A-133 Audit Requirements
In 1984 the Single Audit Act was enacted. This was to improve audit coverage of federal monies
In 1997 OMB issued revised Circular A-133, Audits of States, Local Governments and Non-Profit Organizations
Sets uniform standards for the audit of States, local governments, and non-profit organizations expending Federal awards
A-133 Audit Requirements
Requires audit of “non-Federal entities” expending more than $500,000 of Federal awards in a single year
If expenditures are all in one Federal program, may be “program-specific” audit
Otherwise, must be entity-wide Single Audit
Who performs the county Single Audit? Auditor of State (AOS), or
Independent Public Accountant (IPA) May be at county request or at AOS initiative
AOS must approve scope of audit and perform quality assurance review
What is the scope of an A-133 audit?
Review 14 compliance requirements which cover all concepts of the program
Review 50% of federal dollars/25% if low-risk auditee (but must cover all Type A high-risk programs)
Report questioned costs over $10,000 (actual or projected), material non-compliance and material internal control citations
“Major Program” Concept
Risk-based approach used to determine “major programs” to be audited
Requires identification of “Type A” and Type B” federal programs from Schedule of Federal Awards Expended
Six basic steps to identify programs to be tested: Identify Type A programs Determine “high risk” Type A programs
“Major Program” Concept
Identify Type B programs Select “high risk” Type B programs Replace “low risk” Type A programs with
“high risk” Type B programs Apply “percentage of coverage” rule at 50%
or 25%, as applicable
“Major Program” Concept
Total Expenditures from
Federal Schedule
Type A Programs
$500,000 to $10 million Greater than $300,000
$10 million to $100 million Greater than 3% of Federal Schedule
$100 million to $1 billion Greater than $3 million
“Major Program” Concept
Before County Family Services
Agencies
With County Family Services
Agencies
Federal Expenditures
$4,804,402 $18,943,714
Type A
Type B
“Major Program” Concept
Before County Agencies
With County Agencies
Federal Expenditures
$4,804,402 $18,943,714
Type A $300,000 $568,311
Type B $87,000 $87,000
Example – 2006 – As ReportedFederal Program CFDA Amount Type
Medicaid 93.778 $1,349,971 A - high
CDBG 14.228 1,081,098 A – high
WIA 17.258 862,268 A - low
Highway Planning 20.205 321,552 A - low
Homeland Security 97.067 226,883 B - high
Home Investment Partnership 14.239 216,318 B – low
Byrne Justice Assistance 16.738 152,457 B - low
17 Other Programs < 100k 593,855
Total Federal Awards $4,804,402
Example – 2006 – With County Agency Monies Included
Federal Program CFDA Amount TypeMedicaid 93.778 $3,717,224 A - high
TANF 93.558 3,665,351 A - high
Child Support (Title IV-D) 93.563 1,840,820 A - high
Foster Care (Title IV-E) 93.658 1,675,325 A - high
SSBG (Title XX) 93.667 1,145,455 A - high
CDBG 14.228 1,081,098 A - high
Child Care 93.575 929,237 A - high
SNAP 10.551 862,416 A - high
WIA 17.258 862,268 A - low
28 Other Programs <568k 3,164,520
Total Federal Awards $18,943,714
Hours and Cost
Factors that influence audit hours and cost: 14 Administrative Requirements
Applicable per AOS: Activities Allowed, Cash Management, Period of Availability, Reporting
May be Applicable per AOS: Allowable Costs, Eligibility, Equipment and Real Property, Matching, Procurement, Subrecipient Monitoring, Special Tests and Provisions
May not be Applicable per AOS: Davis-Bacon Act, Program Income, Real Property Acquisition/Relocation Assistance
Hours and Cost
Number of Case Files or Transactions Centralized Testing (RMS, Indirect Cost
Programs) Condition of Records Retrieval Time of Records
Cost
Cost of a Single Audit is an allowable reimbursable cost
County will be charged by AOS for time auditing county agencies
Proportion of cost will be allocated to each county department
A-133 Audit Report Components
An opinion on the financial statements A report on the county’s internal controls –
reportable conditions and material weaknesses
Information on a county’s compliance with program requirements along with findings and questioned costs
Could include a corrective action plan when there is an audit finding
The Auditor’s Assessment of Internal Control and Compliance Testing The Auditor will:
Identify your processes for administering “major” programs
Identify “key” internal controls Test key controls
Are the controls properly designed? Have the controls been placed in operation? Are the controls functioning as designed?
