tuesday, may 5 | columbia - mocpa home · 1 2015 governmental audit quality center (gaqc) annual...
TRANSCRIPT
Tuesday, May 5 | Columbia
Missouri Society of Certified Public Accountants
WORKBOOK
SCHOOL AUDIT CONFERENCE | MAY 5 | HOLIDAY INN SELECT EXECUTIVE CENTER | COLUMBIA, MO
Agenda
8:00 a.m. Registration and Continental Breakfast 8:30 a.m. GAQC Update:
Upcoming Changes in Standards and Avoiding Governmental Audit Quality Issues Michael G. Wolfe, CPA, Partner, BKD, LLP, Springfield 10:10 a.m. Refreshment Break 10:20 a.m. Federal Programs Tiered Monitoring Pat Kaiser and Angie Nickell, DESE, Jefferson City 11:30 a.m. Pension Disclosures Lori Woratzeck, CPA, CFO, and Anita Brand, CPA, The Public School and Education Employee Retirement Systems of Missouri, Jefferson City, MO 12:00 p.m. Networking Lunch 12:45‐1:35 Breakout Sessions A (please choose one. A2 runs until 2:35)
A1 Attendance Reporting and Verification Jennifer Jordan and Tammy Lehman, DESE, Jefferson City
A2 Changes to Single Audits and Federal Grants (continues through B2) Katherine Girgis, RubinBrown LLP, Overland Park and Brandi Lawyer, CPA, RubinBrown LLP, St. Louis 1:45 – 2:35 Breakout Sessions B (please choose one. Note that B2 is a continuation of A2)
B1 Desk Reviews Toni Wade, CPA, DESE, Jefferson City
B2 Changes to Single Audits and Federal Grants ‐ Continuation of A2 Katherine Girgis, RubinBrown LLP, Overland Park and Brandi Lawyer, CPA, RubinBrown LLP, St. Louis 2:45 – 3:35 Breakout Sessions C (please choose 1 session)
C1 Food and Nutrition Services Update Karen Wooton, DESE, Jefferson City
C2 Fraud & the Bottom Line Nate Bibens, Assistant Vice President, Treasury Management Officer, UMB Bank, Springfield
3:45 p.m. New OMNI Regulations for Auditors Toni Wade, DESE, Jefferson City 4:35 p.m. Adjournment
SCHOOL AUDIT CONFERENCE | MAY 9 | HOLIDAY INN SELECT EXECUTIVE CENTER | COLUMBIA, MO
Speakers
Christina Acton, CPA ‐ Christina Acton is an audit supervisor at Schowalter & Jabouri, P.C. in St. Louis. She conducts internal and external audit engagements for governmental, nonprofit, and public organizations and works with clients ranging from small and mid‐sized organizations to large corporations. Anita Brand, CPA ‐ Anita Brand is the director of investment accounting and operations for the PSRS/PEERS in Jefferson City where she is primarily responsible for their financial reporting and operations. Nathan Croll, CPA ‐ Nathan Croll is a manager in RubinBrown LLP’s Business Advisory Services Group in St. Louis. He is responsible for leading engagements that help clients manage business operations and assess control environment risks. James Grimes, CIA, CFE ‐ James Grimes is a manager in RubinBrown LLP’s business advisory services group in St. Louis. He specializes in Sarbanes‐Oxley requirements, internal accounting controls development and execution, and internal audit assisting companies in developing and executing their internal audit plan within outsourcing and co‐sourcing capacity. Jennifer Jenkins, CPA ‐ Jennifer Jenkins is a senior auditor at Schowalter & Jabouri, P.C. in St. Louis. She conducts internal and external audit engagements for governmental, nonprofit, and public organizations and works with clients ranging from small and mid‐sized organizations to large corporations. Jennifer Jordan ‐ Jennifer Jordan is the assistant director of school finance for the DESE in Jefferson City. Pat Kaiser ‐ Pat Kaiser serves as the director of the DESE’s Office of Financial and Administrative Services in Jefferson City. She oversees fiscal requirements for programs under No Child Left Behind. Tammy Lehmen ‐ Tammy Lehmen is a school finance consultant with the DESE in Jefferson City where she focuses on the Basic Formula, Classroom Trust Fund, Small Schools Grant, and Prop C payments and ensuring the data used in those calculations are reasonable and correct. Angie Nickell ‐ Angie Nickell serves as the director for special education finance with the DESE in Jefferson City. She supervises and coordinates the financial functions of the Office of Special Education and oversees payment of state and federal funds to Local Education Agencies (LEAs) for services provided to students with disabilities. Tim Rooney, CPA ‐ Tim Rooney is the chief financial officer for the Rockwood School District in St. Louis. He has worked as a school district administrator in accounting and finance including time as an auditor in the Missouri State Auditor’s office and the St. Joseph, Excelsior Springs, and Shawnee Mission, Kansas school districts. Daniel Steinbruegge, CPA ‐ Daniel Steinbruegge serves as the director of finance for the Rockwood School District in St. Louis. Prior to Rockwood, he was in public accounting auditing school districts and also an accounting supervisor. Toni Wade ‐ Toni Wade is the accounting audit analyst in the division of financial and administrative services of the DESE in Jefferson City. Previously, she worked for the Missouri State Auditor’s Office. Ted Williamson, CPA ‐ Ted Williamson is a partner in RubinBrown LLP's assurance services group in St. Louis where he primarily focuses on clients in the public sector, not‐for‐profit, and college and university sectors. Karen Wooton ‐ Karen Wooton is the school food services section coordinator for the DESE in Jefferson City. Lori Woratzeck, CPA ‐ Lori Woratzeck is the chief financial officer for PSRS/PEERS in Jefferson City where she oversees all accounting and financial reporting functions of the systems. She has also held accounting management positions in several school districts including the Mexico (MO) Public Schools, the Kansas City Missouri School District, Denver Public Schools, and Jefferson County (Colorado) Public Schools.
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2015 Governmental Audit Quality Center (GAQC)Annual Update
May 5 2015May 5, 2015Originally Broadcast April 28, 2015Reproduced with permission from the AICPA
Program Objectives
This Webcast will:• Provide information to help you plan your 2015 auditsProvide information to help you plan your 2015 audits
• Provide a high-level briefing on the activities of standard-setting bodies and regulators
• Discuss common quality issues and tips for avoiding them
• Increase awareness of the resources to help you maintain or improve your audit quality
Governmental Audit Quality Center
This Webcast will NOT:• Provide in-depth discussion on every topic area since
it is intended to build awareness of key topics and tips for where to look for more guidance
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Today’s Speaker
Mike Wolfe, CPA Partner
BKD, LLP, Springfield, MOMember, GAQC Executive Committee
Governmental Audit Quality Center 3
GAQC Update
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GAQC Update
Approximately 1,825 member firms representing 50 states, District of Columbia and Puerto Rico
26 State Audit Organizations (SAO) have joined to date• AK, AR, CA, DE, FL, GA, IA, ID, IL, LA, MA, MI, MN, ND, NH,
NM, OH, OK, OR, PA, RI, SD, TX, UT, VA, WV
Member Firm Coverage in the Federal Audit
Governmental Audit Quality Center
e be Co e age t e ede a ud tClearinghouse Database• 91% of federal dollars• 61% of number of audits
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Member Value and Improving Quality
Technical Technical guidanceguidanceTechnical Technical guidanceguidance
GAQCGAQCGAQCGAQC
CommunicationCommunication
(Alerts and Web (Alerts and Web events) events)
CommunicationCommunication
(Alerts and Web (Alerts and Web events) events)
Resources Resources and Practice and Practice
AidsAids
Resources Resources and Practice and Practice
AidsAids
Governmental Audit Quality Center
GAQCGAQC
MembersMembers
GAQCGAQC
MembersMembersAdvocacyAdvocacyAdvocacyAdvocacy GAQC Web GAQC Web
sitesiteGAQC Web GAQC Web
sitesite
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T h i l U d tTechnical Update
Technical Update Overview
Current Environment
AICPA• Auditing Standards Board
State and Local Governments (SLG)• Governmental Accounting
Standards Board (GASB) • Ethics
• Peer Review
Government Accountability Office (GAO)
Single Audits• Uniform Guidance
( )matters
• AICPA A&A Guide
Not-for-Profit Organizations (NFP)• Financial Accounting
Standards Board (FASB)
Governmental Audit Quality Center
• 2015 Compliance Supplement
• AICPA Audit Guide
For-Profit Compliance Audits
matters
• AICPA A&A Guide
Common deficiencies, best practices, tips, resources!
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Current Environment – Setting the Stage –Financial Statement Audits
Consider effect of current environment on your financial statement audits• Continued fiscal stress (even though economy coming back, not
fast enough for some entities!)
• Client revenue recognition issues?
• Public pension challenges (funding issues, new GASB standards)
• FASB developments for NFPs
• SEC interest in municipal issuers and related disclosure
Governmental Audit Quality Center
SEC interest in municipal issuers and related disclosure
• Don’t ignore fraud risk
• State and local government financial statement audits are an emphasis area in peer review
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Current Environment – Setting the Stage –Single Audits
Consider effect of current environment on your single audits• Challenging implementation of the Uniform AdministrativeChallenging implementation of the Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (UG or Uniform Guidance)
- Timing complexities and transitional issues
- Uncertainty in some areas (e.g., designing/updating controls, agency differences, etc.)
• Future OMB study of audit quality required in 2018 by UG
K thi i i d UG i l t d ill di
Governmental Audit Quality Center
- Keep this in mind as UG implemented; will discuss more later
• Other regulator scrutiny
- Quality Control Reviews (QCRs) and Desk Reviews
• Single audits are a “must select” area in peer review
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AICPA - Auditing Standards Board (ASB)
Group Audits - Can still be challenging• Two prior GAQC archived Web events still relevant; (1) Group Audits: A
Look Back One Year Later and Lessons Learned, and (2) Understanding the Potential Impacts of the New Group Audits SAS on Your Governmental and Not-For-Profit Audit Engagements
SSARS No. 21, Statements on Standards for Accounting and Review Services: Clarification and Recodification (or see Executive Summary)• Effective for periods ending on or after December 15, 2015 with early
implementation is permitted
GASB Pension Related Interpretations
Governmental Audit Quality Center
• Interpretation No. 2, "Auditor of Governmental Agent Multiple-Employer Pension Plan," of AU-C section 805, Special Considerations - Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement (June 2014)
• Interpretation No. 3, "Auditor of Participating Employer in a Governmental Agent Multiple-Employer Pension Plan," of AU-C section 500, Audit Evidence (June 2014)
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AICPA - Ethics
New Professional Code of Conduct issued in June 2014; effective December 15, 2014
M f i dl d i t iti l d• More user friendly and intuitively arranged • No significant changes to existing requirements and restrictions• Incorporates conceptual framework approach• Find more information
Actively involved in investigating referrals from federal agencies on poor quality auditsTask force assembled to review and update Ethics
Governmental Audit Quality Center
pInterpretation 101-10, The Effect on Independence of Relationships With Entities Included in the Governmental Financial Statements• Just an FYI….will not affect 2015 engagements
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Enhancing Audit Quality Initiative• Discussion Paper
2015 Risk Areas:• Evaluation of independence
as it relates to nonattest
AICPA - Peer Review
Discussion Paper
• Archived Webcast
• Forum
• Article
• Practice Aid Establishing and Maintaining a System of Quality Control for a CPA Fi ’ A ti d
services
• Evaluation of client and specialist skills, knowledge and experience (SKE)
• Sufficiency of audit evidence, in particular sampling, risk assessment,
Governmental Audit Quality Center
Firm’s Accounting and Auditing Practice (Free)
Future of Practice Monitoring Project
p gand internal controls
• Employee Benefit Plans, including ESOPs and government pensions
• Municipal security issuers
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AICPA Resources
Audit and Attest Section of AICPA Web Site
Peer Review Section of AICPA Web Site
Ethics Section of AICPA Web Site
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GAO – Past Year ActivitiesNothing new with Government Auditing Standards (Yellow Book)
New GAO Green Book Standards for InternalNew GAO Green Book, Standards for Internal Control in the Federal Government• Effective for fiscal years beginning FY16; early
adoption permitted by management
• Leverages the COSO Framework but written for government
Governmental Audit Quality Center
• Permitted (not required) as a framework for State, Local, Non-for-profit
Why important for this audience?• UG identifies it (or COSO) as a best practice for non-federal
entities (will discuss in more detail in single audit section)
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GAO – Government Auditing Standards (Yellow Book) Common Audit Deficiencies
Yellow Book independence deficiencies• Failure to document the evaluation of management’s skills,
knowledge, or experience to effectively oversee nonaudit services performed by the auditor
• Failure to document threats to independence that require the application of safeguards, along with the safeguards applied, in accordance with the conceptual framework for independence
• Keep in mind a focus area for peer review
Failure to meet Yellow Book CPE requirements
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Failure to meet Yellow Book CPE requirements
Failure to meet Yellow Book peer review requirements
Yellow Book reporting deficiencies
Use resources on next slide to avoid!
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GAO/GAQC Yellow Book Resources GAQC Government Auditing Standards Tools and Aids Web Page
Archived GAQC Web event, Audit Quality Discussion Part II: Avoiding Common Deficiencies in Yellow Book and Single Audits
Archived GAQC Web event, The Yellow Book: A Hodgepodge of Related Topics From a Practitioners Perspective, various Yellow Book topics and commonly asked by our members.
GAQC practice aid titled, 2011 Yellow Book Independence—Nonaudit Services Documentation Practice Aid
Archived GAQC Web event, Understanding the AICPA's Yellow Book Independence Practice Aid for Performing Nonaudit Services
Governmental Audit Quality Center
Ethics comparison of AICPA standards versus GAO
GAO Guidance on Requirements for GAGAS Continuing Professional Education (http://www.gao.gov/assets/80/76894.pdf)
GAO hotline - [email protected] or call (202) 512-9535
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Single Audit – Uniform Guidance Timeline to Date
October 2011 – Council on Financial Assistance Reform (COFAR) created
December 2013 – Final UG issued
January 2014 – 1st COFAR Webcast
February 2014 – 1st COFAR Frequently Asked Questions (FAQ) issued
August 2014 – 2nd COFAR FAQs Issued
October 2014 – 2nd COFAR Webcast
Governmental Audit Quality Center
November 2014 – Minor Update to COFAR FAQs
December 2014 – Joint Interim Final Rule Issued (including agency implementation and technical corrections)
Spring 2015 – Compliance Supplement?18
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Single Audits – Uniform Guidance - The Most Important Items to Understand for 2015
Timing of Requirements• 2015 single audits performed under Circular A-133 affected
• New Uniform Guidance audit requirements do not kick in until 12/31/15 year-end single audits
• Effective date to be challenging for compliance testing
2015 OMB Compliance Supplement will be key
Some federal agencies may have adopted differences in certain requirements
Governmental Audit Quality Center
Internal control uncertainties
“Should” usage different than under AICPA clarity standards
Beware of requests for internal control certifications
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Single Audit – Uniform Guidance - Effective Dates/Timing
Federal agencies must implement policies and procedures by promulgating regulations to be effective December 26, 2014December 26, 2014• Accomplished with issuance of recent Joint Interim Final Rule
Non-federal entities will need to implement the new administrative requirements and cost principles for all new Federal awards made after December 26, 2014, and to additional funding to existing awards (referred to as funding increments) made after that date• Non-federal entities wishing to implement entity-wide system
Governmental Audit Quality Center
changes to comply with the guidance after December 26, 2014, will not be penalized for doing so
Audit requirements effective for fiscal years beginning on or after December 26, 2014• Not permitted to early implement any of the audit provisions
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Single Audit – Uniform Guidance Effective Dates/Timing
March 31, 2015, June 30, 2015, and September 30, 2015 year-ends• Non-federal entities will have to adopt new administrative requirements
d t i i l l ti t ll f d l d d t f diand cost principles relating to all new federal awards and to funding increments to existing awards
• Single audit requirements continue to use “old” regulation
• Auditor compliance testing will be affected by client adoption of “new” requirements (i.e., will likely have to test some awards subject to the “old” requirements and some the “new” requirements)
December 31, 2015, year-ends and beyondNew single audit requirements apply
Governmental Audit Quality Center
• New single audit requirements apply
• Auditors may have to test some awards subject to the “old” requirements and some the “new” requirements for several years
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Single Audit – Uniform Guidance Effective Date/Timing and Funding Increments(COFAR FAQ .110-13 and 13)
UG applies to funding increments to existing awards in cases where the federal agency considers the funding increments to be an opportunity to modify the terms and conditions of the award.
Existing federal awards that do not receive
Governmental Audit Quality Center
incremental funding with new terms and conditions will continue to be governed by the terms and conditions of the federal award.
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Single Audit – Uniform Guidance Effective Date/Timing and Pass-Through Awards? (COFAR FAQ .110-11)
Subrecipients and subawards• The effective date of the UG for subawards is
the same as the effective date of the federal award from which the subaward is made
• The requirements for a subaward, no matter when made, flow from the requirements of the
Governmental Audit Quality Center
original federal award from the federal awarding agency
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Uniform Guidance – Sampling of Key Client Requirements
New/Revised Cost Principles
New/Revised Administrative Requirementse / e sed d st at e equ e e ts
Indirect Costs (10% deminimis)
Procurement changes (one-year delay has been provided)
Subrecipient Monitoring Requirements enhanced
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Single Audit – Uniform Guidance - 2015 Compliance Supplement
2015 Supplement will be used for audits performed under Circular A-133 and the Uniform GuidanceFederal workgroups working to develop new and
d t d idupdated guidanceThere will be two Part 3 sections in 2015• One for testing awards subject to UG administrative and cost principle
requirements• One for testing awards subject to “old” rules• Transitional information will be included
Reduction in compliance requirements• Not as significant as might think
Governmental Audit Quality Center
Parts 4 and 5 may be affected as wellGAQC Web event on the Supplement to be held on June 10, 2015, from 1:00 – 3:00 PM; watch for registration information
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Single Audit – Uniform Guidance - Joint Interim Final Rule
Incorporates federal agency implementing regulations • Some agencies making revisions to UG (e.g., DoD)
Also includes technical corrections • Some “shoulds” changed to “must”
Effective December 26, 2014
Very dense; need to read carefully
Governmental Audit Quality Center
GAQC Alert #268 includes more detail
Bottom line: Auditors need to understand agency differences to perform your single audits
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Single Audit – Uniform Guidance – Internal Controls
Internal Controls (section XXX.303).
The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” [Green Book] issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Governmental Audit Quality Center
OMB has stated that the should is meant to be a “best practice” and not a presumptively mandatory requirement.
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Single Audit – Uniform Guidance – Internal Control
Part 6 in 2015 Supplement not likely to be updated for COSO or the Green Book (may even be removed?)• Auditees (and auditors) better off looking to
COSO or Green Book
• Working group of federal agencies, auditees, and auditors to make substantive updates to Part 6
Governmental Audit Quality Center
• Not likely to occur until 2016
• In the meantime, uncertainty around expectations for nonfederal entities and their auditors in this area
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Single Audits – Uniform Guidance – Planning Will be Key
Planning Considerations Will be Different for Various 2015 Year-EndsVarious 2015 Year Ends• March, June, September 2015 Year-Ends
• December 31, 2015, Year-Ends and Beyond
Key Action Item – View Archived GAQC Web Event, Uniform Guidance for Federal Awards: Auditor Planning Considerations
Governmental Audit Quality Center
gfor the New Single Audit Rules
We will only summarize several key points today
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Single Audit – Key Planning Considerations
Meet early on with clients to discuss nature of federal awards expendedof federal awards expended • Taking an “inventory” is important
This step is important for determining whether will be testing against “old” or “new” requirements• There may be audits where there is very little impact
Governmental Audit Quality Center
There may be audits where there is very little impact
• There may be other audit scenarios where impact will be larger
• There may not be any reduction in audit effort or cost!
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Single Audit - Key Planning Considerations
If auditees expend federal funds subject to the UG, need to understand new administrative requirements and cost principles requirements (see resources slides for related GAQC Web events)
A sampling of important changes and how addressed in new “Part 3” section of 2015 Supplement include:• Internal Control – covered in all Compliance Requirements
Governmental Audit Quality Center
• Procurement – covered in Procurement and Suspension and Debarment
• Direct and Indirect Costs – covered in Allowable Costs/Cost Principles
• Time and Effort – covered in Allowable Costs/Cost Principles
• Subrecipient Monitoring – covered in Subrecipient Monitoring
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Single Audit - Key Planning Considerations
A key step in getting ready is to ensure staff is trained • Cover new auditee requirements
• Cover how to use the 2015 Compliance Supplement
• May want to hold off on training on the new audit requirements until the Fall
GAQC archived and upcoming Web events may help with training
R b l i l t ti f dit
Governmental Audit Quality Center
Remember….no early implementation of audit requirements!
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Single Audit – Uniform Guidance Access Information
All OMB guidance for federal awards streamlined in Title 2 of CFR, Subtitle A, Chapter II, Part 200How to Access the UGHow to Access the UG• Electronic Code of Federal Regulations (e-CFR) version• PDF version of the Federal Register Notice in its entirety • Access other related OMB documents at
http://www.whitehouse.gov/omb/grants_docs
How to access COFAR documents and Webcasts• Visit https://cfo.gov/COFAR/• Go to the COFAR Mailing List link to register and receive future
Governmental Audit Quality Center
g gannouncements, information on upcoming webcasts, and other COFAR resources
How to access the Joint Interim Final Rule• PDF version of the Federal Register Notice in its entirety
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Single Audit – GAQC Uniform Guidance Resources
GAQC Alerts:• GAQC Alert #241 - OMB's New Uniform Grant Guidance
Subparts A D and Other Key Related InformationSubparts A-D and Other Key Related Information
• GAQC Alert #243 - Information about the New COFAR FAQs on the Uniform Grant Guidance
• GAQC Alert #250 - OMB's New Uniform Grant Guidance Subpart E and Other Key Related Information
• GAQC Alert #268 - Uniform Guidance Implementing Rules and Technical Corrections Issued for Comment
Governmental Audit Quality Center
• Future GAQC Alerts on specific guidance in the Uniform Guidance
• Go to: http://www.aicpa.org/GAQC
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Single Audit – GAQC Uniform Guidance Resources
GAQC Web Events:• Archived Web Events
U if G id f F d l A d A dit Pl io Uniform Guidance for Federal Awards: Auditor Planning Considerations for the New Single Audit Rules
o Uniform Guidance for Federal Awards: How Clients will Need to Monitor Subrecipients Going Forward
o Uniform Guidance for Federal Awards: The New Cost Principles, Time and Effort Reporting, Procurement and Other Administrative Requirements
U i W b E t
Governmental Audit Quality Center
• Upcoming Web Events
o 2015 Compliance Supplement – June 10, 2015
o Single Audit Fundamentals (multi-part series updated for the UG) – Fall 2015
o Rebroadcasts of various events coming in June 2015
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Single Audit – Uniform Guidance - 2018 Study of Single Audit Quality
Uniform Guidance requirement for a federal study of quality once every six years beginning in 2018
Statistically reliable estimate of the extent that single audits conform to applicable requirements, standards, and procedures
Recommendations required to address noted issues
Results of reviews must be made public
2018 timing may result in audits implementing the
Governmental Audit Quality Center
2018 timing may result in audits implementing the Uniform Guidance for the first time being selected as part of the review
This study should be something auditors focus on now!
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A Refresher on the Prior Federal Single Audit Quality Study Results
Governmental Audit Quality Center 37
Previous federal study of single audits issued in 2007 resulted in more than 50% of audits being either unacceptable or limited reliability
Common Single Audit Deficiencies Then (and Maybe Now???)
