables and performance measures

➢ Expenditure review to ensure that grant funds were spent only for allowable costs

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J. Special Tests and Provisions

Types of Special Tests:

➢ Related-party transactions

➢ Professional qualifications

➢ State procurement guidelines

➢ Recipient vs. Vendor Checklist

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J. Special Tests and Provisions

Example

Compliance Requirement:

Corporations represented on the Board cannot receive over 65% of the total dollar amount of all contracts issued

Audit Objective:

Determine if recipient complied with laws for awarding contracts to corporations represented on the Board

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Exercise 3: Identifying Compliance Requirements

Identifying Compliance Requirements

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Updates to the Catalog & Compliance Supplement are

welcome throughout the year!

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➢ Section 215.97, F.S.

➢ DFS Rule 69I-5, F.A.C.

➢ FSAA website:

https://apps.fldfs.com/fsaa

➢ Auditor General Q&A:

http://www.myflorida.com/audgen/pages/flsaa.htm

➢ [email protected]

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department of financial services · chapter 69i-5, f. a. c., state financial assistance 2019 rule...

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