The Auditor’s Assessment of Internal Control and Compliance Testing The results of the Auditor’s tests of internal
control are used to assess control risk If control risk is low, the Auditor may reduce the
extent of testing If control risk is medium or high, the Auditor may
keep the extent of testing the same or increase the extent of testing
The Auditor’s Assessment of Internal Control and Compliance Testing How can you encourage the Auditor to
reduce the extent of testing? Document your processes and the related internal
controls Maintain good documentation of your activities
Establish and maintain an effective records retention process
Document reviews of records, checks, authorizations and supervisory reviews
Establish policies and procedures with reasonable flexibility
Common Issues
Missing case files Failure to monitor subrecipients Missing documentation in case files Improper claiming of building costs Non-compliance with procurement
requirements/failure to document
Common Issues
Improper claiming of equipment costs Improper charges in cost pools RMS issues Interfund transfers charged as costs
A-133 Audit Resolution
Within six months of receiving a copy of the county’s Single Audit, ODJFS must: Issue a management decision on whether it
sustains the audit finding(s) affecting their grant awards
The reason for its decision The corrective action the county must take along
with time frames
Initiatives to Prepare for County A-133 Single Audits Federal Grants Management Monitoring
Reviews, Technical Assistance and Training Plan New consulting-based monitoring reviews Technical assistance, including consulting
services Expanded training programs
Core Principles
Purpose is comprehensive and integrated model of technical assistance, training and monitoring, based upon eight core principles: Solution Oriented State and County Collaboration County to County Collaboration Differentiated Services
Core Principles, cont’d
Risk-Based Approach Integrated Technical Assistance, Training and
Monitoring Leveraging Resources Maximizing Use of Technology
Key Definitions
Technical Assistance – needs-based, focused and solution-oriented provision of technical knowledge, guidance and information to meet federal and state expectations Fiscal Services – financial accounting and
reporting issues Program Offices – program design and policy
development ORAA – process design and enhancement
Key Definitions, cont’d Training – broad-based, planned, structured
educational programs to communicate federal and state expectations, and methods to effectively and efficiently meet these expectations and improve performance
Division of responsibility by Fiscal Services, Program Offices, and ORAA would track that for technical assistance, noted above
Key Definitions, cont’d
Monitoring – risk-based reviews of county family services agencies administrative practices to gauge performance, provide information for improvement and identification of best practices, and identify training needs and provide technical assistance specific to the agency in question
Relationship of Training, Technical Assistance and Monitoring Training tells you what you need to know and
do to have successful federal grants management
Technical Assistance tells you how to do it Monitoring measures how well you do it and
identifies impediments to success
County Agency Needs
Support in navigating initial A-133 Single Audits
Guidance on existing known county issues County-specific consulting assistance on
request Assessment of the effectiveness of training
and technical assistance
Value-Added Services
It is challenging and necessary to provide value-added technical assistance, training and monitoring which benefits county agencies
Necessary characteristics include: Meet county agency needs for support and
guidance Assist county agencies in improving efficiency and
effectiveness of local operations
Value-Added Services, cont’d
Proactively assist counties in eliminating or reducing exposure to AOS A-133 Single Audit findings
Meet federal requirements for provision of technical assistance, training and monitoring
Eliminate ODJFS exposure to AOS A-133 Single Audit findings for inadequate county agency monitoring
Methods of Providing Technical Assistance Should vary by:
Size Available resources Preferences
Specific methods: Consulting services Technical and practice aids
Training Methods
Regional meetings on defined topics
Presentation at association conferences
Video training
Monitoring
Objectives:
Meet federal requirements
Promote good management in county agencies
Provide positive benefit to county agencies
Monitoring, cont’d
Components Guided Self-Assessments Risk Assessment On-Site Monitoring Reviews Technical Assistance Reports On-going Technical Assistance On-going Training
Implementation
Communicate plan to major associations OJFSDA OCDA PCSAO
Identify pilot counties Develop Guided Self Assessment Develop Monitoring Assessment Tool Develop Technical Assistance Report
Implementation, cont’d
Conduct initial assessments and reviews – underway
Issue initial Technical Assistance Reports - underway
Develop critical technical assistance materials - underway
Plan and develop critical training activities - underway
Conclusion
The state cannot do it all The state cannot achieve success by merely
passing responsibilities to the counties The state and counties can only succeed by
recognizing their shared responsibilities, within federal constraints, for administration of our federal programs