Major program determination problems
Lack of understanding and testing internal control
Improper use of Compliance Supplement or compliance testing problems
Schedule of Expenditure of Federal Awards (SEFA) deficiencies
Inadequate or missing audit documentation
Single audit reporting errors
Governmental Audit Quality Center
Single audit reporting errors
Findings problems
Federal Audit Clearinghouse (FAC) Data Collection Form (DCF) errors
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Federal Agency QCR and Desk Review Checklist Updates
Both checklists updated in 2015
Updates made were for the AICPA clarity auditing standards and 2011 Yellow Book
Effective for QCRs and desk review of audits conducted in accordance with OMB Circular A-133 for audit periods ending on or after December 15, 2012
Guides have not been updated for and are not to be
Governmental Audit Quality Center
used by the federal agencies for the review of single audits performed under Uniform Guidance
Access the checklists (2015 Editions)• Guide for Quality Control Reviews of OMB Circular A-133 Audits
• Guide for Desk Reviews of OMB Circular A-133 Audit Reports
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FAC – Data Collection Form (DCF) Developments
Continuation of current DCF for audits before 12/31/15 (Circular A-133 audits)
Requirements for finding numbers and text searchable, unlocked, and unencrypted submissions became effective starting in January 2015• FAC reports few problems reported with requirement for 85% text
searchable unlocked and unencrypted submissions
Governmental Audit Quality Center
searchable, unlocked, and unencrypted submissions
Federal working group established to work on new DCF for Uniform Guidance single audits • Also discussing other updates/changes to process
• Federal Register notice will provide opportunity to comment
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Tips to Avoid Data Collection Form Errors
Information on DCF should agree with single audit reports
Avoid these common issuesAvoid these common issues• Summary of Auditor’s Results lists cluster as audited as a major
program but DCF doesn’t indicate some or all of the programs in the cluster were audited as major
• All lines on DCF with same CFDA # not marked as audited as major
• Audit findings on DCF don’t agree to single audit reports
Governmental Audit Quality Center
• Type A/B threshold on DCF doesn’t match threshold shown on Summary of Auditor’s Results
• Amounts on DCF don’t agree with amounts on the SEFA
• Inconsistency between federal awards and audit findings tabs
• Identifying a program-specific audit when a single audit performed
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FAC Data Collection Form
GAQC and FAC Resources• GAQC Alert #234,GAQC Alert #238, and GAQC Alert 243 for
more information about the latest version of the DCF and related processes.
• GAQC Web event titled, The New Data Collection Form and Important Clearinghouse System Changes.
• The FAC's Frequently Asked Questions Web page.
• PDF quick reference guide from the FAC to learn more about the new FAC system.
• A question and answer document developed by the GAQC on
Governmental Audit Quality Center
• A question and answer document developed by the GAQC on previous FAC system changes and the last version of the DCF
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2015 AICPA Audit Guide
New Title: AICPA Audit Guide, Government Auditing Standards and Single Audits
eBook expected to be available in late June and print p pversion in late July
Significant changes this year• Maintaining old and new single audit guidance through transition
period
• All single audit chapters (5-14) addressing Circular A-133 audits being updated and maintained.
Governmental Audit Quality Center
• Numerous new chapters (15-24) being added addressing the Uniform Guidance in new Part III
• Transition guidance being added to each chapter as well
Once available, order at: www.cpa2biz.com
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For-Profit Compliance Audits
Housing and Urban Development• Multifamily News
o New Nursing Home Operator Reporting Guidance - Federalo New Nursing Home Operator Reporting Guidance - Federal Notice No. FR-5794-N-02 – “Submission of Operator Financial Reports in Accordance with HUD’s Uniform Financial Reporting Standards: Commencement of Compliance
• 2014 Version of Regulatory Agreement
• Lender News
o Lender Electronic Assessment Program (LEAP) deployed
Governmental Audit Quality Center
o Lender Electronic Assessment Program (LEAP) deployed May 2014
• NFP, SLG and Indian Tribes
o HUD Notice SD 2015-1, Transition to 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Final Guidance
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For-Profit Compliance Audits
HUD Resources • GAQC Web site HUD Information page a good
resource
• Archived Web events, The HUD Consolidated Audit Guide Part I: For-Profit Multifamily Housing Audits, and The HUD Consolidated Audit Guide Part II: Lender Audits.
• GAQC Alert #243 - HUD Lender News and GAQC
Governmental Audit Quality Center
Alert #222 - HUD Issues Revised Chapter 1 of HUD Guide
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For-Profit Compliance Audits
Examples of Various For-Profit Compliance Audits beyond HUD• Agriculture: Rural Utility Service; Rural DevelopmentAgriculture: Rural Utility Service; Rural Development
• Commerce: Broadband Technology Opportunities Program
• HHS: National Institute of Heath For-Profit Grant Recipients
• Education: Proprietary Schools; Lenders
Look at summary of other compliance audits of for-profit entities on GAQC Web site which indicates latest status and links to audit regulations or guides
Governmental Audit Quality Center
latest status and links to audit regulations or guides
Look to federal agency regulations and/or federal audit guides for audit requirements
What if regulation or a federal audit guide take approach of referencing a Circular A-133 audit?
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GASB-Related Topics
2015 Pension Focus - Employer Accounting for Pensionsg• Don’t wait until October to see if you will have
what you need to opine on your client’s financial statements
• Start asking questions now!
2015 State & Local Governments A&A G id
Governmental Audit Quality Center
Guide
GASB Standards on the Horizon
Noted Deficiencies in State & Local Engagements
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GASB - 2015 Pension Focus for Audits of Employers
Preparation & Planning Considerations for employers participating in all types offor employers participating in all types of plans• Does the client’s measurement date make
sense?
• Do you think you have a special funding situation?
Governmental Audit Quality Center
• Is the plan audited?- Remember that AU-C 600 (group audits) does NOT
apply for employer pensions amounts – you cannot reference plan auditor?
• Have you planned for census data testing?
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GASB - 2015 Pension Focus for Audits of Employers
Preparation & Planning Considerations for Employers Participating in Single-EmployerEmployers Participating in Single-Employer Plans• Is the plan separately audited? By another auditor?
• Is management taking appropriate responsibility for its pension amounts?
- Will the employer need an opinion from plan on the pension ?
Governmental Audit Quality Center
amounts?
49
GASB - 2015 Pension Focus for Audits of Employers
Preparation & Planning Considerations for Employers Participating in Agent PlansEmployers Participating in Agent Plans• Is management taking appropriate responsibility
for its pension amounts? - Similar to single-employer
• How is the employer getting evidence over actuarial driven amounts (i.e., Total Pension
Governmental Audit Quality Center
Liability, Pension Expense, Deferred Inflows/Outflows of Resources?
• How is the employer getting evidence of fiduciary net position?
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GASB - 2015 Pension Focus for Audits of Employers
Preparation & Planning Considerations for Employers Participating in Cost-SharingEmployers Participating in Cost Sharing Plans• How is the plan reporting amounts attributable to
the employer?- Simple schedule or full detail of pension amounts?
- Will the plan provide a draft report to review?
Governmental Audit Quality Center 51
GASB - Pension Resources Available
Pension Issues & Resource Page on GAQC Web site• GASB Implementation Toolkit for Governments
• Pension Whitepapers & Auditing Interpretations
• Archived GAQC Alerts and Archived GAQC Web Events:
o GASB Pensions: Are You Ready for June 30, 2015, Audit Implementation?
Governmental Audit Quality Center
o Considerations for Cost-Sharing Plans, Participating Employers
o Considerations for Agent Plans and Participating Employers
o Overview of the New GASB Pension Accounting Standards
AICPA GASB Statement No. 68 Workshop 52
27
2015 AICPA State & Local Governments A&A Guide
New Chapter to be Issued July 2015• Part 1. Accounting & Auditing Considerations for Audits of
Pension Plans (GASB 67)Pension Plans (GASB 67)
• Part 2. Employer Accounting, Financial Reporting, and Auditing Considerations: Single and Agent Employers (GASB 68)
• Part 3. Employer Accounting, Financial Reporting, and Auditing Considerations: Cost-Sharing Employers (GASB 68)
Oth Additi
Governmental Audit Quality Center
Other Additions• GASB Statement No. 69, Combinations
• GASB Statement No. 70, Nonexchange Financial Guarantees
• New appendix, summarizes key aspects of the quality control standard
53
GASB Standards – On the Horizon
GASB Statement No. 72, Fair Value Measurement & Application (6/30/16 year-
d )ends)
GASB Statements to be Issued in Future and Expected Issuance Dates• OPEB (Employer and Plan), 2Q15
• Non Trust Pensions, 2Q15
GAAP Hi h d C h i I l t ti
Governmental Audit Quality Center
• GAAP Hierarchy and Comprehensive Implementation Guide, 2Q15
• Tax Abatement, 3Q15
Access SLGEP Comment Letters to GASB
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Noted Deficiencies in State & Local Engagements
Management’s Discussion and Analysis (MD&A)
Defining the Reporting Entity
Independent Auditor’s Report
Disclosures
Outdated Terminology in Financial
Governmental Audit Quality Center
Outdated Terminology in Financial Statements, Notes and MD&A
55
Upcoming GASB-Related GAQC Web Event
May 20, 2015, from 1:00 PM – 3:00 PM
Title: Audits of State and Local Governments: Common Risk Factors and Related Audit Responses
Watch for GAQC Alert with Registration Information
Governmental Audit Quality Center 56
29
FASB – Not Much New Affecting June 2015 Audits
But lots of big things coming in future: • FASB Exposure Draft, Financial Statements p
of Not-for-Profit Entities
- Issued last week with comments due August 20. 2015
• Implementation of revenue recognition
Familiarity needed as NFP clients likely
Governmental Audit Quality Center
Familiarity needed as NFP clients likely to have many questions• Members should seek more information and
training
57
NFP Audits – A Few 2015 Reminders
FASB ASU 2013-06, Topic 958: Services Received from Personnel of an Affiliate• Do not overlook this ASU; effective for June 30 2015• Do not overlook this ASU; effective for June 30, 2015,
year-ends
• Mostly affects entities that do not have their own employees (e.g., religious organizations, hospital foundations)
• Clients should have established controls
Governmental Audit Quality Center
AICPA Q&A titled, Not-for-Profit Entity with a For-Profit Subsidiary and Adoption of FASB ASU 2014-02 on Goodwill; Issued in January 2015
58
30
NFP Audits – A Few 2015 Reminders
Q&A titled, Effect of New Mortality Tables on Nongovernmental Employee Benefit Plans (EBPs) and Nongovernmental Entities That Sponsor EBPs; Issued in February 2015
Alternative investments continue to be a challenge
Governmental Audit Quality Center 59
Other NFP Updates
2015 AICPA Audit and Accounting Guide, Not-for-Profit Entities (NFP Entities Guide) to be released on May 1May 1
2015 AICPA Audit Risk Alert, Not-for-Profit Entities Industry Developments
AICPA Not-for-Profit Certificate Program – Available now!
Not-for-Profit Section – Coming soon!
Governmental Audit Quality Center 60
31
NFP Emphasis Points/Quality Issues
Valuation of Gifts In-Kind
Functional Allocation Issues
Classification of Net Assets
Exchange and nonexchange revenue
Improper use of grant accounting instead of GAAP
Inadequate Disclosures• Unsupported tax positions
• Publicly traded debt
• Nature and extent of donor-imposed restrictions
• Nature and extent of contributed services
Governmental Audit Quality Center
• Operating income
• Fair value
• Alternative Investments
• Uniform Prudent Management of Institutional Funds Act (UPMIFA)
• Performance Indicators
61
FASB – AICPA Resources
NFP Resources• AICPA Web Event
Not for Profit Accounting & Reporting: From Start to Finisho Not-for-Profit Accounting & Reporting: From Start to Finish, May 12
o Not-For-Profit Entities: 2015 Audit & Accounting Issues, May 26
• AICPA NFP Conferences
o AICPA Not-for-Profit Industry Conference, June 15, 2015 -June 17, 2015 - National Harbor, MD (Online Option A il bl )
Governmental Audit Quality Center
Available)
o AICPA National Governmental and Not-for-Profit Training Program, October 19, 2015 - October 21, 2015 - New Orleans, LA
62
32
Looking Forward
• Seek clear guidance from on UG, Federal Audit Clearinghouse efforts HUD etc
AdvocacyAdvocacyefforts, HUD, etc.
• Updated AICPA Guidance for UG, conferences, CPE and technical updates and resources from GAQC
New Single Audit New Single Audit GuidanceGuidance
• Assistance to members, conference sessions, GAQC communications, publications
GASB PensionsGASB Pensions
Contin edContin ed
Governmental Audit Quality Center
• Work collaboratively with peer review team, ethics, and federal agencies
ContinuedContinuedEmphasis on Improving Emphasis on Improving
QualityQuality
• GAQC Alerts, GAQC Web events, tools, resources, articles, etc.
Continued Support Continued Support to Membersto Members
63
GAQC Contacts
AICPA Staff
Best way to reach us: [email protected] g q @ p g
• Director:- Mary Foelster [email protected]
• Technical Managers- Teresa Bordeaux tbordeaux@aicpa org
Governmental Audit Quality Center
- Teresa Bordeaux [email protected] Laura Hyland [email protected] Rafael Roman [email protected]
64
33
Oth AICPA d GAQCOther AICPA and GAQC Resources
• Primary Focus• Government Auditing Standards &
AICPA Resources (www.cpa2biz.com)
• Government Auditing Standards & Circular A-133 Audits
• State and Local Governments - Audit and Accounting Guide
• Other Industries Include• Not for Profit Entities• Health Care Entities• Gaming
Governmental Audit Quality Center
g• Sampling
• Audit Risk Alerts• Checklists & Illustrative
Statements
66
34
GAQC ResourcesGAQC Web site (www.aicpa.org/GAQC)
Governmental Audit Quality Center 67
GAQC Resources
Illustrative Auditor Reports Archived Alerts & Web
On GAQC Web site you can find:
Peer Review Checklists
Tips for Getting Through a Quality Control Review
Marketing Toolkit Member listing Membership Q&A Governmental event and
Events
Articles
Auditee Resource Center
Circular A-133 Resource Center
Practice Aids and Tools (single audit & Yellow
Governmental Audit Quality Center
Governmental event and conferences summary
Governmental & NFP CPE Opportunities
( gBook)
GASB Matters Page
HUD Information Page
So much more!68
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GASB Matters Web Page
New GASB Matters Web Page
Governmental Audit Quality Center 69
Auditee Resource CenterAuditee Resource Center Practice Aid - Procuring Governmental Audit Services
Governmental Audit Quality Center 70
36
GAQC Resources – GAQC AlertsArchived Alerts (click here to access)
Alert No. Alert Date Alert Description
273 17‐Mar‐15 Register for April 28th Required 2015 GAQC Annual Update Webcast
272 25‐Feb‐15 Updates on Single Audit and Other Advocacy Efforts
271 11‐Feb‐15 Register for March 4th Web Event on GASB Pensions Audit Implementation
270 16‐Jan‐15 2015 Compliance Supplement Available for Comment and Uniform Guidance Update
269 14‐Jan‐15 Ready for the Uniform Guidance for Federal Awards? Register for Related February 5th Web Event
268 24‐Dec‐14 Uniform Guidance Implementing Rules and Technical Corrections Issued for Comment
267 23‐Dec‐14Register for January 22nd Event on Avoiding Common Audit Deficiencies in Yellow Book and Single Audits
266 17‐Dec‐14 Register for January 14th Event on Avoiding Common Audit Deficiencies in SLG Audits
265 16‐Dec‐14GAQC Membership Compliance Questionnaire - Future of Practice Monitoring - Year-End Yellow Book CPE Opportunities
264 19‐Nov‐14 Register for December 3rd Scared Straight: Audit Quality Web Event
263 11‐Nov‐14 FAC Accepting 2014 Submissions and Other Important News
262 21‐Oct‐14 Register for November 12th HUD Web Event
261 29‐Sep‐14Register for October 15th Web Event on the Uniform Guidance for Federal Awards' Subrecipient Monitoring
260 22‐Sep‐14 GAQC Announces Web Event Schedule through June 2015
259 9‐Sep‐14 Enhancing Audit Quality Resources Available
258 8 SRegister for the September 25th GAQC Web Event - Uniform Guidance for Federal Awards Cost
Governmental Audit Quality Center 71
258 8‐Sep‐14g p
Principles
257 15‐Aug‐14AICPA Releases Quality Paper; 2014 DCF Update; Performing Out-of-State Attest Work; Center Dues
256 23‐Jul‐14 Important GAQC, GASB, and HUD Updates
255 26‐Jun‐14New Agent Pension-Related Auditing Interpretations and Summary of Key Pension-Related Guidance
254 23‐Jun‐14 Required GAQC Webcast Rebroadcast and Other GAQC Web Event Rebroadcast Opportunities
253 29‐May‐14Important New Agent Plan Guidance for Plans, Participating Governmental Employers, and Their Auditors Issued by AICPA
252 21‐May‐14Register for June 18th Web Event on the New Compliance Supplement and Uniform Grant Guidance
251 19‐May‐14 OMB Releases Final 2014 Compliance Supplement
250 14‐May‐14 OMB's New Uniform Grant Guidance Subpart E and Other Key Related Information
GAQC Resources – Web EventsClick here to see all archived events organized in topic order and click hereto see all in chronological order.
Date Topics
3/4/2015 GASB Pensions: Are You Ready for June 30, 2015, Audit Implmentation
2/5/2015Uniform Guidance for Federal Awards: Auditor Planning Considerations for the New
2/5/2015Single Audit Rules
1/22/2015Audit Quality Discussion Part II: Avoiding Common Deficiencies in Yellow Book and
Single Audits
1/14/2015Audit Quality Discussion Part I: Avoiding Common Deficiencies in State and Local
Government Financial Statement Audits ‐ Member Web Event
1/14/2015Audit Quality Discussion Part I: Avoiding Common Audit Deficiencies in State and Local
Government Financial Statement Audits12/3/2014 Scared Straight — The Consequences of Poor Audit Quality
11/12/2014Most Frequently Asked Questions about Auditing HUD Multifamily Housing Entities and
Other HUD Activities
10/15/2014Uniform Guidance for Federal Awards: How Clients will Need to Monitor Subrecipients
Governmental Audit Quality Center 72
10/15/2014p
Going Forward
9/25/2014Uniform Guidance for Federal Awards: The New Cost Principles, Time and Effort
Reporting, Procurement and Other Administrative Requirements 6/18/2014 2014 Compliance Supplement and New Uniform Grant Guidance Key Points5/29/2014 Required GAQC 2014 Annual Update Webcast
5/7/2014The GASB's Pension Standards Part II: Considerations for Agent Plans and Participating
Employers
5/6/2014The GASB's Pension Standards Part I: Considerations for Cost‐Sharing Plans, Participating
Employers
37
GAQC Resources – Tools & Practice Aids
Audit Practice Tools and Aids • Single Audit Practice Aids
- Schedule of Expenditures of Federal Awards
- Internal Controls and Compliance Practice Aids
• Government Auditing Standards (Yellow Book) Tools and Aids- 2011 Yellow Book Independence—Nonaudit Services Documentation
Practice Aid
- AICPA – Government Auditing Standards Independence Rules Comparison
• Other Compliance Audit Information Relating to For-Profits- List of Federal Agency Compliance Audit Guides and Status
• Governmental Audit Quality Article Collection
Governmental Audit Quality Center
• Governmental Audit Quality Article Collection- Implementation Considerations of GASB 61
- Auditor Association with Municipal Securities Filings
• Auditee Resource Center Practice Aid - Procuring Governmental Audit Services
73
GAQC Resources – Tools & Practice Aids
HUD Information
Illustrative Auditors Reports• Single Audit, Yellow Book, HUD
GASB M ttGASB Matters• Key Interest Areas (Pension Issues & Resources)
- Recent Whitepapers related to Cost-Sharing Plans, Auditing Interpretations, Additional Pension Resources
• Key Resources & Advocacy Efforts
Quality Control Tools• Peer Review Checklists
• Tips for Getting Through a Quality Control Review
Governmental Audit Quality Center
p g g y
• Peer Review Checklists
Marketing Toolkit for Member Firms & Logos• Common document templates such as, Newsletters, Press Releases, etc.
• Training on how to build a niche practice
• Membership Listings
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Available Resources
AICPA 2015 Conferences
• AICPA Not-for-Profit Industry Conference, June 15-17, Gaylord National Resort & Convention Center, National Harbor, MD
• AICPA National Governmental Accounting and Auditing Update• AICPA National Governmental Accounting and Auditing Update Conference (GAAC) EAST, August 10-11, J.W. Marriott, Washington, DC
• AICPA National Governmental Accounting and Auditing Update Conference (GAAC) WEST, September 29-30, Hilton San Diego Resort and Spa, CA
• AICPA National Governmental and Not-for-Profit Training Program, October 19 20 Hyatt Regency New Orleans LA
Governmental Audit Quality Center
October 19-20, Hyatt Regency, New Orleans, LA
All conferences have extensive sessions offerings on governmental auditing topics, some of which were developed with assistance from the GAQC
GAQC members can obtain a registration discount – click on this link
75
Questions ???
Governmental Audit Quality Center 76
1
FINANCIAL AND ADMINISTRATIVE SERVICES
Federal Programs Tiered Monitoring
Missouri Departmentof Elementary and Secondary EducationMay 5, 2015
Agenda
Subrecipient Monitoring
Period of Availability/Obligations Period of Availability/Obligations
Allowable Costs
Financial Management/Separate Tracking/Cash Management
Equipment and Supplies Management
Procurement
Time and Effort
Supplement/Supplant/MOE
2
Subrecipient Monitoring
High Risk Status:
Th S i h h i d 74 14 d 80 12The Secretary retains the authority under 74.14 and 80.12 to impose high risk conditions on individual grants and individual grantees at time award is made or after an award is made.
Subrecipient Monitoring
Districts/LEAs are sorted into three Cohorts (groups)
There are 4 Levels in the Tier Monitoring CycleThere are 4 Levels in the Tier Monitoring Cycle
Desk Audit/Application Review
Tier 1: Self‐Assessment/Desk Monitoring
Tier 2: On‐site Monitoring
Tier 3: Training and Preparation
Cohorts will move through the Tier Levels from year to yearg y y
TIER LEVEL 2014‐15 2015‐16 2016‐17
Desk Audit/Application Review All Cohorts All Cohorts All Cohorts
Tier 1: Self‐Assessment Cohort 1 Cohort 2 Cohort 3
Tier 2: On‐site Monitoring Cohort 3 Cohort 1 Cohort 2
Tier 3: Training & Preparation Cohort 2 Cohort 3 Cohort 1
3
Subrecipient Monitoring
Possible Risk Factors – On‐site or Telephone
Amount of federal funds (large amounts = greater risk) Amount of federal funds (large amounts = greater risk)
A‐133 audit findings
Late MOSIS/Core Data Reports
Financial Distress
Administrator Changes/Other Issues Reported by Auditor or LEA
Late FER
Late Budget Application
Violation of CMIA
Subrecipient Monitoring General Federal Guidance, Special Education Fiscal Monitoring Guide, and
Elementary & Secondary Education (ESEA) Finance Monitoring Guide will be y y ( ) gupdated with new Omni requirements
Regional Special Education Fiscal Monitoring trainings will be held again in the fall
2016‐17 will be the first year LEAs will be monitored on the implementation of the new Omni requirements effective in the 2015‐16 school year
Self‐Assessments:
LEAs in Cohort 3 will complete Self‐Assessments in 2016‐17
On‐Site Reviews:
Selected LEAs in Cohort 2 will receive On‐Site reviews in 2016‐17
Cohort list: http://dese.mo.gov/sites/default/files/qs‐cohort‐lists‐2014.pdf
4
Period of Availability/Obligations
Each grant has a period for which funds can be obligated and expendedexpended
The approved project period is the time frames for which obligations may be incurred and liquidated
LEA may charge to the award only costs resulting from obligations incurred during the funding period
34 CFR 75 707 d 2CFR P t 200 30934 CFR 75.707 and 2CFR Part 200.309
Period of Availability of Funds
Grant Cycle Obligation Period FER Reporting Period
July 1 – June 30 Date of Substantially Approved Application – June 30
July 1 – September 30
Period during which funds may be obligated and
Obligations occur during the grant cycle, but only after a
Expenditures for obligations made during the obligation
expended. substantially approved budget application has been submitted.
period (date of substantially approved application – June 30) may be reported up until September 30.
5
When is an Obligation Made?
IF THE OBLIGATION IS FOR‐‐ THEN THE OBLIGATION IS MADE‐‐ Acquisition of real or personal property On the date the school district makes a binding written
commitment to acquire the property
Rental of real or personal property When the school district uses the property
Personal services by an employee of the school district
When the services are performed
Personal services by a contractor who is not an employee of the school district
On the date the school district makes a binding written commitment to obtain the services
Performance of work other than personal On the date the school district makes a binding written services commitment to obtain the work
Public utility services When the school district receives the services
Travel When the travel is taken
334CFRPart75.707
Period of Availability/Obligations
July 1, 2015 April 30, 2016 June 30, 2016 September 30, 2016
• Beginning of the FY16 Grant Cycle
• FY16 Budget Applications Due
• LEAs may begin obligating
• FY16 Budget Revisions Due
• Budget any carryover funds from FY15
• Deadline for all obligations for 2015-16 expenditures
2016
• All expenditures for 2015-16 obligations must be finalized
• FY16 FER Due
• Any FY16 FY16 grant funds as soon as the Budget Application is submitted (substantially approved)
Grant Funds not expended will carryover into FY17
6
Allowable
LEAs assume responsibility for ensuring that federal funds have been expended and accounted for consistent with program regulations and approved applications.
All costs must be:
Necessary and reasonable for the performance of the grant
Conform to any limitations or exclusions
Consistent with state and local policies
In accordance with GAAP
Adequately documented
Net of all applicable credits
2 CFR Part 200.403
Allowable
Written procedures for determining the allowability of costs in accordance with Subpart E Cost Principlescosts in accordance with Subpart E – Cost Principles
Should explain the process used throughout the grant development and budget process (Federal funds must be budgeted in ePeGS prior to obligating)
Training tool and guide for employeesg g p y
ESEA and IDEA Part B federal funds must be prorated if not directed 100% towards the federal program
2CFRPart200.302
7
Financial Management
For each award, LEA financial management system must provide:
Account identification of awards and expenses Account identification of awards and expenses
Accurate, current, and complete financial disclosure
Source and application of funds
Effective accountability for all fund, property and assets
Comparison of expenditures with budget
Written procedures on minimizing the time elapsing between expenditure Written procedures on minimizing the time elapsing between expenditure
and reimbursement (cash management)
Written procedures for determining allowability
Separate tracking and must not comingle funds
2CFRPart200.302
Separate Tracking
Use Accounting Codes in the Missouri Financial Accounting Manual (Special Education expenditures should be coded to Special Education function codes)
These codes include Fund Code, Function Code, Object Code, Operational Code, and Source of Funds Code.
Source of Funds/Project Code should be used to identify individual federal programs
Program person should work closely with the finance person to Program person should work closely with the finance person to make sure the accounting system is set up appropriately
8
Separate Tracking
IDEA Part B Allocation $515,412.00
+ $174,271
+ $109,713
+ $11,447
+ $89,873
+ $126,405
+ $2,196
+ $1,429
+ $78
* $515,412
9
Accounting Records - Example
Accounting Records - Example
10
Source Documentation
Accounting records must be supported by source documentation such as cancelled checks, paid bills, payrolls, time and attendance records, contract and sub‐award documents.
Electronic copies are okay.
Proper authorization – Example: Make sure that time and effort logs are signed by the appropriate staff.
Must retain for at least 3 years from the end of the grant. The statute of limitations is 5 yearsstatute of limitations is 5 years.
Cash Management
The Cash Management Improvement Act (CMIA) was placed in operation to prevent interest earnings on federal fundsin operation to prevent interest earnings on federal funds.
The CMIA requires LEAs to demonstrate when receiving federal funds that they have either already spent the funds or will spend the funds within three business days of receipt of funds.
DESE d t ll d t DESE does not allow advance payments.
2CFRPart200.305
11
Cash Management
DESE must monitor LEA to ensure timely payments.
Expenditures are transactions that are recorded on the books and Expenditures are transactions that are recorded on the books and delivered to the recipient.
Coding expenditures in the general ledger above the allocation amount puts the LEA at risk for requesting overpayments and subsequently violates CMIA.
Expenditures coded in the GL as paid with federal funds must match the monthly payment transmittal.
Federal expenditures coded to state/local need journal voucher to federal sources within three days.
Responsibility of the LEA to document administrative expenses claimed as an interest offset.
Cash Management
NEW – LEA must have written procedures to implement the requirements of minimizing the time elapsingthe requirements of minimizing the time elapsing between receipt and expenditure of federal funds.
NEW ‐ Interest amounts up to $500 may be retained by LEA for administrative purposes.
12
Cash Management
GENERAL LEDGER
MONTH: 06/2015 FISCAL YEAR: 2015
Current Month YTD Total
41 = EXPENDITURES PAID WITH PART B FUNDS 55,961 416,407
42 = EXPENDITURES PAID WITH ECSE FEDERAL FUNDS 4,218 4,218
00 = EXPENDITURES PAID WITH STATE FUNDS 39,181 235,475
01 = EXPENDITURES PAID WITH LOCAL FUNDS 7,352 59,882
106,712 715,983
Equipment Management
Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a technology systems) having a useful life of more than one year and aper‐unit acquisition cost which equals or exceeds $1,000. The following items are subject to the inventory management and contract requirements:
1. Equipment items with an acquisition cost of $1,000 or more per unit.
2. Items with an acquisition cost under $1,000 per unit which are considered attractive or easily pilfered.
2CFRPart200.33
13
Equipment Management
Purchases are consistent with the approved application
Used to supplement and not supplant non‐federal funds Used to supplement and not supplant non federal funds
Property Records are maintained and up‐to‐date
Maintains inventory list with ALL required components
Used for its intended purpose
Controls/safeguards are in place to prevent loss, damage or theft
Physical inventory conducted at least once every two years Physical inventory conducted at least once every two years
Adequate maintenance procedures to keep the property in good condition
Prior approval must be obtained for equipment and capital outlay purchased federal funds
Property Record Components
Property Records/Inventory List must be maintained and include:
Description of the propertyp p p y
Serial number or other identification number
NEW ‐‐ Funding source of property (Including FAIN)
Who holds the title, if applicable
Acquisition date
Cost of the property
Percentage of federal participation in the project costs for the Federal award under which the property was acquired
Location, use and condition of the property
Any ultimate disposition data including the date of disposal and sale price of the property.
14
Equipment Disposition
When equipment acquired under a Federal award is no longer needed for the original project or program the LEA must dispose of the equipment as follows:
Items with current per unit fair market value of $5,000 or less may be retained, sold or otherwise disposed of with no further obligation.
Items with current per unit fair market value in excess of $5,000 may be retained by the LEA or sold.
Proper sales procedures must be established to ensure the highest ibl tpossible return.
2CFRPart200.313(d)(1)
Supplies
Anything that is not equipment is considered supplies.
“Significant Technological Devices” Significant Technological Devices
NEW: Computing devices
Machines used to acquire, store, analyze, process, public data and other information electronically.
Includes accessories for printing, transmitting and receiving or storing electronic informationstoring electronic information.
Computing devices are supplies if less than $1,000.
2CFRPart200.314
15
Supplies
Must maintain effective control and accountability.
Must adequately safeguard all such property Must adequately safeguard all such property.
Procurement Standards
Procurement standards apply to the purchase of supplies, equipment, and other services funded in whole or in part by federal grant funds. and other services funded in whole or in part by federal grant funds.LEA must:
Use its own written procurement procedures which reflect applicable Federal, State, and local laws and regulations.
Maintain oversight to ensure performance
Maintain written standards of conduct covering conflicts of interest Maintain written standards of conduct covering conflicts of interest
2CFRPart200.318
16
Procurement Standards Continued
Maintain written standards of conduct covering organizational conflicts of interest.conflicts of interest.
Avoid acquisition of unnecessary or duplicative items.
Maintain records sufficient to detail the history of procurement. The records will include: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.j
Be responsible for the settlement of all contractual and administrative issues arising out of procurements.
Method of Procurement
The LEA must use one of the following methods of procurement or be more restrictive with their policies:more restrictive with their policies:
Micro‐purchase up to $3,000
Small purchase $3,000 to $150,000
Competitive sealed bids
Competitive proposals
Noncompetitive proposals
2CFRPart200.32
This will not take effect until July 1, 2016.
17
Time and Effort
Compensation for personal services are allowable to the extent they satisfy specific requirements:satisfy specific requirements:
Is reasonable for the services rendered and conforms to the established written policy of the LEA consistently applied to both Federal and non‐Federal activities.
Follows an appointment made in accordance with the LEA’s laws or written policies.
Is determined and supported by appropriate documentation.
2CFRPart200.430
18
Time Distribution Records
If federal funds are used for salaries, then time distribution records are required. *are required.
Must be allocable; demonstrate that the employee worked on that specific federal program cost objective.
Time and Effort Requirements:
Semi‐annual certification
Personnel Activity Report Personnel Activity Report
Substitute System Certification & Fixed Schedule
Written Agreement
Time Distribution – Schoolwide Pool
Schoolwide Programs … Guidance says that time and effort depends upon if the district combines funds into a single account.upon if the district combines funds into a single account.
If school consolidates Federal, State and local funds in a single account, not required to file single funding certification
If school does not consolidate funds into a single account, must complete single funding certification or time & effort log for federal employees.
19
Time and EffortDetermining the type of Time and Effort documentation needed
20
Personnel Activity Report (PAR)
Documentation Required:
Reflect an after‐the‐fact distribution Reflect an after the fact distribution
Account for the total activity
Be prepared at least monthly and coincide with one or more pay periods
Must be signed after‐the‐fact by the employee
At least quarterly, the actual time reflected on the PAR must be q y,compared to the payroll charges, then payroll adjustments must be made if differences exist
Substitute System Certification & Fixed Schedule Option for employees with multiple cost objectives with fixed
schedules, in lieu of PARsschedules, in lieu of PARs
LEA must first complete and submit for approval a management certification form
Reflect an after‐the‐fact distribution
Account for the total activity
Must be signed after the fact by the employee and a supervisor Must be signed after‐the‐fact by the employee and a supervisor
At least semi‐annually
21
Written Agreement –Stipend & Extra Duty PayDocumentation Required:
Indicates the extra work to be performed Indicates the extra work to be performed
Date(s) of performance
Amount to be paid to the employee
Must be signed by the employer and the employee to show the acceptance of the terms
AND
Semi‐Annual Certification or PARs
ESEA ProvisionsESEA Provisions
22
Supplement/Supplant Requirements
An LEA shall use Federal funds received under ESEA/NCLB programs only to supplement the funds that would, in the absence of such only to supplement the funds that would, in the absence of such Federal funds, be made available from non‐Federal sources for the activities authorized under the individual programs, and not to supplant such funds.
Supplement-Not-Supplant
KEY Question: What would have happened in the absence of federal funds?federal funds?
LEA cannot use federal funds to pay for services, staff, programs, or materials that would otherwise be paid with state or local
funds.
23
ESEA/NCLB Maintenance of Effort
LEA’s combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year is not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year.
The Annual Secretary of the Board (ASBR) report captures the data needed to calculate NCLB MOE in ePeGS.
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Waiver of Fiscal Requirements
Maintenance of Effort – USED Secretary may waive the requirements if it is determined that a waiver would be equitable due to exceptional and uncontrollable circumstances, such as a natural disaster; or a precipitous decline in the financial resources of the LEA.
If the LEA wishes to request a waiver, they would notify the Department and submit documentation to substantiate their request.
Title I.A Provisions
a. Each eligible district receives the allocated amount of funds indicated on Step 4 of the BOA and current building level budgets and on Step 4 of the OA and current building level budgets andexpenditures correspond to the BOA.
b. Targeted Assistance school services are used only by participating students.
c. Carryover provision and records supporting 9/30 Report.
d Comparability of Services written guidance (LEAs with overlappingd. Comparability of Services written guidance (LEAs with overlapping grade spans)
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Title I Breakdown of Allocations – Step 4
Title I Comparability of Services
LEAs having multiple attendance areas serving same or similar grade spans must demonstrate compliance with comparability requirements annually.
State and local funds used to provide services in Title I schools are at least comparable to services provided in schools not receiving Title I funds.
If an LEA doesn’t meet Comparability requirements, the result is the loss of all Title I funds. No waiver available.
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IDEA ProvisionsIDEA Provisions
Proportionate Share
• Proportionate Share is the portion of the district/LEA’s IDEA Part B federal funds that must be reserved and spent to provide services to private, parochial and home schooled students with disabilities in the district’s boundaries.
• Districts/LEAs must maintain the following documentation to support Proportionate Share expenditures:
Student Roster
Home‐School Declarations
Service Plans
E l ti Evaluations
Consultation/Refusal of Services
• Districts/LEAs must track Proportionate Share expenditures separately in the general ledger using function code 1224.
• Child find and evaluation costs may not be charged to Proportionate Share.
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Proportionate Share• Districts/LEAs must prorate the salary/benefits for any staff
providing services to both public school students andproviding services to both public school students and Proportionate Share students.
• Salaries/Benefits may be prorated based on:
• Head Counts
• Caseload Minutes
Documentation to indicate how the Proportionate Share costs were• Documentation to indicate how the Proportionate Share costs were prorated must be maintained.
Proportionate Share
• Any unexpended Proportionate Share funds must be shown as a remaining balance in the FER gridremaining balance in the FER grid
• Unexpended Proportionate Share funds carryover to the next fiscal year. If funds are not expended in 2nd year, the district/LEA may request a release of funds.
• Approval must be requested for the release of Proportionate Share carryover fundscarryover funds
• Proportionate Share carryover funds may only be released for allowable reasons
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Proportionate Share
• ProportionateShareObligation&CarryoverFunds
Proportionate Share
644,279.81 - 627,783.13 = 16,496.68
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Proportionate Share
EXAMPLE 1: FUNDS CAN BE RELEASED
Carryover Amount (from previous year) $2,385.81
Minus Estimated Current Year Expenditures ‐ $10.00
Amount To Be Released $2,375.81
EXAMPLE 2: FUNDS CAN NOT BE RELEASED
Carryover Amount (from previous year) $2,385.81
Minus Estimated Current Year Expenditures ‐$3,000.00
Amount To Be Released ($614.19)
*No Funds Available to Release
Maintenance Of Effort
• Maintenance of Effort (MOE) is the amount of STATE and/or LOCAL funds a district/LEA spends on the special education programfunds a district/LEA spends on the special education program.
• Only expenditures geared specifically towards special education are required to be counted towards MOE.
• District/LEAs must be able to distinguish expenditures paid with federal , state AND local funds in the general ledger.
Beginning FY15→ district/LEA will report all state and local• Beginning FY15→ district/LEA will report all state and local
expenditures separately in ePeGs.
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Maintenance Of EffortMETHOD DESCRIPTION EXAMPLE
FEDERAL Project/Source A code is designated as a special education Function‐Object‐SourceFEDERAL Project/SourceCode
A code is designated as a special education federal expenditure and is attached to the end of the accounting code structure.
Function Object Source1221‐6100‐41
STATEProject/Source Code
A code is designated as a special education state expenditure and is attached to the end of the accounting code structure.
Function‐Object‐Source1221‐6100‐00
LOCAL Project/Source Code
A code is designated as a special education local expenditure and is attached to the end of the accounting code structure.
Function‐Object‐Source1221‐6100‐01
The use of project/source codes within the general ledger is the only means for determining which funding source (federal, state, or local) paid the expenditure.
Maintenance Of Effort
State MOE Amounts (designated by “00” project/source code).Local MOE Amounts (designated by “01” project/source code).
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PAT KAISERDIRECTOR
FEDERAL FINANCIAL MANAGEMENT (ESEA/NCLB)pat kaiser@dese mo gov
ANGIE NICKELLDIRECTOR
SPECIAL EDUCATION FINANCE
SPECIAL EDUCATION FINANCE
1
GASB 68 Pension Disclosures for PSRS/PEERS EmployersEmployers
Presentation Headline
1
Presenters
• Lori Woratzeck, CPA – Chief Financial Officer
• Anita Brand, CPA – Director of Investment Accounting and Operations
2
2
Disclaimer
• We are NOT experts on the new GASB pension standards and likely will not be able to answer all of your questionsquestions.
• The following information is based on our understanding of the pension reporting requirements in GASB 68. As such it is subject to interpretation errors and subsequent clarifications by authoritative literature.
3
Public School and Education Employee Retirement Systems of Missouri
• PSRS and PEERS are separate defined benefit pension plans.PSRS covers full time and certain part time certificated• PSRS covers full-time and certain part-time certificated employees of participating employers.
• PEERS covers non-certificated employees and certain part-time certificated employees.
• Both plans are mandatory cost-sharing multiple employer plans.
4
3
Plan Member Statistics as of June 30, 2014
PSRS PEERSPSRS
• 54,486 benefit recipients
• 89,619 active and inactive participants
PEERS
• 25,029 benefit recipients
• 61,804 active and inactive participantsparticipants participants
5
Plan Financial Statistics as of June 30, 2014
PSRS PEERS• Net Position: $34,380,608,560
• Member account balances: $6,985,665,067
• Fiscal year investment return: 16.9%
• Net Position: $3,846,322,886
• Member account balances: $949,343,801
• Fiscal year investment return: 16.9%
• Pre‐funded ratio:
• Market basis ‐ 89.3%
• Actuarial basis ‐ 82.8%
• Pre‐funded ratio:
• Market basis – 91.3%
• Actuarial basis – 85.1%
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4
GASB 68 Effective Date
• Accounting and Financial Reporting for Pensions –Employer ReportingEffective for fiscal years beginning after June 15 2014• Effective for fiscal years beginning after June 15, 2014
• Employers with a fiscal year end of June 30 will implement by June 30, 2015
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Effects on PSRS/PEERS Employers
Impact on financial statements• Proportionate share of Net Pension Liability
• Proportionate share of total pension expense and deferred inflows/outflows
• No changes in calculation of contribution rate
R i d Di lRequired Disclosures• Expanded
• Required Supplementary Information
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5
Responsible Parties
•Audited Schedule of Employer
PSRS/PEERS
Audited Schedule of Employer Allocations• Expected to be available 6/1/2015
•Audited Schedule of Pension Amounts by Employer• Expected to be available 6/1/2015
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• Expected to be available 6/1/2015
• Sample footnote disclosures• We have sample to share today
• Expected to be provided by 6/1/2015 as well.
Responsible Parties
Employer Responsibilities
• Employers are solely responsible for their financial statements
• Reconciliation of payroll system to census data submitted to PSRS/PEERS
• 30 employers have yet to respond
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• Employer auditors
• Responsible for the audit opinion
• Determining sufficiency of audit evidence
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Current Year Procedures
• GASB Questionnaire and Reconciliation requested from each employer.
Have approximately 30 districts who have yet to respond– Have approximately 30 districts who have yet to respond.
• Random on-site visits to 10 employers.• Preparation of employer level schedules and sample
footnotes.• Audit of all of the above by our external auditors.
– Currently in progress.
• Production of audited employer level schedules and sample footnote disclosures
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Current Year Procedures
GASB Reconciliation and Questionnaire
• Questionnaire – Designed to gain an understanding of how each employer reports data to PSRS/PEER and determines eligibility participants and salary.
• Common concerns/issues
• Reconciliation – designed to reconcile reported retirement salary to taxable salary.
U f F 941 i li f W 3/W 2 d t fi l
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• Use of Form 941s in lieu of W‐3/W‐2 due to fiscal year.
• Will be required Annually
• Modifications based on first year “lessons learned”.
• Expected to be in the Fall of each year.
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Current Year Procedures
d
•Had a couple of districts volunteer
• All others were random
• Criteria utilized
d f l d
Random On‐site Visits
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• Guidance of external auditors
Q&A
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1
ATTENDANCEREPORTINGANDVERIFICATION
1
VERIFICATION
Presented by:
Jennifer Jordan, Director, School Finance
Missouri Departmentof Elementary and Secondary EducationMay 2015
Tammy Lehmen, School Finance Consultant
Data to be Discussed2
What Hours can be Claimed for AttendanceR l Att d H C d C H Vi t l C HRegular Attendance Hours Correspondence Course Hours Virtual Course Hours
Homebound Instruction Hours School Flex Program Hours COE Hours
Sheltered Workshop Hours Remediation Hours Summer School & ESY Hours
What Hours Cannot be Claimed for AttendanceAttendance Recovery College Visit Credit Recovery
Early Dismissal of Seniors MAP Testing Out-of-School SuspensionEarly Dismissal of Seniors MAP Testing Out of School Suspension
Poor Attendance Days Zero (“0”) Hours Non-Allowable Summer School Courses
Other TopicsAttendance Reporting Rules Calendar Options & Requirements
2
Attendance Hours
CoreDataManualdefinesattendancehoursas:
3
ResidentI‐ Numberoffull‐timeorpart‐timeattendancehoursforResidentstudentsincludingstudentswhoattendanalternativeschooloranareavocationalschoolpartoftheday.
And
ResidentII‐ Numberoffull‐timeandpart‐timeattendancehoursofstudentssenttoanotherdistrictorapprovedprivateschoolforwhomtheresidentdistrictpaidfulltuition(notjustlocaltaxeffort).
Attendance Hours Claimed for State Aid
RegularAttendanceHours‐ Hoursofattendanceduringthe time a student is scheduled to be in class when they
4
thetimeastudentisscheduledtobeinclasswhentheyareunderthesupervisionofacertifiedinstructor(instructorisphysicallypresent).
ComputerBasedCourses ‐ Hoursofattendanceastudentiscompletingcomputerbasedcourseworkatwhileoffschoolcampusbutaresupervisedbyacertifiedinstructor (instructor is physically present).instructor(instructorisphysicallypresent).
3
Attendance Hours Claimed for State Aid
VirtualCourses‐ Hoursofattendanceduringthetimeastudentistakingavirtualcoursewhileonaschoolcampusand
5
g punderthesupervisionofacertifiedinstructor(instructorisphysicallypresent).
VirtualCoursesTakenoffCampus‐ UponCompletionofcourse ‐ 94%ofwhattheattendancehoursitwouldtaketocompleteacourseiftakingthecourseinseatifastudentistakingavirtualcoursewhileoffcampus(fromhome).
VirtualCoursesTakenoffCampus‐ Upononly50%completionofcourse – 47%ofwhattheattendancehoursitwouldtaketocompleteacourseiftakingthecourseinseatifastudentistakingavirtualcoursewhileoffcampus(fromhome).
Innocasecanmorehoursthanafull‐timestudentbeclaimedforstudentstakingvirtualcourses.
Attendance Hours Claimed for State Aid
HomeboundInstruction‐ Fullattendancecanbeclaimed if a student has received a minimum of 5
6
claimedifastudenthasreceivedaminimumof5hoursofinstructionperweekbyacertificatedteacher(SundaythruSaturday). Studentmusthaveaphysicianapprovedmedicalreasonthatwouldrequirethestudenttoreceivehomeboundservices.
Iftheschoolweekisashortweek(lessthana5dayweek)5hoursofinstructionmuststillbeprovidedtocountastudentinfullattendanceforthatweek.
4
Attendance Hours Claimed for State Aid
SchoolFlexProgram‐ Fullattendanceforstudentsparticipating in the School Flex program as long as they:
7
participatingintheSchoolFlexprogramaslongasthey: Attendtwoinstructionalhoursperdayand; Provideevidenceofenrollmentandattendanceatacollegeortechnicalschoolor;
Provideevidenceofemploymentthatisalignedwiththestudent’s“careeracademicplan”tototalaregularh l dschoolday.
ClassAttendance+CollegeorTechSchoolAttendanceorEmploymentHours=RegularSchoolDayHours
Attendance Hours Claimed for State Aid
CooperativeOccupationalEducation(COE)‐ Hoursofattendance when students participate in Department‐
8
attendancewhenstudentsparticipateinDepartmentapprovedprogramsthatareadequatelysupervisedbythedistrict’scertificatedteacherstotheextentthestudentscanbeconsidered“undertheguidanceanddirectionofteachers”andforwhichtheschooldistrictisgrantinghighschoolcredit. Oneofthecourserequirementsistospendapartoftheschoolq p pdayinanemploymentsituationisconsidereda“full‐time”studentiftheon‐campusinstructionplustheemploymentequalsorexceedstheregularschoolday. Ifastudentisleavingpriortothecompletionoftheschooldayforemploymentotherthanvocationallyapprovedsupervisedoccupationalexperienceprogramstheyareapart‐timestudent.
5
Attendance Hours Claimed for State Aid
IEPStudentWorkinginaShelteredWorkshop ‐who has an Individual Educational Plan (IEP) that
9
whohasanIndividualEducationalPlan(IEP)thatindicatesthestudentistoobtainskillsassessment,training,and/orworkexperienceatalocalshelteredworkshopmaybecountedinattendanceforthetimespentworkingplusthetimeintheclassroom,nottoexceedtheregularschooldayofthedistrict. IftheIEPdoesnotcontainthisdirection,thestudentmayonlybecountedforattendanceandmembershipforthepartofthedaythestudentisreceivingclassroominstruction.
Attendance Hours Claimed for State Aid
RemediationHours– Attendancehoursoutsidethetraditionalschooldayareforthosestudentsrequiring
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remediationasaconditionforpromotiontothenextgradelevelbasedonthedistrictdevelopedpolicytoidentifysuchstudents.
RemediationHours‐ RemediationoutsidetheregularschooldayforstudentsscoringbelowbasiconMAPorbelowbasiconEOCmaybecountedforadditionalyattendancehoursiftheremediationrelatestotheMAPcurriculararea.
http://dese.mo.gov/sites/default/files/sf‐AAttendanceReporting.pdf
6
Attendance Hours Claimed for State Aid
SummerSchoolHours‐ Actualsummerschoolattendance and membership hours for students attending
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attendanceandmembershiphoursforstudentsattendinganapprovedsummerschoolprogram. Mustbepartofanapprovedsummerschool.
Attendancecannotbemandatoryexceptforstudentpromotionconditionedonremediation.
Studentcanonlyattendonedistrictduringanyonesummer.
CreditRecoveryhourscanbecompletedaspartofthesummerschoolprogram and those attendance hours can be counted for state aidprogramandthoseattendancehourscanbecountedforstateaid.
ExtendedSchoolYearHours‐ Extendedschoolyearhoursforspecialeducationandrelatedservicesthatareprovidedbeyondthenormalschoolyear,inaccordancewiththechild’sIEP,atnocosttoparentsofthechild,andmeetthestandardsoftheStateEducationAgency.
Attendance Hours NOT Allowed to be Claimed for State Aid
AttendanceRecovery‐ Thereisnoallowanceinstatestatute that would allow for the make‐up of attendance
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statutethatwouldallowforthemake upofattendancehours.Aschooldistrictmayrequireastudenttomake‐uptimeforexcessiveabsences;however,thisdoesnotallowthedistricttocountthosehoursasattendancehoursforthestudent.
CollegeVisits– Astudentthatisabsentfromschooltogoto an independent college visit will be counted as absenttoanindependentcollegevisitwillbecountedasabsentduringthetimethattheyareawayfromschool.WhiletheschooldistrictmayallowthisasanexcusedabsencethistimeisstillreportedasabsencehourswhenreportedinMOSIS.
7
Attendance Hours NOT Allowed to be Claimed for State Aid
CreditRecovery– Aschooldistrictmayallowastudentto make‐up credits; however, there is no provision to allow
13
tomake upcredits;however,thereisnoprovisiontoallowthedistricttocountthosehoursasattendanceforthestudentduringtheregularschoolterm.
EarlyDismissalofSeniors – Adistrictmaydismissseniorsbeforethelastdayofschoolbutthestudentsaregraduatedasoftheirlastdayofattendanceandnoattendance and absent hours are reported from that pointattendanceandabsenthoursarereportedfromthatpointon.
Attendance Hours NOT Allowed to be Claimed for State Aid
MAPTesting ‐ DuringMAPtesting,somedistrictsmaychoose to release students who are not involved in the
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choosetoreleasestudentswhoarenotinvolvedinthetestingprocess(suchasseniors),allowsomestudentsnotinvolvedinthetestingprocesstocometoschoollate,allowstudentstocometoschoolatthetimeofthetest,etc.Whilethedistrictmaymakesuchdecisions,thedistrictcannotcountthestudentasbeinginattendanceduringthosehoursthestudentwasabsent.
Out‐of‐SchoolSuspension‐ Anystudentservinganout‐of‐schoolsuspensionisnotreceivinginstructionalservicesand,therefore,shouldbereportedasabsent,orinthecaseoflongtermsuspensionsexitedfromthedistrict.
8
Attendance Hours NOT Allowed to be Claimed for State Aid
PoorAttendanceDays – Districtsarerequiredtoreportall hours of student attendance and absence. There is no
15
allhoursofstudentattendanceandabsence.Thereisnoallowanceinstatestatutetodropadayofschoolduetopoorattendanceandmakethatdayupwithanotherday.Ifthedistrictattendedschoolthedaymustbereportedunlessitdidnotmeettheminimumdaylengthtocountasadayofschoolaccordingtostatestatute.
Zero (“0”) Hour ‐ The attendance of students taking a Zero( 0 )Hour Theattendanceofstudentstakingaclassinazero(“0”)hourisnotincludedintheattendancereportedforstateaidsincethatzerohourisnotpartofthedistrict’scalendarhoursinsession.
Attendance Hours NOT Allowed to be Claimed for State Aid
ExcusedAbsences‐ Adistrictmayhavepoliciesallowing an excused absence for various
16
allowinganexcusedabsenceforvariouspurposessuchasillness,religiousbeliefs,testing,etc,however,thereisnoauthoritytogiveattendancecreditforstudentsneitherinattendancenorunderthedirectsupervisionofacertificated teachercertificatedteacher.
9
Attendance Hours NOT Allowed to be Claimed for State Aid
SummerSchoolCoursesnotallowedtobeclaimedforstate aid.
17
stateaid.NotEligibletobeClaimedforStateAid
AthleticpracticesBodyconditioning,weight‐lifting,football,orotherteam
sportsprograms
PEcoursethatdoesnotqualifyforcreditcountingtowards
graduation
Gymnastics,Tennis,Swimminglessons,TeamSports
ProgramFullyFundedbyFederalMonies
SummerCamps (recreational,sport,music,band,danceetc.)
Cheerleadingclinics Recreationprograms
Tuition‐basedactivities Studyhall ComputercampsCollegeorUniversity
Orientation
Fee‐basedactivities(schoolorprovider)
PEclasseswithoutcredittowardsgraduation
Band/vocal/instrumentalmusicpracticesorcamps
Community‐basedpublic,privateorothernon‐academic
programsSummerPrograms offeredbyCommunity‐widepublicand
privateagencies
ActivitiesthatstudentsareabletoenrollandparticipateinindependentlyoftheLEA
Day‐CareServicesEducationalcourse/ActivitythatisnotofferedbytheLEAduringtheregularschoolyear.
Verification of Data
Mustknowthreethingstoverifythevalidityofattendance data
18
attendancedata.
1. Childwasenrolledinthedistrictatsomepointduringtheyear.
2. Whoshouldbereportingtheattendancehours. SeeExhibit21– StudentResidencyStatusintheCoreDataand
MOSISManual
3. Actualcalendarofdistrictforeachbuildingandgradelevel.
10
Verification of Data
ResidentI – Studentsattendingschoolinthedistrict(includingDYS,MSB,MSDandSSSH)wheretheyreside(reportedbythedistrictwheretheyareenrolled).
19
RegularStudents‐‐ (Including:Employee'schild,Fosterchild,Homelesschild,VoluntaryTransferStudent(VTS))
CharterSchools
JobCorpSites(Federallyoperatedprogram)
JuvenileDetentionCenters(publiclyplaced)
StudentsreceivingSpecialEducationServicesinSt.LouisCounty‐‐ St.LouisCountyComponentDistricts(CountyDistrictCodeBeginswith096)‐‐ St.LouisSpecialSchoolDistrict(SSD)SelfContainedBuildingsp ( ) g‐‐ St.LouisSpecialSchoolDistrict(SSD)VocationalSchoolFullTimeStudents
StateOperatedSchools‐‐ DivisionofYouthServices(DYS)‐‐ MissouriSchoolfortheBlind(MSB)‐‐ MissouriSchoolfortheDeaf(MSD)‐‐ MissouriStateSchoolfortheSeverelyHandicapped(SSSH)
Verification of Data
ResidentIIPublic ‐‐ Studentsresidinginonedistrictbutattendingschoolinanotherdistrictforwhichtheresidentdistrictispayingfulltuition(reportedbythe district where they are enrolled)
20
thedistrictwheretheyareenrolled).
HighSchoolstudentsfromK‐8Districts
StudentsfromUnaccreditedSchoolDistricts
ResidentIIPrivate ‐‐ Studentsresidinginonedistrictbutattendingschoolinanotherapprovedfacilityforwhichtheresidentdistrictispayingfulltuition(reportedbytheresidentdistrict).
Studentsattendingaprivatefacility
Cooperative Agreements – A negotiated payment structure is in place. (District CooperativeAgreements Anegotiatedpaymentstructureisinplace.(DistrictwherestudentattendsprovidesthedatatothedistrictofresidencewhichthenreportsthedatatoDESEasResidentIstudents.)
Alternativeschoolprogram;
SpecialEdCoops/SpecialEdCollaborative
StudentsattendingAreaCareerCenterPrograms
OtherCooperativeAgreements
11
Verification of Data
PayingTuition ‐‐ StudentsattendingschoolinadistrictotherthanwheretheyresideasaresultoftheirParent/Guardianpayingtuition.(Note:Districtsd t i St t Aid f St d t th t t id t ) ( t d b th
21
donotreceiveStateAidforStudentsthatarenotresidents)– (reportedbythedistrictwheretheyareenrolledasParentTuition).
Verification of Data
Comparetotalhoursreportedperstudent(attendance plus absent hours) to the total calendar
22
(attendanceplusabsenthours)tothetotalcalendarforthatstudentsbuildingandgradelevel. Ifstudentwasenrolledallyearandafull‐timestudentthetotalhoursshouldbethesameasthecalendar.
Compare attendance percentage (total attendance Compareattendancepercentage(totalattendancehoursdividedbytotalhours)toprioryearattendancepercentages. Follow‐uponratesthatappeartoohighortoolow.
12
Verification of Data
Compareremediationhourstoprioryears.F ll diff
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Followuponanypercentagedifferencegreaterthan10to15percent.
Comparesummerschoolattendancehourstoverifytheyfallwithinareasonablerangeofpossiblesummerschoolhours.Mi i 60 i 419Minimum60maximum419.
Inclement Weather
InclementWeather,forthepurposeofthissection,shallbedefinedasice,snow,extremecold,flooding,oratornado,butsuchtermshallnot
24
includeexcessiveheat.
Daysmissedforreasonsotherthaninclementweatherhavetobemadeup
Districtsarerequiredtomakeupthefirst6dayslostduetoinclementweatherandarerequiredtomakeupthe7th dayandareforgiventhe8th,requiredtomakeupthe9th andforgiventhe10th andsoforthuntil10dayshavebeenmadeup
Specificinformationandfrequentlyaskedquestionsregardinginclementweathercanbelocatedathttp://dese.mo.gov/divadm/finance/topicsandprocedures/documents/sf‐InclementWeather.pdf
13
School Calendar Options
1. Atraditionalcalendarmaybeadoptedwhichrequirestheschoolboardtoprovideaminimumtermofatleast174daysand1,044hoursofinstruction,171 031 1 RSM
25
171.031.1,RSMo
a. Minimumrequiredhoursinaschooldayof3hoursperSection160.041.1,RSMo
b. Maximumpossiblehoursinaschooldayof7hoursperSection171.031.7,RSMo
2. Acalendaroflessthan174daysmaybeadoptedbytheschoolboardthatprovidesaminimumofatleast1,044hoursofinstruction,171.029.1,RSMo
a Minimum required hours in a school day of 4 hours per Sectiona. Minimumrequiredhoursinaschooldayof4hoursperSection160.041.1,RSMo
b. Maximumpossiblehoursinaschooldayof8hoursperSection171.031.7,RSMo
School Calendar Options
3. Acalendarof142days(fourdaysperweek)maybeadopted by the school board that provides a minimum of
26
adoptedbytheschoolboardthatprovidesaminimumofatleast1,0444hoursofinstruction,171.031.1,RSMoa. Minimumrequiredhoursinaschooldayof4hoursperSection
160.041.1,RSMob. Maximumpossiblehoursinaschooldayof8hoursperSection
171.031.7,RSMo
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School Calendar
Thereisadayrequirement Three calendar options that have been discussed
27
Threecalendaroptionsthathavebeendiscussed
Districtscannotoperateunderhoursonly
DistrictswillreporttheplannedcalendartothedepartmentbyAugust15ofeachyear
Oncethetypeofcalendarhasbeenestablishedbythedistrictthenumberofdaysofplannedattendancecan’tbechangedchanged
Districtsplannedcalendarswillbeusedwhendeterminingifadistricthasgonetherequirednumberofdaysinayear
School Calendar
Aschooldayendingbeforetheminimumrequiredhourson class time does not count toward the day requirement
28
onclasstimedoesnotcounttowardthedayrequirementandthehoursdonotcounttowardthe1,044hourrequirement Thedayisnotalegalday
Thehoursanddaydonotcountforstateaidpurposes
Hoursarenotreportedasapartoftheschooldistrict’scalendarandtheattendancehoursarenotreportedfortheADApcalculationforstateaidpurposes
15
Why Do We Care
BasicFormulaCalculationA f l l i A D il A d
29
AfactortocalculatingAverageDailyAttendance.NumbercaninfluenceBasicFormulamoniesreceivedbythedistrict.
FederalandStateAccountability.
573‐751‐0357
Contact Us30
1
How the Changes to Single Audits and
Federal Grant Rules Impact You
Overview and History of the Super Circular
Agenda
Changes to Single Audit Requirements
Changes to Federal Cost Principles
Changes to Administrative Requirements
Action Steps for Entities Receiving Federal Action Steps for Entities Receiving Federal Grants
2
2
Overview and History of the Super Circular
Rules associated with federal grants are overseen by the Office of Management and
Background
overseen by the Office of Management and Budget (OMB), which is part of the executive branch of the federal government
OMB issues “Circulars” which set forth the various rules governing federal awards and
dit f f d l daudits of federal awards
4
3
Historically, Single Audit requirements have been located in OMB Circular A 133
Background
been located in OMB Circular A-133
Historically, cost principles guidance has been located as follows: OMB Circular A-21 – Educational Institutions OMB Circular A-87 – State Governments, Local
Governments, Indian Tribes OMB Circular A-122 – Not-for-Profit Organizations
5
Guidance has been complicated and difficult to understand
Background
to understand
Cost principles differ between the three cost circulars
Thus, OMB undertook a major project to overhaul and streamline federal award overhaul and streamline federal award guidance
6
4
Streamline the federal grant-making process
Project Objectives
Increase the efficiency and effectiveness of federal programs
Ease administrative burden for grant applicants
Eliminate unnecessary and duplicative i trequirements
7
Focus on areas that achieve better outcomes at a lower cost
Project Objectives
at a lower cost
Reduce the risk of waste, fraud and abuse
8
5
October 2011 – Council of Financial Assistance Reform (COFAR) established
Project Timeline
Reform (COFAR) established
February 28, 2012 – Advance Notice of Proposed Guidance issued—contained preliminary ideas OMB was considering and was subject to public comment
9
January 31, 2013 – Proposed OMB Uniform Guidance issued contained more refined
OMB Super Circular
Guidance issued—contained more refined, specific proposed OMB regulations and was also subject to public comment
December 26, 2013 – Uniform Administrative Requirements, Cost Principles, and Audit R i t f F d l A d i dRequirements for Federal Awards issued—represents final document containing final regulations
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6
Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal
OMB Super Circular
Principles, and Audit Requirements for Federal Awards is codified into Title 2, Part 200, of the Code of Federal Regulations
Referred to as the “Super Circular”, “Omni Circular” or “Uniform Guidance”
11
Circulars Replaced or Modified by Super Circular
12
7
Federal agencies must implement the requirements by December 26 2014
Effective Dates
requirements by December 26, 2014
Non-federal entities must implement the new administrative requirements and cost principles beginning December 26, 2014 Applies to new and incrementally funded awards
i d ft D b 26 2014issued on or after December 26, 2014
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New Single Audit requirements are effective for fiscal years beginning on or after December 26
Effective Dates
fiscal years beginning on or after December 26, 2014
Thus, first effective for December 31, 2015 fiscal year ends
Early implementation is not permittedEarly implementation is not permitted
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8
Subpart A: Sets forth definitions and acronyms used throughout document
Structure of Super Circular
used throughout document
Subpart B: General provisions including purpose of guidance, its applicability, and effective date
Subpart C: Administrative requirements Subpart C: Administrative requirements directed at federal agencies related to pre-award activities and content of federal awards
15
Subpart D: Administrative Requirements including procurement internal control and
Structure of Super Circular
including procurement, internal control, and subrecipient monitoring
Subpart E: Cost Principles guidance previously found in Circulars A-21, A-87 and A-122
Subpart F: Single Audit requirements previously Subpart F: Single Audit requirements previously found in Circulars A-133 and A-50
16
9
Questions
17
Changes to Single Audit Requirements
10
Single Audit threshold increased from $500,000 to $750 000
Changes to Single Audit Threshold
to $750,000
It is estimated that approximately 5,000 entities will be relieved from Single Audit requirement as a result
Entities below this threshold must still make Entities below this threshold must still make records available for review or audit by federal agencies, pass-through entities, and the Government Accountability Office
19
Determine Type A programs vs. Type B programs
Major Program Determination Steps
programs
Determine high-risk/low-risk Type A programs
Determine high-risk/low-risk Type B programs
Select programs to audit as major
Determine that adequate percentage of coverage has been achieved
20
11
Currently, for entities expending < $100 million in federal awards programs with greater than
Changes to Major Program Determination
federal awards, programs with greater than $300,000 in expenditures or 3% of total expenditures are considered “Type A” Makes it more likely they will be selected as major Have to be audited as major at least once every
three yearsthree years
Super Circular increases the Type A threshold to $750,000
21
Currently, Type A programs are considered high risk (and therefore must be audited as major) if:
Changes to Major Program Determination
risk (and therefore must be audited as major) if: Program was NOT audited as a major program in one
of the two preceding years; OR In the most recent year audited, the program had
findings
22
12
The Super Circular makes a Type A program high risk if in the most recently audited period
Changes to Major Program Determination
high risk if, in the most recently audited period, the program: Did not receive an unqualified opinion; Had a material weakness in internal control; Had questioned costs exceeding 5% of the program’s
expendituresexpenditures
23
Currently, threshold for performing risk assessment of Type B programs is $100 000 or
Changes to Major Program Determination
assessment of Type B programs is $100,000 or 0.3% of total federal expenditures
The Super Circular changes the Type B risk assessment threshold to 25% of the Type A threshold
24
13
Under current guidance, the high-risk Type B programs selected as major must be:
Changes to Major Program Determination
programs selected as major must be: ½ of the high-risk Type B programs, OR One high-risk Type B for each low-risk Type A
The Super Circular changes the first criteria to ¼ of the low-risk Type A programsyp p g
25
Under current guidance, % of federal dollars that must be audited as major is:
Changes to Major Program Determination
that must be audited as major is: 50% for high-risk entities 25% for low risk entities
Under the Super Circular, % of federal dollars that must be audited as major is:j 40% for high-risk entities 20% for low risk entities
26
14
Currently, an entity is a low risk auditee if:Single Audits were performed in each of the past two
Changes to Low-Risk Auditee Criteria
Single Audits were performed in each of the past two years Unqualified opinions on the financial statements and
SEFA in past two years No material weaknesses in internal control in the past
two yearstwo years No material noncompliance or questioned costs >5%
of expenditures for a given award in past two years
27
The Super Circular includes modifications to this, such as:
Changes to Low-Risk Auditee Criteria
such as: Clearly indicates that the federal clearinghouse
submission must have been submitted on time The auditor must NOT have indicated that there is
substantial doubt about the entity’s ability to continue as a going concern Removes the option for waivers in this area
28
15
Currently, a Single Audit finding is required if known or likely questioned costs exceed
Findings
known or likely questioned costs exceed $10,000
The Super Circular increases this threshold to $25,000
Must include a description of how questioned Must include a description of how questioned costs were calculated
29
Findings will now include a perspective section, indicating whether finding is isolated or systemic
Findings
indicating whether finding is isolated or systemic and the type of sampling used
Repeat findings must be identified as such and prior year finding number provided
Summary schedule of prior audit findings must Summary schedule of prior audit findings must include financial statement findings also, and provide a reason why findings recurred
30
16
Proposed OMB Uniform Guidance issued on January 31 2013 by the OMB suggested a
Compliance Requirements
January 31, 2013 by the OMB suggested a reduction of the types of compliance requirements from 14 to 6
31
Compliance Requirements
32
17
Changes to Compliance Requirements have been deferred and will be considered as part of
Compliance Requirements
been deferred and will be considered as part of the annual Compliance Supplement process 2015 Compliance Supplement is expected to be
published in April 2015 Will include changes as a result of the Super Circular,
and any changes to compliance requirementsy g p q
33
New federal audit clearinghouse (FAC) web-site became effective starting with fiscal year
Federal Audit Clearinghouse Submission Reminders
site became effective starting with fiscal year 2013 submissions
The FAC web-site began accepting fiscal year 2014 submissions on October 20, 2014
34
18
FAC website has posted notices indicating that the following requirements will be effective with
Federal Audit Clearinghouse Submission Reminders
the following requirements will be effective with submissions made on or after January 2, 2015: Must use new standard finding numbering system
(2014-001 through 2014-999) Audit submissions must be unlocked, unencrypted
and in a text-searchable PDF format
35
Questions
36
19
Changes to Federal Cost Principles
Indirect Cost Rates
Cost Principles– Key Changes
Time and Effort Reporting
Other Miscellaneous Changes
38
20
Non-federal entities have the option to extend negotiated indirect cost rate for up to four
Indirect Cost Rates
negotiated indirect cost rate for up to four years Only allowed once per negotiated rate cycle Approval of cognizant agency is required There must be no major changes to the entity’s
indirect costsindirect costs Cannot negotiate rate during the extension period
39
Entities that have never had a negotiated indirect cost rate may utilize a minimum flat rate
Indirect Cost Rates
indirect cost rate may utilize a minimum flat rate of 10% Only available if entity receives less than $35 million in
federal funding per year Must keep documentation of this decision on file
40
21
Pass-through entities required to either:Honor the indirect cost rate negotiated by a
Indirect Cost Rates
Honor the indirect cost rate negotiated by a subrecipient at the federal level Negotiate a rate with the subrecipient in accordance
with federal guidelines Provide a minimum flat rate
41
Big picture changes:Greater flexibility in time and
Time and Effort Reporting
Greater flexibility in time and effort reporting Focuses on internal controls
that should be in place to justify salaries and wages, and provides latitude in meeting h d dthose standards
Personnel activity reports encouraged but no longer required
42
22
Records supporting salaries and wages must:Be supported by a system of internal control which
Time and Effort Reporting
Be supported by a system of internal control which provides reasonable assurance that charges are accurate, allowable, and properly allocated Be incorporated into the entity’s official records Reasonably reflect the total activity for which the
employee is compensated, not exceeding 100% of employee is compensated, not exceeding 100% of compensated activities
43
Records supporting salaries and wages must:Comply with the established accounting policies and
Time and Effort Reporting
Comply with the established accounting policies and practices of the entity Support the distribution of the employee’s salary or
wages among specific activities or cost objectives
44
23
Budget estimates determined before services are performed:
Time and Effort Reporting
are performed: Do NOT qualify as support for payroll costs May be used for interim accounting purposes under
certain circumstances if trued up later
45
Use of percentages and estimates:Records may reflect distribution of time as a
Time and Effort Reporting
Records may reflect distribution of time as a percentage as opposed to by hours Rules acknowledge that some estimates are
necessary to allocate time between teaching, research, service and administration in an academic setting
46
24
If records meet the requirements described above entities will not be required to provide
Time and Effort Reporting
above, entities will not be required to provide any additional support or documentation for the work performed
If records do NOT meet the requirements described above, the federal government may
i l ti it t tifi ti require personal activity reports, certifications, or equivalent documentation
47
For non-exempt employees, records indicating the total number of hours worked each day are
Time and Effort Reporting
the total number of hours worked each day are still required pursuant to Department of Labor regulations
The regulations encourage cognizant agencies to approve alternative proposals based on
t il t f outcomes or milestones for program performance. If approved, these would be an acceptable alternative for the time and effort reporting requirements.
48
25
In an effort to encourage entities to have family friendly policies the following costs are
Dependent Care Costs for Conferences
family-friendly policies, the following costs are allowable: For hosts of conferences, the cost of identifying (but
not providing) locally available child-care resources Temporary dependent care costs that result directly
from travel to conferences
49
The annual and final fiscal reports or vouchers requesting payment under a federal award
Required Certifications
requesting payment under a federal award must include a certification
Certification must be signed by an official that can legally bind the organization
50
26
“By signing this report, I certify to the best of my knowledge and belief that the report is true,
Certification Language
knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to
i i l i il d i i t ti lti f f d criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise. (U.S. Code Title 18, Section 1001, and Title 31, Sections 3729-3730 and 3801-3812).”
51
Section 200.407 of the Super Circular provides one location that entities can consult for all
Other Requirements
one location that entities can consult for all circumstances in which prior approval from the federal awarding agency is required.
Increases the threshold to $50 million from $25 million for filing a cost-accounting disclosure t t t f l b th f di statement for approval by the funding agency
52
27
For fiscal years beginning on or after January 1, 2016 financing costs associated with patents
Other Requirements
2016, financing costs associated with patents and computer software are allowable
Note that the cost principles included in Subpart E do not include cost principles for hospitals. OMB has indicated that these will be
dd d t l t d tadded at a later date.
53
Questions
54
28
Changes to Administrative Requirements
Procurement Requirements
Administrative Requirements – Key Changes
Contractor vs. Subrecipient Determination
Pass-Through Entity Responsibilities
Internal Control
Property StandardsProperty Standards
Interest Earned on Advances
Personally Identifiable Information
56
29
The Super Circular defines five methods of procurement to be used:
Procurement Requirements
procurement to be used: Micro purchases – less than $3,000 (or $2,000 for
construction subject to Davis Bacon) Small purchases – $3,000 to $150,000 (the Simplified
Acquisition Threshold) Sealed bid purchases – Over $150 000; preferred for Sealed bid purchases Over $150,000; preferred for
construction
57
The Super Circular defines five methods of procurement to be used:
Procurement Requirements
procurement to be used: Competitive proposal purchases – Over $150,000;
used when a sealed bid is not appropriate Noncompetitive purchases – special circumstances
applicable to all levels
58
30
All five procurement types must comply with the Procurement Standards in section 200 318:
All 5 Procurement Type Compliance
the Procurement Standards in section 200.318: (1) the purchase complies with the non-Federal
entity’s documented procedures in place, (2) purchases are necessary, (3) open competition (to the extent required by each
method) method), (4) conflict of interest policy and (5) proper documentation for the purchases.
Purchase orders may be awarded without soliciting competitive quotations if costs are
Micro Purchases
soliciting competitive quotations if costs are considered reasonable by the entity
To the extent possible, purchases must be distributed equitably among qualified suppliers
60
31
Price or rate quotations must be obtained from an adequate number of qualified sources
Small Purchases
an adequate number of qualified sources
The number of quotations obtained and the form of the quotations (e.g. writing, orally, price list on website, generated by online search engine) are up to the entity
61
Bids are publicly solicited
Sealed Bid Purchases
Firm, fixed price contract awarded to lowest responsible bidder
Invitation for bids must be publicly solicited providing sufficient response time before the bid openingbid opening
Invitation must include necessary specifications for the bidder to properly respond
62
32
Bids are opened at the time and place prescribed in the invitation for bids
Sealed Bid Purchases
prescribed in the invitation for bids
Any and all bids may be rejected if there is a sound documented reason
63
Complete, adequate, and realistic specification or purchase description is
Conditions Necessary for Sealed Bid Purchases
specification or purchase description is available
Two or more responsible bidders are willing and able to compete effectively for the business
The procurement lends itself to a firm fixed price The procurement lends itself to a firm fixed price contract and the selection of a successful bidder can be made principally on the basis of price
64
33
Used when conditions are not appropriate for sealed bids
Competitive Proposal Purchases
sealed bids
Requests for proposals are publicized and identify evaluation factors
Proposals solicited from an adequate number of qualified sourcesof qualified sources
Must use written method for conducting technical evaluations of the proposals received
65
Contracts awarded to the responsible firm whose proposal is
Competitive Proposal Purchases
responsible firm whose proposal is most advantageous to the program, with price and other factors considered
For architectural and engineering i it i t bl t services, it is acceptable to
evaluate competitors’ qualifications, select the most qualified, and then negotiate a fair and reasonable price
66
34
Only permitted when one or more of the following circumstances apply:
Noncompetitive purchases
following circumstances apply: The item is only available from a single source Public exigency or emergency Federal awarding agency or pass-through entity
authorizes noncompetitive proposalsf li i i f b f i i After solicitation of a number of sources, competition
is determined inadequate
67
The Procurement “Claw”
68
35
The Federal government will provide a grace period after the effective date for non federal
Grace Period
period after the effective date for non-federal entities to comply with the procurement standards For one full fiscal year after the effective date of the
Super Circular. For the non-Federal entity’s first full fiscal year that For the non Federal entity s first full fiscal year that
begins on or after December 26, 2014, the non-Federal entity must document whether it is in compliance with the old or new standard, and must meet the documented standard.
For example, the first full fiscal year for a non-Federal entity with a June 30th year end would be the year
Grace Period
entity with a June 30th year end would be the year ending June 30, 2016. The Single Audit Compliance Supplement will instruct auditors to review procurement policies and procedures based on the documented standard. For future fiscal years, all non-Federal entities will be required to comply fully with the super circular.
36
The Super Circular procurement standards do not apply to procurements made in indirect
Methods of Procurement and Indirect Costs
not apply to procurements made in indirect cost areas. They apply to procurements for goods and services that are directly charged to a Federal award. Example: Super Circular procurement would not have
to be followed when hiring a plumber to fix a broken g ppipe in the headquarters building
The term “contractor” replaces the term “vendor” going forward
Contractor vs. Subrecipient
vendor going forward
The Super Circular provides guidance to differentiate between contractor and subrecipient
Must look to substance of the award, not Must look to substance of the award, not merely titles used
72
37
A subaward is for the purpose of carrying out a portion of the Federal Award
Subrecipient
portion of the Federal Award
Creates a Federal assistance relationship with the subrecipient
73
Determines who is eligible to receive assistance
Characteristics of a Subrecipient
Has its performance measured against objectives of a federal program
Has a responsibility for programmatic decision making
M t dh t f d l i tMust adhere to federal program requirements
Uses funds to carry out a program for a public purpose
74
38
A contract is for the purpose of obtaining goods and services for entity’s own use
Contractor
goods and services for entity s own use
Creates a procurement relationship with the contractor
75
Provides goods/services within normal business operations
Characteristics of a Contractor
operations
Provides similar goods/services to many purchasers
Normally operates in a competitive environment
Provides goods/services ancillary to program
Not subject to federal compliance requirements
76
39
The Super circular requires that pass-through entities clearly communicate that an award is
Pass-Through Entity Responsibilities
entities clearly communicate that an award is federal in origin and specifies data elements that pass-through entities must provide to subrecipients.
77
Data to communicate to subrecipients:Subrecipient name
Pass-Through Entity Responsibilities
Subrecipient name Subrecipient DUNS number Federal Award Identification Number (FAIN) Federal Award Date Subaward Period of Performance Start and End Date Amount of Federal Awards Obligated by This Action
78
40
Data to communicate to subrecipients:Total Federal Awards Obligated to Subrecipient
Pass-Through Entity Responsibilities
Total Federal Awards Obligated to Subrecipient Total Amount of Federal Award Federal award project description Federal Award Date Name of Federal Awarding Agencyg g y Name of Pass-Through Entity Contact Name For Awarding Official
79
Data to communicate to subrecipients:CFDA Number and Name
Pass-Through Entity Responsibilities
CFDA Number and Name Identification of Whether the Award is R&D Indirect Cost Rate for The Award (including if the de
minimis rate is used)
80
41
The Super Circular requires entities to perform risk assessment procedures over subrecipients
Pass-Through Entity Responsibilities
risk assessment procedures over subrecipients to determine the appropriate level of subrecipient monitoring necessary
81
Pass-through entities must monitor subrecipients by:
Pass-Through Entity Responsibilities
by: Reviewing financial and programmatic reports
required by the pass-through entity Ensuring timely and appropriate action is taken to
resolve all deficiencies pertaining to the federal award identified through audits and on-site reviews Issuing a management decision for audit findings
pertaining to the federal award
82
42
Pass-through entities must monitor subrecipients by:
Pass-Through Entity Responsibilities
by: Provide training to subrecipients as necessary Performing on-site reviews as necessary Arranging for agreed-upon procedures engagements
as necessaryif h h b i i h Si l di Verify that each subrecipient has a Single Audit
performed if required to do so
83
The Super Circular explicitly requires that entities establish and maintain effective internal control
Internal Control
establish and maintain effective internal control that provides assurance that an entity is managing federal awards in compliance with federal statutes, regulations, and terms and conditions of federal awards
M h li it th t t l t d Much more explicit than current grant-related requirements
84
43
The Super Circular states that an entity’s internal controls “should” be in compliance with:
Internal Control
controls should be in compliance with: GAO’s Standards for Internal Controls in the Federal
Government (Green Book) COSO’s Internal Control Integrated Framework
COFAR’s Q&A document issued in August 2014 clarifies that “should” in this context means these frameworks are best practices, not a prescriptive requirement
85
Computers are considered to be supplies (not equipment) if acquisition cost is below the lesser
Property Standards
equipment) if acquisition cost is below the lesser of $5,000 or the client’s capitalization threshold
Equipment no longer needed for federal award with fair market value < $5,000 may be retained, sold or disposed of with no further
bli ti t th f d l di obligation to the federal awarding agency
86
44
For equipment no longer needed for federal award with fair market value > $5 000 the entity
Property Standards
award with fair market value > $5,000, the entity must request disposition instructions from the federal awarding agency
If no disposition instructions within 120 days, entity may sell or dispose of the equipment
Federal agency is entitled to its proportional share of fair market value or sales proceeds
87
Threshold below which interest earnings may be retained increased from $250 to $500
Interest Earned on Advances
retained increased from $250 to $500
All required interest earning remittances must be remitted annually to specific Department of Health and Human Services address Previously, entities were required to remit this interest
“ tl ” t h f d l di “promptly” to each federal awarding agency
88
45
Super Circular defines protected PII first name or first initial and
Personally Identifiable Information (PII)
PII—first name or first initial and last name in combination with: Social security number Passport number Credit card number Clearances Bank numbers
89
Specifies protected PII—first name or first initial in last name in combination with:
Personally Identifiable Information (PII)
in last name in combination with: Biometrics Date or place of birth Mother’s maiden name Criminal, medical and financial records Educational transcripts
90
46
Requires entities to take reasonable steps to safeguard protected PII
Personally Identifiable Information (PII)
safeguard protected PII
Requires that auditee certify that there is no protected PII in submitted Single Audit reporting package
91
Questions
92
47
Action StepsAction Steps
Determine that your procurement procedures are in compliance with the Super Circular
Action Steps to Prepare for Implementation of Super Circular
are in compliance with the Super Circular
Determine that your time and effort reporting system is in compliance with the Super Circular
Evaluate whether you will request an indirect cost rate extension or use the 10% de minimis raterate
Using the new criteria in the Super Circular, make contractor vs. subrecipient determinations
94
48
Determine whether you are providing subrecipients the required information and that
Action Steps to Prepare for Implementation of Super Circular
subrecipients the required information and that you are performing required monitoring steps
Evaluate your internal control structure—does it measure up to COSO and/or the Green Book?
Determine that your financial reporting system Determine that your financial reporting system tracks and captures all necessary data for federal awards
95
Evaluate property purchased with federal funds will you dispose of any of it given the
Action Steps to Prepare for Implementation of Super Circular
funds—will you dispose of any of it given the new guidelines?
Ensure required certifications are in place for annual and final reports and identify certifying official
Evaluate the impact of the changes to Single Audit requirements, and determine the status of prior year audit findings
96
49
Verify that your Single Audit report will meet the latest FAC requirements for finding numbering
Action Steps to Prepare for Implementation of Super Circular
latest FAC requirements for finding numbering and text searchability
Determine that you have appropriate internal controls in place to safeguard PII
97
Questions
98
1
FINANCIALANDADMINISTRATIVE
SERVICESSERVICES
AuditReportDeskReviews
MissouriDepartmentofElementaryandSecondaryEducationMay5,2015
Preliminary Review
PreliminaryReviewI d d t A dit ’ R t IndependentAuditor’sReport Scopeoftheaudit ConductedinaccordancewithauditingstandardsgenerallyacceptedintheUSA
Theappropriateopinionparagraphforthebasisofaccounting
l S d FinancialStatementsandNotes Government‐wideFS FundFinancialStatements(General,SpecialRevenue,DebtService,andCapitalProjects)
2
Preliminary Review cont.
FinancialStatementsandNotescont. Indication of fraud or significant event in the notes Indicationoffraudorsignificanteventinthenotes GASB54compliance
ReportonInternalControlOverFinancialReportingandComplianceandothermattersbasedonanAuditofFinancialStatementsPerformedinAccordancewithGovernmentAuditingStandards
ReportonCompliancewithStateRequirements ScheduleofSelectedStatistics
Preliminary Review cont.
SingleAudit(ifapplicable) Report on Compliance with Requirements Applicable to ReportonCompliancewithRequirementsApplicabletoEachMajorProgramandonInternalControlOverComplianceinAccordancewithOMBCircularA‐133
ScheduleofExpendituresofFederalAwards ScheduleofFindingsandQuestionedCosts Iffindings,thenacorrectiveactionplanmustbesubmittedsubmitted
Other Auditreportiscomplete(signedanddatedbyfirm)
3
Selection Process for Desk Reviews
About25reportsareselectedfordeskreviewl d h l Unusualitemsnotedinthepreliminaryreviewput
thereportonthelistasacandidateforreview.Theseitemscouldinclude:NewCPAfirm UnusuallanguageintheOpinionorStateComplianceRReport
Accrualsincashbasisstatements BudgettoActualmissingforDSandCapProj.fundsNoGASB54MissingaStatement
Overview of Desk Review
Thedeskreviewisamorein‐depthtechnicalreview of the audit report itselfreviewoftheauditreportitself.
ThechecklistsforthedeskreviewswereadaptedfromtheAICPAPeerReviewchecklists.
Eachdistrict(notcharter)selectedreceivesthe“AuditReport”checklistreview.
Eachcharterselectedreceivesthe“Not‐for‐Profit”checklistreview.
4
Overview of Desk Review cont.
Eachdistrict/charterselectedwithasingleauditreceives the “Single Audit” checklist reviewreceivesthe SingleAudit checklistreview.
Oncethechecklistsarecompleted,aletterissenttotheCPAFirmtoadvisethemoftheresultsofthedeskreview.
Ideally,thisprocessshouldbecompletedbyJune30sothatsuggestionstotheauditorscanbeincorporatedintotheirnextyear’sauditreports.
Audit Report Checklist
Fewchangestothedeskreviewprocessbeginning with the FY14 auditsbeginningwiththeFY14audits
NoteDisclosures Accrualdisclosuresarelistedinthechecklist Cashbasisreportsthatdonotincludeadisclosurewon’tbemarkasanerror
l d h d l h l l Includeenoughdisclosuresthereportsusersclearlyunderstandthefinancialstatements
5
Audit Report Checklist cont.
Separatesectionsjustliketheauditreport: Independent Auditor’s Report IndependentAuditor sReport SupplementaryInformationintheAuditor’sReport SEFAinIndependentAuditor’sReport FinancialStatementPresentationManagementDiscussion&Analysis BudgetaryComparisonSchedulesg y pNoteDisclosures ReportingonInternalControlandCompliance ViewsofResponsibleOfficials
Audit Report Checklist cont.
#20e.Measurementfocusandbasisofaccounting applied to the government wideaccountingappliedtothegovernment‐widepresentationsandthefundfinancialstatements.(pg.6)
#20f.Thegovernment’spolicyregardingwhetheritconsidersrestrictedorunrestrictedamo nts to ha e been spent hen anamountstohavebeenspentwhenanexpenditureisincurredforpurposesforwhichbothrestrictedandunrestrictedfundbalanceisavailable.(pg.6)
6
Audit Report Checklist cont.
#21c.Depositspoliciesregardingcustodialcredit risk and foreign currency risk or acreditriskandforeigncurrencyrisk,orastatementthattheentityhasnosuchpolicies.(pg.6)
#22c.Investmentrisksdisclosures:(pg.7) Investmentpoliciesrelatedtorisk Creditqualityratingofinvestments(ifapplicable) Custodialcreditriskforinvestments Interestrateriskofdebtinstruments
Audit Report Checklist cont.
#23.Beginningandendofyearcapitalassetsbalances separated between historical cost andbalancesseparatedbetweenhistoricalcostandaccumulateddepreciation.(pg.7)
Beg.Inc.Dec.EndingCapitalBal.Bal.Assets$1,000$250$500$750 #29f.Riskmanagementandrelatedfinancingactivitiesand/orpublicentityriskpool(pg.9)
7
Audit Report Checklist cont.
#29g.Descriptionofterminationbenefitarrangements significant methods andarrangements,significantmethodsandassumptionsusedtodetermineterminationbenefitsexpenseandliabilities,and,ifnotidentifiableonthefaceofthefinancialstatements,thecostsofterminationbenefitsinthe period obligated (pg 9)theperiodobligated.(pg.9)
Single Audit Checklist
#3d.Notesdescribingsignificantaccountingpolicies in preparing the SEFA (pg 5)policiesinpreparingtheSEFA(pg.5)
#7b.Doesthesummaryofauditor’sresultssectionoftheSFQCcontainastatementthatsignificantdeficienciesormaterialweaknesses,orboth,ininternalcontrolweredisclosedbythea dit of financial statements if applicableauditoffinancialstatements,ifapplicable.(pg.8)
8
Single Audit Checklist cont.
#10.Doestheauditfindingdetailinclude:(pg 10)(pg.10) Referencenumber FederalprogramandspecificfederalawardidentificationincludingCFDAtitleandnumber
FederalawardnumberandyearN f f d lNameoffederalagency
Ifapplicable,nameofpass‐throughentity Appropriateelements Viewoftheresponsibleofficials
Single Audit Checklist Draft-FY16
UpdatingthischecklistfornewOMNIregulationsregulations Addingnewregulations References
9
Charter Schools Checklist
#11a.&12b.Grossamountsofrevenues&expenses (including those for special events thatexpenses(includingthoseforspecialeventsthatareongoingandmajoractivities),andinvestmentrevenuesarereportedeitherinthefootnotesoronthefaceofthefinancialstatements.(pg.7)
Auditor Correspondence
TallyuptheresultsofthechecklistC b d d Combinedistrictsperauditor
Issuealetternotifyingauditorofresults Ideally,thisprocessshouldbecompletedbyJune30sothatsuggestionstotheauditorscanbeincorporatedintotheirnextyear’sauditreports.
Preliminary Review Checklist District_________________ Fiscal year 2014
1 Revised 03/2014
Independent Auditor’s Report
Y N N/A
1. Includes a statement describing the scope of the audit?
2. Includes a statement that the audit was conducted in accordance with auditing standards generally accepted in the USA and the standards applicable to financial audits contained in GAS issued by the Comptroller General of the US?
3. Includes an opinion as to whether the FS present fairly, in all material respects, the financial position of the district for the period then ended in conformity with accounting principles generally accepted in the USA? (GAAP reports only)
4. Includes a paragraph that (1) states the basis of presentation and refers to the
note to the FS that describes the basis and (2) states that the basis of
presentation is an OCBOA? (OCBOA reports only)
5. Includes a paragraph that expresses the auditor’s opinion on whether the FS are
presented fairly, in all material respects, in conformity with the basis of
accounting described? (OCBOA reports only)
Financial Statements and Notes to the Financial Statements
1. Includes government‐wide financial statements?
▪ Statement of Net Assets/Financial Position
▪ Statement of Activities
2. Includes fund statements for the General, Special Revenue, Debt Service, and
Capital Projects funds?
▪ Balance Sheet
▪ Statement of Revenues, Expenditures, and Changes in Fund Balances
▪ Budget to Actuals (not applicable to charter schools)
3. Financial statements or notes do not indicate deficit balances or overdrafts?
4. Notes to the Financial Statements do not indicate fraud, embezzlement, or
other significant event?
5. Financial statements and notes comply with GASB 54? (Not applicable to
charters)
Preliminary Review Checklist District_________________ Fiscal year 2014
2 Revised 03/2014
Y N N/A
Includes Report on Internal Control Over Financial Reporting and Compliance and
other matters based on an Audit of Financial Statements Performed in Accordance
with Government Auditing Standards?
Single Audit
1. Includes Report on Compliance with Requirements Applicable to Each Major
Program and on Internal Control Over Compliance in Accordance with OMB
Circular A‐133?
2. Includes Schedule of Expenditures of Federal Awards and Summary of Auditor’s
Results?
3. If federal findings or questioned costs, was a corrective action plan submitted?
Report on Compliance with State Requirements
1. Includes the auditor’s opinion regarding the district’s conformance to the
budgetary and disbursement requirements of Chapter 67, RSMo? (not
applicable to charter schools)
2. Includes the auditor’s opinion regarding the attendance and transportation
records?
3. Includes the current version of the Schedule of Selected Statistics?
Other
1. If a charter school, a single entity report completed on a July 1 to June 30 fiscal
year?
2. Audit report was signed and dated by CPA firm and appears to be complete? (if
not, considered a draft report)
Review Date ____________ Reviewer __________________________
Comments_____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Preliminary Review Checklist District_________________ Fiscal year 2014
3 Revised 03/2014
______________________________________________________________________________
______________________________________________________________________________
Recommendation Accept Reject
Date District Contacted _________________
1
DESE School Audit Report Checklist‐FY14 Updated for New Clarified Standards Independent Auditor’s Report Yes No N/A 1. Does the report have a title that includes the word
“independent” to clearly indicate that it is the report of an independent auditor? [AU-C700.24 and .A18]
2. Does the introductory paragraph of the report: a. Identify the entity whose financial statements have been
audited and state that the financial statements have been audited?
b. Identify the title of each statement that the financial statements comprise, which may be achieved by referencing the table of contents? [AU-C 700.25 and .A22-.A23; AAG-SLV 14.14]
c. Specify the date or period covered by each financial statement that the financial statements comprise? [AU-C 700.25 and .A20-.A23]
3. Does the report describe management’s responsibility for the preparation and fair presentation of the financial statements, including an explanation that management is responsible for:
a. The preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework?
b. The design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error? [AU-C 700.27 and .A24; AAG-SLV 14.18]
4. Does the report include a section with the heading “Auditor’s Responsibility” and state that the responsibility of the auditor is to express an opinion on the financial statements based on the audit? [AU-C 700.29-.30; AAG-SLV 14.19]
5. Does the report state that the audit was conducted in accordance with GAAS and identify the United States of America as the country of origin? [AU-C 700.31 and .A27-.28; AAG-SLV 14.20]
6. Does the report state that GAAS requires the auditor to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements? [AU-C 700.31 and .A27-.28]
7. Does the auditor’s report describe an audit by stating that: a. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial statements?
b. Procedures selected depend on the auditor’s judgment,
2
including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error?
c. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control, and accordingly, no such opinion is expressed?
d. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management, as well as the overall presentation of the financial statements? [AU-C 700.32]
8. Does the audit’s report state whether the auditor believes that the audit evidence the auditor has obtained is sufficient and appropriate to provide a basis for the auditor’s opinion (s)? [AU-C 700.33]
9. When expressing unmodified opinion(s) on the government’s basic financial statements, does the auditor’s opinion state the financial statements present fairly, in all material respects, in accordance with the applicable financial reporting framework and its origin? [AU-C700.19-.20, .35 and .A29; AAG-SLV 14.04, and .22]
10. If the auditor addresses other reporting responsibilities in the auditor’s report on the financial statements in addition to the auditor’s responsibility under GAAS to report on the financial statements, are those other reporting responsibilities addressed in a separate section titled “Other Reporting Required by Government Auditing Standards”? [AU-C 700.37 and .A32-.A33; AAG-SLV 14.23]
Supplementary information: 11. For supplementary information (SI): a. If the entity presented SI with the financial statements did
the auditor report on the SI in either (1) an other-matter paragraph following the opinion paragraph in the auditor’s report on the financial statements or (2) in a separate report on the SI? [AU-C 725.09]
b. Does the other-matter paragraph on SI or the separate report include the following as applicable:
i. A statement that the audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements?
ii. A statement that the SI is presented for purposes of additional analysis and is not a required part of the basic financial statements?
iii. A statement that the SI is the responsibility of management and was derived from, and relates
3
directly to, the underlying accounting and other records used to prepare the basic financial statements?
iv. A statement that the SI has been subjected to the auditing procedures applied in the auditor of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves and other additional procedures, in accordance with the applicable accounting framework?
v. A statement that, in the auditor’s opinion, the SI is fairly stated, in all material respects, in relation to the basic financial statements as a whole (when an unmodified opinion has been issued on the basic financial statements and the auditor has concluded the SI is fairly stated, in all material respects, in relation to the basic financial statements as a whole)?
vi. A statement that, in the auditor’s opinion, except for the effects on the SI of [refer to the paragraph in the auditor’s report explaining the qualification on the basic financial statements], such information is fairly stated, in all material respects, in relation to the basic financial statements as a whole (when an qualified opinion has been issued on the basic financial statements and the qualification has an effect on the SI)?
12. If a component unit is material to an opinion unit is not required to have an audit in accordance with GAS, has the auditor’s responsibility section of the report on the financial statements been modified to indicate the portion of the entity that was not audited in accordance with GAS? (If it is not evident from the financial statements to which opinion unit the component unit relates, the auditor should consider identifying the opinion unit in addition to the name of the component unit.) [AAG-SLV 4.75-.76]
13. Iftheauditorganizationreportstheseinternalcontrolandcompliancemattersinaseparatereportfromthereportonthefinancialstatements,didtheauditorganization:
a. Includeareferencetotheseparatereportsinthereportonthefinancialstatements?[GASpar.5.08]
b. IncludeastatementthatthereportsoninternalcontrolandcomplianceareanintegralpartofaGAGASauditandimportantinassessingtheresultsoftheaudit?[GASpar.5.09]
SEFA in Independent Auditor’s Report:
4
14. Isthereportonthescheduleofexpendituresincludedin(a)another‐matterparagraphpresentedinaccordancewithAU‐Csection706,Emphasis‐of‐MatterParagraphsandOther‐MatterParagraphsintheIndependentAuditor’sReportor(b)aseparatereportontheschedule?(SeparatereportingcanbeaccomplishedbyeitherincludingthereportinginthereportoncompliancewithrequirementsapplicabletoeachmajorprogramandoninternalcontrolovercomplianceinaccordancewiththeOmniCircularorbyreportinginaseparatestand‐alonereport).[AAG‐SLA7.18,13.11‐.12]
a. Ifinother‐mattersparagraph,anidentificationoftheSEFAasaccompanyingsupplementaryinformationbydescriptivetitleorbypagenumberreference.
b. AstatementthattheauditwasconductedforthepurposeofforminganopiniononthebasicfinancialstatementsandthattheSEFArequiredbytheOmniCircularispresentedforthepurposesofadditionalanalysisandisnotarequiredpartofthebasicfinancialstatements.
c. AnopiniononwhethertheSEFAisfairlystated,inallmaterialrespects,inrelationtothefinancialstatementstakenasawhole.
With Regard to Financial Statement Presentation for Content: 15. Theauditor'sevaluationofwhetherthefinancial
statementsachievefairpresentationinaccordancewiththeapplicablefinancialreportingframeworkrequiresconsiderationoftheoverallpresentation,structureandcontentofthefinancialstatementsandwhethertheyincludetherelatednotes,representstheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.[AU‐C800.A11]
16. Arethefinancialstatementssuitablytitled?[AU‐C800.15]
17. Ifthegovernmentalentitypresentationincludescomponentunits,dothepresentationsmeetthefollowingrequirements,whereapplicable:[GASB2600]
a. Componentunitsthatarefiduciaryinnaturehavebeenproperlyexcludedfromthegovernment‐widepresentationandonlyincludedinthefundfinancialstatements.[GASB2600.107]
b. Condensedfinancialstatementsformajorcomponentunitsinthecomponentunitscolumn(s)(Major
5
componentunitsmaybepresentedinoneofthefollowingthreemanners:(1)separatecolumnsintheentity‐widestatements;(2)combiningstatementsafterthebasicfundstatementsbeforethefootnotes;or(3)condensedfinancialstatementsinthefootnotes.)[GASB2300.107dand2600.108–.111]
Management’sDiscussionandAnalysis: 18. IsManagement’sDiscussionandAnalysis(MD&A)
included?(NotrequiredforspecialpurposefinancialstatementsbyGASBbuthighlyrecommendedbyDESE)[GASB34par.8andGASBCod.Sec.2200.106]
BudgetaryComparisonSchedules/Statements: 19. Doesthepresentationincludethefollowingbudgetary
information,whereapplicable:[GASB2200.181–.183and2400.102–.104]
a. Theoriginalbudget,finalbudget,andactualbalancesfortheauditperiod.[GASB2200.182and2400.102]
b. IfthebudgetaryinformationisdifferentfromGAAPorthebasisofpresentationinthebasicfinancialstatements,accompanyinginformationthatreconcilesbudgetaryinformationtoGAAP/OCBOAinformation(eitherinascheduleorinthenotestoRSI).[GASB2200.183and2400.103and.109–.119]
With Regard to Note Disclosures: (If accrual basis report a letter will be issued for the errors. If cash basis report no letter will be issued for errors since these are disclosures required for accrual basis reporting.)
Summary of Significant Accounting Policies Disclosures: 20. Arethedisclosuresadequateregardingthefollowing
significantaccountingpolicies:
a. Adescriptionofthegovernment‐widefinancialstatements,notingthatneitherfiduciaryfundsnorcomponentunitsthatarefiduciaryinnatureareincluded?[GASB34par.115(GASBCod.Sec.2300.106a)]
b. Adescriptionofcomponentunits,theirrelationshipstotheprimarygovernment,howtheyarereported(blendedordiscretelypresented)andthecriteriaforincludingcomponentunits,howtoobtainseparatefinancialstatementsforindividualcomponentunits,andtheeffectofcomponentunitswithdifferingfiscalyears?[GASB14par.61(GASBcod.Sec.2300.106aand2600.120)]
c. Definitionoftheprimarygovernmentandcomponentunitsthatmakeupthegovernmentalreportingentity
6
andthecriteriausedtodeterminethescopeofthereportingentity.[GASB2300.106aand2600.120]
d. Adescriptionoftheactivitiesaccountedforinthecolumnsformajorfunds,internalservicefunds,andfiduciaryfundtypespresentedinthebasicfinancialstatements.[GASB2300.106a(3)and1300.125]
e. Measurementfocusandbasisofaccountingappliedtothegovernment‐widepresentationsandthefundfinancialstatements.[GASB63par.8(GASBcod.Sec.2300.106a)]
f. Thegovernment’spolicyregardingwhetheritconsidersrestrictedorunrestrictedamountstohavebeenspentwhenanexpenditureisincurredforpurposesforwhichbothrestrictedandunrestrictedfundbalanceisavailable[GASB1800.155and.160c]
g. Thegovernment’spolicyregardingwhethercommitted,assigned,orunassignedamountsareconsideredtohavebeenspentwhenanexpenditureisincurredforpurposesforwhichamountsinanyofthoseunrestrictedfundbalanceclassificationscouldbeused.[GASB1800.155and.160c]
DepositsandInvestmentsDisclosures: 21. Arethefollowingdisclosuresadequateregarding
depositsandinvestments:
a. Disclosuresthatdistinguishbetweentheprimarygovernment,includingblendedcomponentunits,anditsdiscretelypresentedcomponentunits,ifpresented.Alsodiscussionoftheconcentrationofrisk.[GASBC20.104]
b. Legalorcontractualprovisionsaffectingdeposits,includinginterest‐earninginvestmentcontracts,suchasnonnegotiablecertificatesofdeposit,andanysignificantviolationsduringtheperiod.[GASBC20.106]
c. Depositpoliciesregardingcustodialcreditriskandforeigncurrencyrisk,orastatementthattheentityhasnosuchpolicies.[GASBC20.109–.110]
d. Ifapplicable,theamountofanydepositsatperiodendexposedtocustodialcreditrisk,andwhethersuchbalancesareuninsuredorexposedbaseduponhowthedepositcollateralisheld.[GASBC20.107]
7
22. Investments a. Legalorcontractualprovisionsaffectinginvestments,
includinganysignificantviolationsduringtheperiod.[GASBI50.124–.125]
b. Investmentdisclosuresorganizedbyinvestmenttype[GASBI50.123]
c. Thefollowingdisclosuresofinvestmentrisks:[GASBI50.126–.133]
—Investmentpoliciesrelatedtorisk—Creditqualityratingsofinvestmentswhere
applicable—Custodialcreditriskforinvestments—Concentration(5percentormore)riskofcertain
investments—Interestrateriskofdebtinstruments—Foreigncurrencyriskofinvestments
CapitalAssetsDisclosures: 23. Arethefollowingdisclosuresadequateregardingcapital
assets,ifapplicable:
a. Dothenotesdisclosethefollowinginformationaboutcapitalassets(includingintangibleassets),dividedintomajorclassesofcapitalassetsaswellasbetweenassetsassociatedwithgovernmentalactivitiesandthoseassociatedwithbusiness‐typeactivities,andbetweenassetsthatarenotbeingdepreciatedandthosethatarebeingdepreciated:[GASB34par.116(GASBcod.Sec.2300.111)]
—Beginningandend‐of‐yearbalancesseparatedbetweenhistoricalcostandaccumulateddepreciation
—Reportingperiodadditionsandsalesordispositions
—Reportingperioddepreciationexpense,withdisclosureoftheamountschargedtoeachofthefunctionsinthestatementofactivities
b. Themethodormethodsusedtocomputedepreciationforeachmajorclassofdepreciableasset.[GASB63par.8(GASB2300.106)]
c. Policiesforcapitalizingassetsandforestimatingtheusefullivesofthoseassets,andifapplicable,adescriptionofthemodifiedapproachforinfrastructure[GASB2300.106a(7),1400.102and.104].
Long‐TermLiabilitiesDisclosures:
8
24. Arethefollowingdisclosuresadequateregardingnotespayable,bondspayable,revenueorbondanticipationnotes,capitalleasespayable,andotherlong‐termliabilities,ifapplicable:[GASB34par.116(GASBcod.Sec.2300.111)]
a. Beginning‐andend‐of‐yearbalancesbytypeofliability. b. Increasesanddecreasesseparatelypresented. c. Theportionsofeachtypethatareduewithinoneyearof
thestatementdate.
25. Debtservicerequirementstomaturityincludingprincipalandinterestrequirementstomaturity,presentedseparatelyforeachofthefivesubsequentyearsandinfiveyearincrementsthereafter.[GASB38par.10(GASB2300.106mand1500.118)]
InterfundBalancesandTransfersDisclosures: 26. Arethefollowingdisclosuresadequateregarding
interfundbalancesandactivity,ifapplicable:
Forinterfundbalances:[GASB38par.14(GASBcod.Sec.2300.120)]
a. Amountsduefromotherfundsbyindividualmajorfund,nonmajorgovernmentalfundsintheaggregate,nonmajorenterprisefundsintheaggregate,internalservicefundsintheaggregate,andfiduciaryfundtype
b. Thepurposeofinterfundbalances c. Interfundbalancesthatarenotexpectedtoberepaid
withinoneyearfromthedateofthefinancialstatements
27. Forinterfundtransfersandactivity:[GASB38par.14(GASBcod.Sec.2300.121)]
a. Amountsduefromotherfundsbyindividualmajorfund,nonmajorgovernmentalfundsintheaggregate,nonmajorenterprisefundsintheaggregate,internalservicefundsintheaggregate,andfiduciaryfundtype.
b. Ageneraldescriptionoftheprinciplepurposesoftheinterfundtransfers.
c. Foreachmajorcomponentunit,thenatureandamountofany significanttransactionswithotherdiscretelypresentedcomponentunitsorwiththeprimarygovernment
EquityandReconciliationDisclosureRequirements: 28. Iftheinformationisnotapparentfromthefaceofthe
financialstatements,dothenotesdisclosethefollowingtotheextentapplicable,detailedexplanationsofthereconciliationsbetweenthefundandgovernment‐widefinancialstatements?[GASB1800.141–.146,2300.107cc,2200.119–.121,.154,
9
.158;AAG‐SLV10.08–.18and10.23] OtherDisclosureRequirements: 29. Ifmaterial,arethepresentationsappropriateandare
disclosuresadequateregardingthefollowingotherdisclosurerequirements:
a. Accountingchanges[CTA06] b. Annualpensioncost,netpensionobligationandother
pensionactivities,andotherplanandfundingdisclosuresforemployerreporting[GASB2300.106g,2300.107n,P20](Districtswiththeirownplans)
c. ForperiodsbeginningafterJune15,2007orforwhichGASB‐50,PensionDisclosures,hasbeenearlyimplemented,thelegalorcontractualmaximumcontributionsrates,fundingpolicydisclosures,andforsole‐andagent‐definedbenefitpensionplansthefundedstatusoftheplanasofthemostrecentactuarialvaluation[GASB50](DistrictsparticipatinginPSRSandPEERS)
d. Annualotherpostemploymentbenefits(OPEB)costs,netOPEBobligation(ifGASB45,AccountingandFinancialReportingbyEmployersforPostemploymentBenefitsOtherThanPensions,hasbeenimplemented),andotherplanandfundingdisclosuresforemployerreporting[GASB2300.107oandP50.105–.107]
e. Detailofthegovernment’spropertytaxcalendar,includingthelien,levy,dueandcollectiondates[GASBP70.109]
f. Riskmanagementandrelatedfinancingactivities[GASB2300.107aandC50.145–.146]and/orpublicentityriskpools[GASBPo20]
g. Descriptionofterminationbenefitarrangements,significantmethodsandassumptionsusedtodetermineterminationbenefitexpensesandliabilities,and,ifnotidentifiableonthefaceofthefinancialstatements,thecostsofterminationbenefitsintheperiodobligated[GASB2300.107hhandT25.114–.117]
h. Commitmentsunderoperatingleases[GASB2300.106jandL.20.124–.125]
WithRegardtoReportingonInternalControlandCompliancewithLaws,Regulations,andProvisionsofContractsorGrantAgreements:
30. Didtheauditor’sreportsoninternalcontrolandcomplianceandothermattersbaseduponanauditoffinancialstatementsperformedinaccordancewithGovernmentAuditingStandardsincludeallrequired
10
elementsasfollows?[AAG‐SLA4.54]
a. Astatementthattheauditorhasauditedthefinancialstatementsoftheauditeeandareferencetotheauditor’sreportontheentity’sfinancialstatementsand,ifapplicable,adescriptionofanydeparturesfromthestandardreport.[AAG‐SLA4.54b]
b. AstatementthattheauditwasconductedinaccordancewithGAASandanidentificationoftheUnitedStatesasthecountryoforiginofthosestandardsandwiththestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandardsissuedbytheComptrollerGeneraloftheUnitedStates.Note:IfthefinancialstatementsincludeorganizationalunitsthatwerenotrequiredtohaveaGASaudit,theauditorshouldconsidermodifyingthisscopestatement.
c. Astatementthatinplanningandperformingtheaudit,theauditorconsideredtheauditee’sinternalcontroloverfinancialreportingtodeterminetheauditingproceduresforthepurposeofexpressinganopiniononthefinancialstatements,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheauditee’sinternalcontrol;andaccordingly,doesnotexpressanopinionontheeffectivenessoftheauditee’sinternalcontrol?
d. Thedefinitionofcontroldeficiencyandsignificantdeficiencyand,ifapplicable,astatementthatdeficiencieswereidentifiedthatareconsideredtobesignificantdeficiencies.
e. Astatementthattheconsiderationofinternalcontrolwouldnotnecessarilydiscloseallmattersininternalcontroloverfinancialreportingthatmightbesignificantdeficienciesormaterialweaknesses.
f. Ifsignificantdeficienciesarenoted,astatementthatcertaindeficiencieswereidentifiedthattheauditorconsiderstobesignificantdeficiencies.
g. Ifapplicable,adescriptionofthesignificantdeficienciesidentified(includingtheviewsofresponsibleofficialsandtheirplannedcorrectiveaction)orreferencetoaseparatescheduleinwhichthesignificantdeficiencies,views,andplannedcorrectiveactionaredescribed.
h. Thedefinitionofamaterialweakness i. Ifnosignificantdeficienciesareidentified,astatement
thatnomaterialweaknesseswerenoted;or,ifsignificant
11
deficienciesarenoted,astatementaboutwhethertheauditorbelievesanyofthesignificantdeficienciesarematerialweaknesses.
j. Astatementthataspartofobtainingreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement,theauditorhasperformedtestsoftheentity’scompliancewithcertainprovisionsoflaws,regulations,contracts,andgrantagreements(noncompliancewithwhichcouldhaveadirectandmaterialeffectonthedeterminationoffinancialstatementamounts).
k. Astatementthattheobjectiveofthefinancialstatementauditisnottoprovideanopiniononcompliancewiththoseprovisions,and,accordingly,theauditordoesnotexpresssuchanopinion.
Note:Ifsufficientworkisperformed,GASpermits,butdoesnotrequire,auditorstoexpressanopiniononcompliance.Ifanopinionisexpressed,thestatementshouldbemodifiedaccordingly.
l. AstatementthatnoteswhethertheresultsoftestsdisclosedinstancesofnoncomplianceorothermattersthatarerequiredtobereportedunderGovernmentAuditingStandardsand,iftheyare,describesthematters(includingtheviewsofresponsibleofficialsandtheirplannedcorrectiveaction)orreferstotheseparatescheduleinwhichthenoncompliance,views,andplannedcorrectiveactionaredescribed.
m. Astatementthattheauditordidnotaudittheentity’sresponseandexpressesnoopiniononitiftheentity’sresponses(viewsofresponsibleofficialsandcorrectiveactionplan)tothefindingsareincludedinthereportortheseparatescheduleoffindings.
n. Astatementthatothermatters(thatis,(1)deficienciesininternalcontrolthatarenotsignificantdeficienciesand(2)immaterialviolationsofprovisionsofcontractsorgrantagreementsandimmaterialabuse,otherthanthosethatareclearlyinconsequential)werecommunicatedtotheentityinamanagementletter,ifamanagementletterwasissued.
o. Aseparateparagraphattheendofthereportindicatingthereportisintendedsolelyfortheinformationanduseofmanagementaswellasthosechargedwithgovernance,anyotherswithintheentity,and,ifapplicable,legislativeorregulatorybodiesandisnot
12
intendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.
p. Themanualorprintedsignatureoftheauditorganization
q. Thedateoftheauditor’sreportNote:BecausethereportoninternalcontroloverfinancialreportingandoncompliancerelatestotheauditofthefinancialstatementsandisbasedontheGAASauditproceduresperformed,itshouldcarrythesamedateastheauditor’sreportonthefinancialstatements.
WithRegardtoReportingViewsofResponsibleOfficials: 31. Forreportedfindingsrelatedtointernalcontrol
deficienciesorfraud,illegalacts,violationsofprovisionsofcontractsorgrantagreements,orabuse,didtheauditorganizationobtainandreporttheviewsofresponsibleofficialsaswellasplannedcorrectiveaction?[GAS4.33;AAG‐SLA4.63]
32. Iftheauditedentityrefusestoprovidecommentsorisunabletoprovidecommentswithinareasonableperiodoftime,doestheauditor’sreportstatethattheauditedentitydidnotprovidecomments?[GAS4.33‐.39;AAG‐SLA4.63‐.66]
Note:ThischecklistisderivedprimarilyfromthepronouncementsoftheGASBandtheAICPA.Fordetailedinformationconcerningtheserequirements,thereviewermaywishtoconsulttheauthoritativeliteratureoftheabovenotedorganizationsaswellastheAICPAPracticeAids,ChecklistsandIllustrativeFinancialStatementsforStateandLocalGovernments,andAuditingGovernmentalFinancialStatements:ProgramsandOtherPracticeAids.All“No”answersmustbethoroughlyexplained.
DESE Single Audit Report Checklist CoDist # For use with Single Audit reports
Yes No N/A
1
A‐133ComplianceReport:
1. Doesthereportoncompliancewithrequirementsapplicabletoeachmajorprogramandinternalcontrolovercompliancecontaintherequiredelements,asfollows:[AAG‐SLA13.31]
a. AstatementthattheauditorhasauditedthecomplianceoftheauditeewiththetypesofcompliancerequirementsdescribedintheOMBCircularA‐133ComplianceSupplement(ComplianceSupplement)thatcouldhaveadirectandmaterialeffectoneachofitsmajorprograms.
b. Atitlethatincludesthewordindependent
c. Identificationoftheperiodcoveredbythereport
d. Astatementthatcompliancewiththerequirementsoflaws,regulations,contracts,andgrantsapplicabletoeachoftheauditee’smajorfederalprogramsistheresponsibilityoftheauditee’smanagement,andthattheauditor’sresponsibilityistoexpressanopinionontheauditee’scompliancebasedontheaudit
e. AstatementthattheauditofcompliancewasconductedinaccordancewithGAASandanidentificationoftheUnitedStatesasthecountryoforiginofthosestandards(forexample,auditingstandardsgenerallyacceptedintheUnitedStatesorU.S.GAAS),thestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandardsissuedbytheComptrollerGeneraloftheUnitedStates,andCircularA‐133
f. AStatementthatthosestandardsandCircularA‐133requirethattheauditorplanandperformtheaudittoobtainreasonableassuranceaboutwhethernoncompliancewiththetypesofcompliancerequirementsthatcouldhaveadirectandmaterialeffectonamajorfederalprogramoccurred
g. Astatementthatanauditincludesexamining,onatestbasis,evidenceabouttheauditee’scompliancewiththoserequirementsandperformingsuchotherproceduresastheauditorconsiderednecessaryinthecircumstances
h. Astatementthattheauditorbelievesthattheauditprovidesareasonablebasisfortheauditor’sopinion
i. Astatementthattheauditdoesnotprovidealegaldeterminationoftheauditee’scompliancewiththoserequirements
DESE Single Audit Report Checklist CoDist # For use with Single Audit reports
Yes No N/A
2
j. Ifinstancesofnoncompliancearenotedthatresultinanopinionmodification,areferencetoadescriptionintheaccompanyingscheduleoffindingsandquestionedcosts,including
thereferencenumber(s)ofthefinding(s); anidentificationofthetypes(s)of
compliancerequirementsandrelatedmajorprogram(s);and
astatementthatcompliancewithsuchrequirementsisnecessary,intheauditor’sopinion,fortheauditeetocomplywiththerequirementsapplicabletotheprogram(s)
k. Anopiniononwhethertheauditeecomplied,inallmaterialrespects,withthetypesofcompliancerequirementsthatareapplicabletoeachofitsmajorfederalprogramsfortheyearended
l. Ifapplicable,astatementthattheresultsoftheauditingproceduresdisclosedinstancesofnoncompliancethataretobereportedinaccordancewithCircularA‐133andareferencetothescheduleoffindingsandquestionedcostsinwhichtheyaredescribed
ReportonInternalControlOverCompliance:
m. Astatementthattheauditee’smanagementisresponsibleforestablishingandmaintainingeffectiveinternalcontrolovercompliancewiththerequirementsoflaws,regulations,contracts,andgrantsapplicabletofederalprograms
n. Astatementthatinplanningandperformingtheaudit,theauditorconsideredtheauditee’sinternalcontrolovercompliancewiththetypesofrequirementsthatcouldhaveadirectandmaterialeffectonamajorfederalprogram,todeterminetheauditingproceduresforthepurposeofexpressinganopiniononcompliancebutnotforthepurposeofexpressinganopinionontheeffectivenessofinternalcontrolovercompliance
o. Astatementthattheauditor’sconsiderationofinternalcontrolovercompliancewasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliancethatmightbedeficiencies,significantdeficiencies,ormaterialweaknesses.Ifmaterialweaknessesininternalcontrolovercompliancehave
DESE Single Audit Report Checklist CoDist # For use with Single Audit reports
Yes No N/A
3
beenidentified,thisstatementisrevisedtoindicatethattheauditor’sconsiderationofinternalcontrolovercompliancewasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliancethatmightbesignificantdeficienciesormaterialweaknesses,andtherefore,therecanbenoassurancethatalldeficiencies,significantdeficiencies,ormaterialweaknessesininternalcontrolovercompliancehavebeenidentified.
p. Thedefinitionsofdeficiencyininternalcontrolovercomplianceandmaterialweaknessesininternalcontrolovercompliance.Ifapplicable,astatementthatdeficienciesininternalcontrolovercompliancewereidentifiedthatareconsideredtobematerialweaknessesandadescriptionofthematerialweaknessesininternalcontrolovercomplianceorareferencetotheaccompanyingscheduleoffindingsandquestionedcosts,includingthereferencenumber(s)ofthefinding(s).
q. Ifsignificantdeficienciesininternalcontrolovercompliancewereidentified,thedefinitionofsignificantdeficiencyininternalcontrolovercompliance,astatementthatdeficienciesininternalcontrolovercompliancewereidentifiedthatareconsideredtobesignificantdeficiencies,andadescriptionofthesignificantdeficienciesininternalcontrolovercomplianceorareferencetotheaccompanyingscheduleoffindingsandquestionedcosts,includingthereferencenumber(s)ofthefinding(s)
r. Ifnomaterialweaknessesininternalcontrolovercompliancewereidentified,astatementtheauditordidnotidentifyanydeficienciesininternalcontrolovercompliancethatareconsideredtobematerialweaknesses
s. Ifnosignificantdeficienciesareidentified,astatementthattheauditor’sconsiderationoftheinternalcontrolovercompliancewouldnotnecessarilydiscloseallmattersininternalcontrolthatmightbesignificantdeficienciesormaterialweaknesses;ifsignificantdeficienciesareidentified,astatementthattheauditor’sconsiderationoftheinternalcontrolovercompliancewouldnotnecessarilydiscloseallmattersintheinternalcontrolthatmightbesignificant
DESE Single Audit Report Checklist CoDist # For use with Single Audit reports
Yes No N/A
4
deficienciesormaterialweaknesses,andastatementthatcertaindeficiencieswereidentifiedthatareconsideredtobesignificantdeficiencies,andifapplicable,materialweaknesses
t. Iftheauditorincludestheauditee’sresponsestothefindingsandquestionedcostsinthereport,astatementthattheauditordidnotaudittheauditee’sresponses,andaccordinglyexpressesnoopiniononit
u. Aseparateparagraphattheendofthereportstatingthatthereportisintendedsolelyfortheinformationanduseofthosechargedwithgovernance,otherswithintheentity,federalawardingagencies,and(ifapplicable)pass‐throughentitiesandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties
v. Themanualorprintedsignatureoftheauditor’sfirm
w. Thecityandstatewheretheauditorpractices
x. Thedateoftheauditor’sreport
Note:Theauditor’sreportoncomplianceandinternalcontrolovercomplianceshouldgenerallybedatedthesamedateasthatoftheotherauditreports,butmaycarryalaterdatewhenA‐133complianceauditworkisperformedsubsequenttotheworkonthefinancialstatements.WhentheSEFAisreportedonintheauditor’sreportinthereportoncomplianceandinternalcontrolovercompliance,thereportingontheSEFAshouldbedatedthesamedateasthereportonthefinancialstatementsandthereforetheauditorcandualdatethereportasappropriate.[AAG‐SLV13.31]
2. Iftherearefindingsreportedinthefederalawardssectionofthescheduleoffindingsandquestionedcosts,hastheauditorconsideredtheneedtomodifythereport(qualified,adverse,ordisclaimer)oncomplianceandoninternalcontrolovercompliance?[AAG‐SLA13.43]
WithRegardtotheScheduleofExpendituresofFederalAwards:
3. Includes:
a. Federalprogrambyfederalagency,includingindividualprogramwithinacluster,andeitherindividualawardsorawardsbysubdivisionfor
DESE Single Audit Report Checklist CoDist # For use with Single Audit reports
Yes No N/A
5
researchanddevelopmentawards b. Totalfederalawardsexpendedforeachindividual
federalprogramandCatalogofFederalDomesticAssistance(CFDA)numberorotheridentifyingnumberwhentheCFDAnumberisnotavailable.
c. Ifapplicable,pass‐throughentitynameandidentifyingnumberassignedbythepass‐throughentity
d. Notesdescribingsignificantaccountingpoliciesinpreparingtheschedule
e. Ifapplicableandtotheextentpractical,amountsprovidedtosubrecipientsforeachfederalprogram
f. Valueofanyfederalawardsexpendedintheformofnoncashassistance
WithRegardtoDeterminationofMajorProgram:
4. DidtheTypeAprograms,thefederalprograms(orappropriatelyclusteredprograms)withexpendituresoffederalawardsduringtheauditperiodexceedingthelargerof:[A‐133.520(b);AAG‐SLA9.05]
$300,000or3percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedweremorethanorequalto$300,000andlessthanorequalto$100million);$3millionor0.3percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedweremorethan$100millionandlessthanorequalto$10billion);or$30millionor0.15percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedexceeded$10billion),
thatwerenotidentifiedasmajorprogramsmeetallofthefollowingconditions:[A‐133.520(c)(l);AAG‐SLA8l12‐.14]
a. Perreviewofthetwopriorauditreports,auditedasamajorprograminatleastoneofthetwomostrecentauditperiods[AAG‐SLA8.12](ThefactthataTypeAprogramwasnotTypeAintheprevioustwoyearsisnotrelevant.IftheTypeAprogramwasnotaudited
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Yes No N/A
6
inthetwomostrecentauditperiods,withoutregardtobeingTypeAorBduringthoseperiodsorisanewprogram,itcannotbeconsideredlowriskand,therefore,mustbeauditedinthecurrentperiod.AuditorjudgmentcannotoverridetherequirementthatmajorprogramsshouldincludeeveryTypeAprogramthat(a)wasnotauditedinoneofthetwoprioryearsor(b)hadauditfindingsindicatedinA‐133.510(a)(1),(2)and(5).)
b. Perreviewofthetwopriorauditreports,freeofauditfindingsunderA‐133‐510(a)inthelastauditperiod.
(Auditfindingsunder§.510(a)–(1)Reportableconditionsininternalcontrolovermajorprograms.(2)Materialnoncompliancewiththeprovisionsoflaws,regulations,contracts,orgrantagreementsrelatedtoamajorprogram.(3)Knownquestionedcostswhicharegreaterthan$10,000foratypeofcompliancerequirementforamajorprogram.(4)Knownquestionedcostswhicharegreaterthan$10,000foraFederalprogramwhichisnotauditedasamajorprogram.(5)Thecircumstancesconcerningwhytheauditor’sreportoncomplianceformajorprogramsisotherthananunmodifiedopinion,unlesssuchcircumstancesareotherwisereportedasauditfindingsinthescheduleoffindingsandquestionedcostsforFederalawards.(6)KnownfraudaffectingaFederalaward,unlesssuchfraudisotherwisereportedasanauditfindinginthescheduleoffindingsandquestionedcostsforFederalawards.(7)Instanceswheretheresultsofauditfollow‐upproceduresdisclosedthatthesummaryscheduleofpriorauditfindingspreparedbytheauditeeinaccordancewith§.315(b)materiallymisrepresentsthestatusofanypriorauditfindings.)
c. Notrequestedbyfederalagencytobeexcludedfromconsiderationasalow‐riskprogram
5. Iftheentitywasconsideredalow‐riskauditee,werethefollowingconditionsmetforeachoftheprecedingtwoyears:[A‐133.530;AAG‐SLA8.26]
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a. Annualsingleauditswereperformedontheentitybeingauditedor,ifabiennialaudit,priorapprovalwasobtainedfromthecognizantoroversightagency.Inorderforanauditeetomeetthecriteriaofalow‐riskauditeeinthecurrentyear,thepriortwoyears’auditsmusthavemettherequirementsofCircularA‐133,includingreportsubmissiontotheFederalAuditClearinghouse.
Note:Anentitydoesnotmeetthecriteriaforalowriskauditeeifitwasincludedinthesingleauditofadifferententityforeitherofthepriortwoyears’audits.
b. Theauditor’sopiniononthefinancialstatementsandtheScheduleofExpendituresofFederalAwardswereunmodifiedoranyqualificationwaswaivedbythecognizantoroversightagency.
Note:Forauditsofstateandlocalgovernments,theauditor’sopiniononeachopinionunitmustbeunmodified.
c. Therewerenodeficienciesininternalcontrol,whichwereidentifiedasmaterialweaknessesundertherequirementsofGovernmentAuditingStandardsunlessawaiverwasobtainedfromthecognizantoroversightagency.
d. Noneofthefederalprogramshadauditfindingsfromanyofthefollowingineitheroftheprecedingtwoyears(or,inthecaseofbiennialaudits,precedingtwoauditperiods)inwhichtheywereclassifiedatTypeAprograms:
Materialweaknessesininternalcontrol
overcompliance. Noncompliancewiththeprovisionsof
laws,regulations,contracts,orgrantagreements,whichhaveamaterialeffectonaTypeAprogram.
KnownorlikelyquestionedcoststhatexceedfivepercentofthetotalfederalawardsexpendedforaTypeAprogramduringtheyear.
WithRegardtotheScheduleofFindingsandQuestionedCosts:
6. DoestheScheduleofFindingsandQuestionedCosts
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Yes No N/A
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(SFQC)include:[AAG‐SLA13.38]
a. Asummaryoftheauditor’sresults?
b. FindingsrelatedtothefinancialstatementsthatarerequiredtobereportinginaccordancewithGAS?
c. Findingsandquestionedcostsforfederalawards?
7. Doesthesummaryofauditor’sresultssectionoftheSFQCcontainalloftherequiredinformationasfollows:[AAG‐SLA13.39]
a. Thetypeofreporttheauditorissuedonthefinancialstatementsoftheauditee(thatis,unmodified,qualified,adverse,ordisclaimer)
b. Whereapplicable,astatementthatsignificantdeficienciesormaterialweaknesses,orboth,ininternalcontrolweredisclosedbytheauditoffinancialstatements
c. Astatementonwhethertheauditdisclosedanynoncompliancethatismaterialtothefinancialstatements
d. Whereapplicable,astatementthatsignificantdeficienciesandmaterialweaknessesininternalcontrolovermajorprogramsweredisclosedbytheaudit
e. Thetypeofreporttheauditorissuedoncomplianceformajorprograms(thatis,unmodified,qualified,adverse,ordisclaimer)
f. AstatementonwhethertheauditdisclosedanyauditfindingsthattheauditorisrequiredtoreportunderCircularA‐133
g. Anidentificationofmajorprograms
h. ThedollarthresholdusedtodistinguishbetweenTypeAandTypeBprograms
i. Astatementastowhethertheauditeequalifiedasalow‐riskauditee[AAG‐SLA13.39a]
8. DoestheSFQCincludeasectiondisclosingfindingsrelatingtothefinancialstatementauditthatarerequiredtobereportedbyGovernmentAuditingStandardsincludingthefollowing:[A‐133.505(d)(2);AAG‐SLA12.44‐.34]
a. Significantdeficienciesininternalcontroloverfinancialreporting;
b. Allinstancesoffraudandillegalactsunlessclearlyinconsequential,exceptforfraudandillegalacts
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Yes No N/A
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involvingfederalawardsthataresubjecttoA‐133reporting,andthatarenotmaterialtothefinancialstatements;
c. Materialviolationsofprovisionsofcontractsandgrantagreements;and
d. Materialabuse
9. DoestheSFQCincludeasectiondisclosingfindingsandquestionedcostsrelatingtothecomplianceauditofmajorprogramsthatarerequiredtobereportedbyA‐133includingthefollowing:[A‐133.505(d)(3);AAG‐SLA12.35‐.38]
a. SignificantdeficienciesandmaterialweaknessesininternalcontrolovermajorprogramsinrelationtoatypeofcompliancerequirementforamajorprogramoranauditobjectiveidentifiedintheOMBComplianceSupplement;
b. Knownquestionedcoststhataregreaterthan$10,000andknownquestionedcostswhenlikelyquestionedcostsaregreaterthan$10,000foratypeofcompliancerequirementforamajorprogram,includinginformationtoprovideproperperspectiveforjudgingtheprevalenceandconsequencesofthequestionedcosts;
c. Knownquestionedcoststhataregreaterthan$10,000forprogramsthatarenotauditedasmajorprogramsforwhichtheauditorbecomesaware;
d. Ifapplicable,thecircumstancesconcerningwhytheauditor’sreportoncomplianceformajorprogramsisotherthananunmodifiedopinion,unlesssuchcircumstancesareotherwisereportedasauditfindingsintheSFQC;
e. Knowfraudaffectingafederalaward,ifnototherwisereportedasanauditfinding?(AnauditfindingisnotrequiredifthefraudwasreportedoutsidetheentityasrequiredbyGAS)[A‐133sec.510(a);AAG‐SLA13.42]
f. Instancesofmaterialrepresentationbytheauditeeofthestatusofanypriorauditfindings?[A‐133sec510(a);AAG‐SLA13.42and.50]
g. Abuseinvolvingfederalawardsthatismaterialtoamajorprogram?[AAG‐SLA13.43]
WithRegardtoAuditFindings:
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10. Doestheauditfindingdetailinclude:
a. Areferencenumber?
b. FederalprogramandspecificfederalawardidentificationincludingtheCFDAtitleandnumber,federalawardnumberandyear,nameofthefederalagency,andifapplicablethenameofthepass‐throughentity[A‐133.510(b)(1);AAG‐SLA13.44a]
c. Theappropriateelements,includingcriteria(includingastatutory,regulatory,orothercitation),condition,questionedcosts,perspective,cause,possibleassertedeffect,recommendations,andviewsofresponsibleofficialstotheextentpractical[A‐133.510(b);AAG‐SLA13.44]
11. Dothefindingsreporttheviewsofresponsible,officialsconcerningthefindings,conclusions,andrecommendations,aswellasplannedcorrectiveactionsasrequiredbyGAS,orrefertothecorrectiveactionplan,dependingonthestatusofthedevelopmentofthecorrectiveactionplanatthetimetheauditor’sreportsarereleased?[AAG‐SLA13.41and.49]
a. Iftheauditee’scommentsopposethereport’sfindings,conclusions,orrecommendations,andarenotintheauditor’sopinion,valid‐oriftheplannedcorrectiveactionsdonoadequatelyaddresstheauditor’srecommendations‐doethefederalawardssectionofthescheduleoffindingsandquestionedcostsstatetheauditor’sreasonsfordisagreeingwiththecommentsorplannedcorrectiveaction?
FederalAuditClearinghouse:
12. Hastheauditeesubmittedtheauditreporttotheclearinghouse?
DESE Single Audit Report Checklist CoDist # For use with Single Audit reports DRAFT
Yes No N/A
1
OMNIComplianceReport:
1. Doesthereportoncompliancewithrequirementsapplicabletoeachmajorprogramandinternalcontrolovercompliancecontaintherequiredelements,asfollows:
b. Atitlethatincludesthewordindependent
c. Identificationoftheperiodcoveredbythereport
d. Anopinion(ordisclaimerofopinion)astowhetherthefinancialstatementsarepresentedfairlyinallmaterialrespectsinaccordancewithgenerallyacceptedaccountingprinciplesandanopinion(ordisclaimerofopinion)astowhetherthescheduleofexpendituresofFederalawardsisfairlystatedinallmaterialrespectsinrelationtothefinancialstatementsasawhole.(§200.515(a))
e. AreportoninternalcontroloverfinancialreportingandcompliancewithFederalstatutes,regulations,andthetermsandconditionsoftheFederalaward,noncompliancewithwhichcouldhaveamaterialeffectonthefinancialstatements.Thisreportmustdescribethescopeoftestingofinternalcontrolandcomplianceandtheresultsofthetests,and,whereapplicable,itwillrefertotheseparatescheduleoffindingsandquestionedcosts.(§200.515(b))
f. InadditiontotherequirementsofGAGAS,theauditormustdeterminewhethertheauditeehascompliedwithFederalstatutes,regulations,andthetermsandconditionsofFederalawardsthatmayhaveadirectandmaterialeffectoneachofitsmajorprograms.(§200.514(d)(1))
g. Astatementthatanauditincludesexamining,onatestbasis,evidenceabouttheauditee’scompliancewiththoserequirementsandperformingsuchotherproceduresastheauditorconsiderednecessaryinthecircumstances
h. Astatementthattheauditorbelievesthattheauditprovidesareasonablebasisfortheauditor’sopinion
i. Astatementthattheauditdoesnotprovidealegaldeterminationoftheauditee’scompliancewiththoserequirements
j. Ifinstancesofnoncompliancearenotedthatresultinanopinionmodification,areferencetoadescription
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Yes No N/A
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intheaccompanyingscheduleoffindingsandquestionedcosts,including
thereferencenumber(s)ofthefinding(s); anidentificationofthetypes(s)of
compliancerequirementsandrelatedmajorprogram(s);and
astatementthatcompliancewithsuchrequirementsisnecessary,intheauditor’sopinion,fortheauditeetocomplywiththerequirementsapplicabletotheprogram(s)
k. Anopiniononwhethertheauditeecomplied,inallmaterialrespects,withthetypesofcompliancerequirementsthatareapplicabletoeachofitsmajorfederalprogramsfortheyearended
l. Ifapplicable,astatementthattheresultsoftheauditingproceduresdisclosedinstancesofnoncompliancethataretobereportedinaccordancewith§200.516Auditfindings,andareferencetothescheduleoffindingsandquestionedcostsinwhichtheyaredescribed
ReportonInternalControlOverCompliance:
m. Astatementthattheauditee’smanagementisresponsibleforestablishingandmaintainingeffectiveinternalcontrolovercompliancewiththerequirementsoflaws,regulations,contracts,andgrantsapplicabletofederalprograms
n. Astatementthatinplanningandperformingtheaudit,theauditorconsideredtheauditee’sinternalcontrolovercompliancewiththetypesofrequirementsthatcouldhaveadirectandmaterialeffectonamajorfederalprogram,todeterminetheauditingproceduresforthepurposeofexpressinganopiniononcompliancebutnotforthepurposeofexpressinganopinionontheeffectivenessofinternalcontrolovercompliance
o. Astatementthattheauditor’sconsiderationofinternalcontrolovercompliancewasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliancethatmightbedeficiencies,significantdeficiencies,ormaterialweaknesses.Ifmaterialweaknessesininternalcontrolovercompliancehavebeenidentified,thisstatementisrevisedtoindicatethattheauditor’sconsiderationofinternalcontrol
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Yes No N/A
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overcompliancewasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliancethatmightbesignificantdeficienciesormaterialweaknesses,andtherefore,therecanbenoassurancethatalldeficiencies,significantdeficiencies,ormaterialweaknessesininternalcontrolovercompliancehavebeenidentified.
p. Thedefinitionsofdeficiencyininternalcontrolovercomplianceandmaterialweaknessesininternalcontrolovercompliance.Ifapplicable,astatementthatdeficienciesininternalcontrolovercompliancewereidentifiedthatareconsideredtobematerialweaknessesandadescriptionofthematerialweaknessesininternalcontrolovercomplianceorareferencetotheaccompanyingscheduleoffindingsandquestionedcosts,includingthereferencenumber(s)ofthefinding(s).
q. Ifsignificantdeficienciesininternalcontrolovercompliancewereidentified,thedefinitionofsignificantdeficiencyininternalcontrolovercompliance,astatementthatdeficienciesininternalcontrolovercompliancewereidentifiedthatareconsideredtobesignificantdeficiencies,andadescriptionofthesignificantdeficienciesininternalcontrolovercomplianceorareferencetotheaccompanyingscheduleoffindingsandquestionedcosts,includingthereferencenumber(s)ofthefinding(s)
r. Ifnomaterialweaknessesininternalcontrolovercompliancewereidentified,astatementtheauditordidnotidentifyanydeficienciesininternalcontrolovercompliancethatareconsideredtobematerialweaknesses
s. Ifnosignificantdeficienciesareidentified,astatementthattheauditor’sconsiderationoftheinternalcontrolovercompliancewouldnotnecessarilydiscloseallmattersininternalcontrolthatmightbesignificantdeficienciesormaterialweaknesses;ifsignificantdeficienciesareidentified,astatementthattheauditor’sconsiderationoftheinternalcontrolovercompliancewouldnotnecessarilydiscloseallmattersintheinternalcontrolthatmightbesignificantdeficienciesormaterialweaknesses,andastatementthatcertaindeficiencieswereidentifiedthatare
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consideredtobesignificantdeficiencies,andifapplicable,materialweaknesses
t. Iftheauditorincludestheauditee’sresponsestothefindingsandquestionedcostsinthereport,astatementthattheauditordidnotaudittheauditee’sresponses,andaccordinglyexpressesnoopiniononit
u. Aseparateparagraphattheendofthereportstatingthatthereportisintendedsolelyfortheinformationanduseofthosechargedwithgovernance,otherswithintheentity,federalawardingagencies,and(ifapplicable)pass‐throughentitiesandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties
v. Themanualorprintedsignatureoftheauditor’sfirm
w. Thecityandstatewheretheauditorpractices
x. Thedateoftheauditor’sreport
Note:Theauditor’sreportoncomplianceandinternalcontrolovercomplianceshouldgenerallybedatedthesamedateasthatoftheotherauditreports,butmaycarryalaterdatewhenA‐133complianceauditworkisperformedsubsequenttotheworkonthefinancialstatements.WhentheSEFAisreportedonintheauditor’sreportinthereportoncomplianceandinternalcontrolovercompliance,thereportingontheSEFAshouldbedatedthesamedateasthereportonthefinancialstatementsandthereforetheauditorcandualdatethereportasappropriate.[AAG‐SLV13.31]
2. Iftherearefindingsreportedinthefederalawardssectionofthescheduleoffindingsandquestionedcosts,hastheauditorconsideredtheneedtomodifythereport(qualified,adverse,ordisclaimer)oncomplianceandoninternalcontrolovercompliance?[AAG‐SLA13.43]
WithRegardtotheScheduleofExpendituresofFederalAwards:
3. Includes:
a. Federalprogrambyfederalagency,includingindividualprogramwithinacluster,andeitherindividualawardsorawardsbysubdivisionforresearchanddevelopmentawards
b. Totalfederalawardsexpendedforeachindividual
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federalprogramandCatalogofFederalDomesticAssistance(CFDA)numberorotheridentifyingnumberwhentheCFDAnumberisnotavailable.
c. Ifapplicable,pass‐throughentitynameandidentifyingnumberassignedbythepass‐throughentity
d. Notesdescribingsignificantaccountingpoliciesinpreparingtheschedule
e. Ifapplicableandtotheextentpractical,amountsprovidedtosubrecipientsforeachfederalprogram
f. Valueofanyfederalawardsexpendedintheformofnoncashassistance
WithRegardtoDeterminationofMajorProgram:
4. DidtheTypeAprograms,thefederalprograms(orappropriatelyclusteredprograms)withexpendituresoffederalawardsduringtheauditperiodexceedingthelargerof:§200.518
$300,000or3percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedweremorethanorequalto$300,000andlessthanorequalto$100million);$3millionor0.3percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedweremorethan$100millionandlessthanorequalto$10billion);or$30millionor0.15percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedexceeded$10billion),
thatwerenotidentifiedasmajorprogramsmeetallofthefollowingconditions:
a. TheauditormustidentifyTypeAprogramswhicharelow‐risk.Inmakingthisdetermination,theauditormustconsiderwhethertheOversightexercisedbyFederalagenciesandpass‐throughentities,theresultsofauditfollow‐up,oranychangesinpersonnelorsystemsaffectingtheprogramindicatesignificantlyincreasedriskandprecludetheprogramfrombeinglowrisk.ForaTypeAprogramtobeconsideredlow‐
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risk,itmusthavebeenauditedasamajorprograminatleastoneofthetwomostrecentauditand,inthemostrecentauditperiod,theprogrammusthavenothad:(i)Internalcontroldeficiencieswhichwereidentifiedasmaterialweaknesses(ii)Amodifiedopinionontheprogramintheauditor’sreportonmajorprograms(iii)KnownorlikelyquestionedcoststhatexceedfivepercentofthetotalFederalawardsexpendedfortheprogram.(reviewlasttwoauditsreceived)(§200.518(c)(1))
c. Federalagenciesandpass‐throughentitiesmayprovideauditorsguidanceabouttheriskofaparticularFederalprogramandtheauditormustconsiderthisguidanceindeterminingmajorprogramsinauditsnotyetcompleted.(Notrequestedbyfederalorpass‐throughagencytobeexcludedfromconsiderationasalow‐riskprogram)(§200.518(h))
5. Iftheentitywasconsideredalow‐riskauditee,werethefollowingconditionsmetforeachoftheprecedingtwoyears:[A‐133.530;AAG‐SLA8.26]
a. SingleauditswereperformedonanannualbasisinaccordancewiththeprovisionsofthisSubpart,includingsubmittingthedatacollectionformandthereportingpackagetotheFACwithinthetimeframespecifiedearlierof30calendarsafterreceiptoftheauditor’sreportorninemonthsaftertheendoftheauditperiod.(§200.520(a))
Note:Anon‐Federalentitythathasbiennialauditsdoesnotqualifyasalow‐riskauditee.
b. Theauditor’sopiniononwhetherthefinancialstatementswerepreparedinaccordancewithGAAP,orabasisofaccountingrequiredbystatelaw,andtheauditor’sinrelationtoopiniononthescheduleofexpendituresofFederalawardswereunmodified.(§200.520(b))
Note:Forauditsofstateandlocalgovernments,theauditor’sopiniononeachopinionunitmustbeunmodified.
c. Therewerenodeficienciesininternalcontrol,whichwereidentifiedasmaterialweaknessesundertherequirementsofGeneralAcceptedGovernment
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Yes No N/A
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AuditingStandardsunlessawaiverwasobtainedfromthecognizantoroversightagency.(§200.520(c))
d. Theauditordidnotreportasubstantialdoubtabouttheauditee’sabilitytocontinueasagoingconcern.(§200.520(d))
e. Noneofthefederalprogramshadauditfindingsfromanyofthefollowingineitheroftheprecedingtwoyears(or,inthecaseofbiennialaudits,precedingtwoauditperiods)inwhichtheywereclassifiedatTypeAprograms:
(1)Internalcontroldeficienciesthatwereidentifiedasmaterialweaknessesintheauditor’sreportoninternalcontrolformajorprograms(2)Amodifiedopiniononamajorprogramintheauditor’sreportonmajorprograms(3)KnownorlikelyquestionedcoststhatexceededfivepercentofthetotalFederalawardsexpendedforaTypeAprogramduringtheauditperiod(§200.520(e))
WithRegardtotheScheduleofFindingsandQuestionedCosts:
6. DoestheScheduleofFindingsandQuestionedCosts(SFQC)include:(§200.515(d))
a. Asummaryoftheauditor’sresults?
b. FindingsrelatedtothefinancialstatementswhicharerequiredtobereportedinaccordancewithGAGAS?
c. FindingsandquestionedcostsforFederalawards?
7. Doesthesummaryofauditor’sresultssectionoftheSFQCcontainalloftherequiredinformationasfollows:(§200.515(d)(1))
a. Thetypeofreporttheauditorissuedonthefinancialstatementsoftheauditee(unmodified,qualified,adverse,ordisclaimer)
b. Whereapplicable,astatementthatsignificantdeficienciesormaterialweaknesses,orboth,ininternalcontrolweredisclosedbytheauditoffinancialstatements
c. Astatementonwhethertheauditdisclosedanynoncompliancethatismaterialtothefinancialstatements
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Yes No N/A
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d. Whereapplicable,astatementthatsignificantdeficienciesandmaterialweaknessesininternalcontrolovermajorprogramsweredisclosedbytheaudit
e. Thetypeofreporttheauditorissuedoncomplianceformajorprograms(unmodified,qualified,adverse,ordisclaimer)
f. Astatementonwhethertheauditdisclosedanyauditfindingsthattheauditorisrequiredtoreportunder§200.516AuditFindings
g. Anidentificationofmajorprograms
h. ThedollarthresholdusedtodistinguishbetweenTypeAandTypeBprograms
i. Astatementastowhethertheauditeequalifiedasalow‐riskauditeeunder§200.520Criteriaforalowriskauditee.
8. TheSFQCincludeasectiondisclosingfindingsrelatingtothefinancialstatementauditthatarerequiredtobereportedbyGAGAS.(§200.515(d)(2))
9. TheSFQCincludeasectiondisclosingfindingsandquestionedcostsforFederalawardswhichmuchincludeauditfindingsasdefinedin§200.516(a)AuditFindings.(§200.515(d)(3))
a. Auditfindings(e.g.,internalcontrolfindings,compliancefindings,questionedcosts,orfraud)thatrelatetothesameissueshouldbepresentedasasingleauditfinding.Wherepractical,auditfindingsshouldbeorganizedbyFederalagencyorpass‐throughentity.
b. AuditfindingsthatrelatetoboththefinancialstatementsandFederalawards,asreportedunderparagraphs(d)(2)and(d)(3)ofthissection,respectively,shouldbereportedinbothsectionsoftheschedule.However,thereportinginonesectionoftheschedulemaybeinsummaryformwithareferencetoadetailedreportingintheothersectionoftheschedule.
WithRegardtoAuditFindings:
10. Doestheauditfindingdetailinclude:(§200.516)
a. Areferencenumber?
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b. FederalprogramandspecificFederalawardidentificationincludingtheCFDAtitleandnumber,Federalawardidentificationnumberandyear,nameofFederalagency,andnameoftheapplicablepass‐throughentity.
c. Theappropriateelements,includingcriteria(includingastatutory,regulatory,orothercitation),condition,questionedcosts,cause,possibleassertedeffect,perspective,recommendations,repeatfinding,andviewsofresponsibleofficialstotheextentpractical
FederalAuditClearinghouse:
12. Hastheauditeesubmittedtheauditreporttotheclearinghousewithintherequiredtimeframeearlierof30calendarsafterreceiptoftheauditor’sreportorninemonthsaftertheendoftheauditperiod?(§200.512)
1
Charter School Audit Checklist-FY14 Using NFP Financial Statement Presentation With Regard to the Auditor’s Report: Yes No N/A 1. Does the report appropriately include the basic
elements required under professional standards and is appropriate language used for modifying the report in the circumstances described in such standards? Consider the following: [AU 508.08–.1 and 623]
a. A title that includes the word independent [AU 508.08a]
b. The report covers all periods for which financial statements are presented [AU 508.08 and .65]
c. A reference to the country of origin of the accounting principles used to prepare the financial statements [AU 508.08h]
d. A reference to the country of origin of the auditing standards the auditor followed in performing the audit [AU 508.08d]
e. A consistency explanatory paragraph to the auditor’s report for a change in reporting entity not resulting from a transaction or event [AU 420.08]
2. If the audit organization reports these internal control and compliance matters in a separate report from the report on the financial statements, did the audit organization include:
a. a reference to the separate reports in the report on the financial statements? [GAS par. 5.08]
b. a statement that the reports on internal control and compliance are an integral part of a GAGAS audit and important in assessing the results of the audit? [GAS par. 5.09]
3. Has the auditor reported on the Schedule of Expenditures of Federal Awards by including the following: [AAG-SLA 12.12–.15]
a. An identification of the SEFA as accompanying supplementary information by descriptive title or by page number reference in the document
b. A statement that the audit was conducted for
2
the purpose of forming an opinion on the basic financial statements and that the SEFA required by Circular A-133 is presented for the purposes of additional analysis and is not a required part of the basic financial statements
c. An opinion on whether the SEFA is fairly stated, in all material respects, in relation to the financial statements taken as a whole.
With Regard to Financial Statements and Notes: General 4. Is the accounting appropriate and are the basic
financial statement disclosures adequate? Consider the following:
a. The financial statements are suitably titled. [AU 623.02, .05, .07, .24]
b. Has the Internal Revenue codes section under which the organization is exempt been disclosed? [Generally accepted]
c. The disclosures are adequate concerning significant accounting policies, including a description of the nature of each fund, if applicable (for instance, general, plant, endowment, unrestricted, temporarily restricted, and permanently restricted). [Paragraphs 3–6 of FASB ASC 235-10-50; for OCBOA, AU 623.09–.10 and 9623.90–.95]
d. Disclosures for accounting changes are made. [FASB ASC 250, Accounting Changes and Error Corrections]
e. The basic financial statements should focus on the entity as a whole and consist of a statement of financial position (or balance sheet), statement of activities (or statement of revenues and expense) in which the amount of the change in net assets articulates to the statement of financial position, and a statement of cash flows, and accompanying notes. [FASB ASC 958-205; FASB ASC 958-210, FASB ASC 958-225; FASB ASC 958-230]
f. Net assets and changes in net assets should be classified as permanently restricted, (b) temporarily restricted, and/or (c) unrestricted, based on donor imposed restrictions or relevant law, or both. [FASB ASC 958-225; FASB ASC glossary term donor imposed restrictions]
g. Information is provided about the nature and amounts of different types of permanent
3
restrictions and temporary restrictions. [FASB ASC 958-210-45-9]
h. Required disclosures about risks and uncertainties are made regarding the nature of operations, the use of estimates, certain significant estimates, and current vulnerabilities due to certain concentrations. [FASB ASC 275-10-50]
i. Adjustments of financial statements related to prior periods were made. [FASB ASC 250-10; Paragraphs 12–18 of FASB ASC 270-10-45]
j. The potential impact of new accounting pronouncements (issued but not yet effective) on the entity and disclosures relating to same was stated, if applicable. [AU 9410.13–.18]
5. Is a description of the organization’s activities, including each major class of programs, disclosed?[FASB ASC 958-205-50-1; FASB ASC 958-720-45-5; FASB ASC 958-720-50-1]
6. Is the accounting and reporting adequate concerning employee benefit, postemployment, and postretirement benefit plans and obligations? [FASB ASC 958-715] Consider the following:
a. Defined benefit pension plans [FASB ASC 715-20; FASB ASC 715-30; FASB ASC 715-80]
b. Defined contribution pension plans [FASB ASC 715-70]
c. Other pension, profit sharing, or other employee benefit plans [FASB ASC 718, Compensation—Stock Compensation]
d. Postemployment benefits (after employment but before retirement) [FASB ASC 712, Compensation—Nonretirement Postemployment Benefits]
General: 7. Does the statement of financial position report
total assets, liabilities, and net assets as well as separate amounts for each of the three classes of net assets with captions used to describe their meaning as explained in FASB ASC 958-210? [AAG-NPO 3.03, 3.05, 11.03, 11.14] A117
8. Are amounts in the Statement of Financial Position properly presented? Consider the following:
a. The reporting of the amounts of the entity’s
4
total assets, liabilities, and net assets is presented. [Paragraphs 1–3 of FASB ASC 958-210-45]
b. Cash and other assets received with a long-term donor imposed restrictions are classified separately from those assets that are unrestricted and available for current use. [Paragraphs 5-6 of FASB ASC 958-210-45]
c. The statement provides information about liquidity by one or more of the following: (a) sequencing assets according to their nearness to cash and liabilities according to their nearness to maturity, (b) classifying assets and liabilities as current and noncurrent [FASB ASC 210-10], or (c) footnote disclosure about the liquidity or maturity of assets and liabilities, including restrictions on the use of particular assets. [FASB ASC 958-210-50-1]
Cash and Investments: 9. Is the accounting appropriate and are the
disclosures adequate for cash and investments? Consider the following:
a. Restricted cash including compensating balances [subpoint a of FASB ASC 210-10-45-4; FASB ASC 958-210-45-7]
b. Cash or other assets with a donor-imposed restriction for a long-term purpose [FASB ASC 958-210-45-6; FASB ASC 958-210-50]
c. Bank overdrafts reclassified to and presented separately in current liabilities [Generally Accepted]
d. Held checks (for instance, those written before but not released until after the balance sheet date) reclassified to accounts payable [Generally Accepted]
e. Investments, including derivative instruments and hedging activities [FASB ASC 958-320; FASB ASC 958-325; FASB ASC 815, Derivatives and Hedging; FASB ASC 320, Investments—Debt and Equity Securities; FASB ASC 323, Investments—Equity Method and Joint Ventures; FASB ASC 325, Investments—Other]
10. Are the disclosures adequate concerning transfers of assets to a recipient, where the entity specifies itself or its affiliate as the beneficiary? [FASB ASC 958-20-50-1; FASB ASC 958-605-50-6] Consider the following:
5
a. The identity of the recipient organization to which the transfer was made
b. The terms under which the amounts will be distributed to the resource provider or its affiliate
c. The aggregate amount recognized in the statement of financial position for these transfers and whether that amount is recorded as an interest in the net assets of the recipient organization
Fixed Assets and Other Noncurrent Assets: 11. Is the accounting appropriate and are
disclosures adequate concerning fixed assets? Consider the following:
a. Purchased fixed assets [Paragraphs 1–4 of FASB ASC 958-360-50]
b. Donated fixed assets [FASB ASC 958-360-30-1; Paragraphs 1–4 of FASB ASC 958-360-50]
c. Capitalization policy [Paragraphs 1–2 of FASB ASC 958-360-50]
d. Accounting for depreciation, including disclosures of depreciation policy for inexhaustible assets [Paragraphs 1–7 of FASB ASC 958-360-35-7; Paragraphs 1–2 of FASB ASC 958-360-45; Paragraphs 1–2 of FASB ASC 958-360-50]
e. Major classes of depreciable assets f. Accumulated depreciation, as well as a general
description of the method used in computing depreciation
g. Capitalized interest [FASB ASC 958-835-20] h. Restrictions on use or disposal imposed by
donor [Paragraphs 1–4 of FASB ASC 958-360-50]
i. Sales-type, direct financing, leveraged, and operating leases of lessors [FASB ASC 840, Leases]
Notes Payable and Other Debt: 12. Is the accounting appropriate and are
disclosures adequate concerning notes payable and other debt? Consider the following:
a. Maturities and rates b. Obligations under capital leases [FASB ASC
840-30]
c. Liabilities associated with exit or disposal of long-lived assets[Paragraphs15–49 of FASB
6
ASC 360-10-35] d. Other liabilities and deferred credits, including
environmental remediation liabilities, employees’ compensation for future absences, special termination benefits to employees, and deferred revenue and support [Paragraphs 1–3 of FASB ASC 710-10-25-1; FASB ASC 710-10-50-1; Paragraphs 6–8 of FASB ASC 710-10-25; FASB ASC 410-30; FASB ASC 712-10; FASB ASC 430-10]
Statement of Activities General: 13. Does the Statement of Activities properly report
net assets and changes in net assets? Consider the following:
a. The amount of change in net assets for the period using a descriptive term such as change in net assets or change in equity[FASBASC958‐205‐05‐7;FASBASC958‐225‐45‐2]
b. The amount of change in permanently restricted, temporarily restricted, and unrestricted net assets [FASB ASC 958-225-45-1]
c. Events (for example, expiration of donor imposed restrictions) that simultaneously increase one class of net assets and decrease another (reclassifications) presented as separate items [FASB ASC 958-225-45-3]
Revenues and Contributions: 14. Is the accounting appropriate and are
disclosures adequate concerning revenues and contributions received? Consider the following:
a. Revenues should be reported as increases in unrestricted net assets unless the use of the assets received is limited by donor imposed restrictions. [FASB ASC 958-225-45-5]
b. Contributions received should be classified as permanently restricted, temporarily restricted, and unrestricted based upon donor-imposed restrictions and/or relevant law. [Paragraphs 3–6 of FASB ASC 958-605-45; Paragraphs 1–2 of FASB ASC 958-360-50; FASB ASC 958-605-50-2]
c. Gross amounts of revenues (including those for special events that are ongoing and major activities), and investment revenues are reported either in the footnotes or on the face of
7
the financial statements. [Paragraphs 14–17 of FASB ASC 958-225-45; FASB ASC 958-720-05-4; FASB ASC 958-225-45-17]
Expenses: 15. Is the accounting appropriate and are
disclosures adequate concerning expenses (including those for special events that are ongoing and major activities)? Consider the following:
a. Expenses are reported as decreases in unrestricted net assets. [FASB ASC 958-225-45-7]
b. Gross amounts of expenses (including those for special events that are ongoing and major activities), and investment expenses, are reported either in the footnotes or on the face of the financial statements. [Paragraphs 14–17 of FASB ASC 958-225-45; FASB ASC 958-720-05-4; FASB ASC 958-320-45-4]
c. Depreciation is reported. [FASB ASC 360-10; FASB ASC 958-360]
d. Deferred compensation agreements are reported. [FASB ASC 710; FASB ASC 712, Compensation—Nonretirement Postemployment Benefits; FASB ASC 715, Compensation—Retirement Benefits; FASB ASC 958-715]
e. Operating leases and rent expense of lessees are reported. [FASB ASC 840-20-25-1; Paragraphs 1–3 of FASB ASC 840-20-50; FASB ASC 840-10-50-2]
16. Are expenses reported by their functional classification (such as major classes of program services and supporting activities) either on the face of the statement of activities or in the notes to the financial statements? [FASB ASC 958-720-45-2; FASB ASC 958-720-05-4; FASB ASC 958-205-45-6]
Other Gains and Losses: 17. Is the accounting appropriate and are the
disclosures adequate for other gains and loss items included in the Statement of Activities? Consider the following:
a. Gains and losses on investments are reported as increases or decreases in unrestricted net assets, unless their use is temporarily or permanently restricted by explicit donor
8
stipulations or by law. [FASB ASC 958-225-45-8]
b. Third-party reimbursements of costs for services provided are reported. [AAG-NPO 5.07-.19]
c. Investment income and gains and losses are reported. [Paragraphs 14–15 of FASB ASC 958-225-45; FASB ASC 958-320-50-1;Paragraphs 1–3 of FASB ASC 958-320-45]
d. Donated services, materials, and facilities are reported. [FASB ASC 958-605-25-16; FASB ASC 958-605-55-28; FASB ASC 958-605-50-1; Paragraphs 23–24 of FASB ASC 958-605-55]
e. Costs of start-up activities are reported. [FASB ASC 720-15]
f. Grants to other organizations are reported. [FASB ASC 958-205-45-6]
g. Extraordinary items are reported. [FASB ASC 225-20]
Statement of Cash Flows: 18. Is the Statement of Cash Flows properly
prepared and presented? Consider the following:
a. Cash provided or used by investing, financing and operating activities is disclosed. [FASB ASC 958-230; FASB ASC 230-10-45]
b. Amounts received with long-term donor stipulations in cash flows from financing activities are disclosed. [FASB ASC 958-230-55-3]
c. The net effect of cash flows on cash and cash equivalents during the period in a manner that reconciles beginning and ending cash and cash equivalents is disclosed; also, do the amounts of cash and cash equivalents agree with the amounts on the statement of financial position? [FASB ASC 230-10-45-24]
d. Reconciliation between changes in net assets/net equity and net cash flow from operating activities is disclosed. [FASB ASC 230-10-45-29]
e. If the indirect method of reporting net cash flows from operating activities was used, the amounts of interest and income taxes paid were disclosed. [FASB ASC 230-10-50-2]
f. Cash equivalents are limited to short-term,
9
highly liquid investments that are both readily convertible to known amounts of cash and of an original maturity of three months or fewer, and the organization’s policy for determining which items are treated as cash equivalents is disclosed. [FASB ASC glossary term cash equivalents; Paragraphs 5–6 of FASB ASC 230-10-45; FASB ASC 230-10-50-1]
g. The components of the cash flow statement are shown at “gross” and not “net” amounts. [Paragraphs 7–9 of FASB ASC 230-10-45]
h. If the organization’s tax-exempt status is in question by the IRS, the organization considered the potential loss or expense for financial reporting and disclosure. [FASB ASC 958-450-25-1]
i. If the organization incurs income tax expense, the notes to the financial statements disclose the amount of the unrelated business income tax and describe the nature of the activities that generated the unrelated business income tax. [subpoint c of FASB ASC 958-720-50-1]
With Regard to Reporting on Internal Control and on Compliance with Laws, Regulations, and Provisions of Contracts or Grant Agreements:
19. If the audit organization issued a management letter, did the reports on internal control and compliance refer to that management letter? [GAS par. 5.09; AAG-SLA 4.35–.36]
20. Did the auditor’s reports on internal control and compliance and other matters based upon an audit of financial statements performed in accordance with Government Auditing Standards include all required elements as follows? [AAG-SLA 4.25–.26]
a. A statement that the auditor has audited the financial statements of the auditee and a reference to the auditor’s report on the entity’s financial statements and, if applicable, a description of any departures from the standard report
b. A statement that the audit was conducted in accordance with GAAS and an identification of the United States as the country of origin of those standards and with the standards applicable to financial audits contained in Government Auditing Standards issued by the
10
Comptroller General of the United States Note: If the financial statements include organizational units that were not required to have a GAS audit, the auditor should consider modifying this scope statement.
c. A statement that in planning and performing the audit, the auditor considered the entity’s internal control over financial reporting in order to determine the auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide an opinion on internal control over financial reporting, and accordingly, does not express an opinion on the effectiveness of internal control over financial reporting
d. The definition of control deficiency and significant deficiency and, if applicable, a statement that deficiencies were identified that are considered to be significant deficiencies
e. A statement that the consideration of internal control would not necessarily disclose all matters in internal control over financial reporting that might be significant deficiencies or material weaknesses
f. If significant deficiencies are noted, a statement that certain deficiencies were identified that the auditor considers to be significant deficiencies
g. If applicable, a description of the significant deficiencies identified (including the views of responsible officials and their planned corrective action) or reference to a separate schedule in which the significant deficiencies, views, and planned corrective action are described.
h. The definition of a material weakness i. If no significant deficiencies are identified, a
statement that no material weaknesses were noted; or, if significant deficiencies are noted, a statement that the auditor’s consideration of internal control would not necessarily identify all deficiencies that might be significant deficiencies and a statement about whether the auditor believes any of the significant deficiencies are material weaknesses
j. A statement that as part of obtaining reasonable assurance about whether the financial statements are free of material misstatement,
11
the auditor has performed tests of the entity’s compliance with certain provisions of laws, regulations, contracts, and grant agreements (noncompliance with which could have a direct and material effect on the determination of financial statement amounts)
k. A statement that the objective of the financial statement audit is not to provide an opinion on compliance with those provisions, and, accordingly, the auditor does not express such an opinion Note: If sufficient work is performed, GAS permits, but does not require, auditors to express an opinion on compliance. If an opinion is expressed, the statement should be modified accordingly.
l. A statement that notes whether the results of tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and, if they are, describes the matters (including the views of responsible officials and their planned corrective action) or refers to the separate schedule in which the noncompliance, views, and planned corrective action are described
m. A statement that the auditor did not audit the entity’s response and expresses no opinion on it if the entity’s responses (views of responsible officials and corrective action plan) to the findings are included in the report or the separate schedule of findings
n. If applicable, a statement that other matters (that is, (1) deficiencies in internal control that are not significant deficiencies and (2) immaterial violations of provisions of contracts or grant agreements and immaterial abuse, other than those that are clearly inconsequential) were communicated to the entity in a management letter
o. A separate paragraph at the end of the report indicating the report is intended solely for the information and use of management as well as those charged with governance, any others within the entity, and, if applicable, legislative or regulatory bodies and is not intended to be and should not be used by anyone other than these specified parties
12
p. The manual or printed signature of the audit organization
q. The date of the auditor’s report Note: Because the report on internal control over financial reporting and on compliance relates to the audit of the financial statements and is based on the GAAS audit procedures performed, it should carry the same date as the auditor’s report on the financial statements.
With Regard to Reporting Views of Responsible Officials: 21. For reported findings related to internal control
deficiencies or fraud, illegal acts, violations of provisions of contracts or grant agreements, or abuse, did the audit organization obtain and report the views of responsible officials as well as planned corrective action? [GAS par. 5.32–.34; AAG-SLA 4.33–.34]
22. If the entity refuses to provide comments or is unable to do so in a timely manner, did the audit organization indicate such in their report? [GAS par. 5.38]
Note: This checklist is derived primarily from the pronouncements of the GASB and the AICPA. For detailed information concerning these requirements, the reviewer may wish to consult the authoritative literature of the above noted organizations as well as the AICPA Practice Aids, Checklists and Illustrative Financial Statements for State and Local Governments, and Auditing Governmental Financial Statements: Programs and Other Practice Aids. All “No” answers must be thoroughly explained.
1
FOOD AND NUTRITION SERVICES
Karen Wooton, Coordinator
Missouri Departmentof Elementary and Secondary Education
Agenda
CommunityEligibilityProvision(CEP)
2
SmartSnacks
ProfessionalStandards
2
Community Eligibility Provision (CEP)
AvailablenationwideJuly1,20143
Offerfreelunchesandbreakfaststoallenrolledstudentsforacycleof4years
Nocollectionoffreeandreducedpriceapplication
MealcostsinexcessofthetotalFederalreimbursementmustbecoveredbynon‐Federalsources
CEP in Missouri (2014-15)
75LocalEducationAgencies(LEAs)‐ 298buildings
4
buildings 50publicschooldistricts 21charterschools 4non‐publicschools
(64district‐wide)
3
CEP – eligibility criteria
MusthaveanIdentifiedStudentPercentage(ISP) of at least 40% as of April 1st of the school
5
(ISP)ofatleast40%asofApril1st oftheschoolyearpriortoimplementation
Identified Student Percentage 6
IdentifiedStudent % = X 100Identified
Student%=
#ofIdentifiedStudents
Total#ofenrolledstudentswithaccessto
NSLP/SBP
x100
4
Definition: Indentified Students
Studentscertifiedforfreemealswithoutanapplication
7
application
IncludesstudentsdirectlycertifiedthroughSNAP,TANF,FDPIR,andhomelessontheliaisonlist,income‐eligibleHeadStart,pre‐KEvenStart,migrant,runaways,non‐applicantsapprovedbylocalofficials,andfosterchildrencertifiedthroughmeansotherthananapplication
CEP Claiming Percentages 8
50identifiedstudentsand100enrolledstudents50% ISP=50%ISP
50%x1.6 =80%(freeclaimingpercentage) 100%‐ 80%=20%(paidclaimingpercentage)
If served 1500 meals in one monthIfserved1500mealsinonemonth1500x80%=1200freemeals1500x20%=300paidmeals
5
The Multiplier (1.6)
Intendedtoprovideanestimateofthetotalnumber of students eligible for free and reduced
9
numberofstudentseligibleforfreeandreducedmealsinaneligibleschool
USDAispermittedtochangethemultipliertoanumberbetween1.3and1.6
Schoolsmaykeepthesamemultiplierfortheentire4yearcycle
100% Free claiming
Whatistheindentifiedstudentpercentagethatl l ll l h f ?
10
resultsinclaimingallmealsatthefreerate?
62.5%
(62 5 x 1 6 = 100%)(62.5x1.6 =100%)
6
Indentified Student Determinations
Byindividualschools
11
Agroupofschools
EntireLEA
Preliminary Identified Student Data
VerificationReport
12
StudentsdirectlycertifiedthroughSNAP Alsoincludeextendedcategoricaleligibilitystudents
Studentsdirectlycertifiedthroughotherprograms TANF,FDPIR(alsoextendedcategoricaleligiblestudents) those documented as homeless migrantstudents),thosedocumentedashomeless,migrant,runaway,foster,HeadStart,Pre‐KEvanStart,ornon‐applicantapprovedbyLEA
(AsofthelastoperatingdayinOctober)
7
Notification Timeline
April15th ‐ ObtainschoollevelinformationEli ibl 40% d b
13
Eligible– 40%andabove Potentiallyeligible‐ greaterthan30%butlessthan40%
May1st – PublishlistofLEAsandschoolsonDESE FNS b i d USDA FNS b iDESE,FNSwebsiteandUSDA,FNSwebsite
Deadline
MustdecidebyJune30th (extendedtoAugust31st for the 2015 2016 SY)
14
31st forthe2015‐2016SY)
CompletetherequiredinformationonWebApplication
Intenttoparticipateformprovidedforsignature
8
Updating the Claiming Percentage
AnewISPmay beestablishedeachyear(donotneed to use unless higher than previously
15
needtouseunlesshigherthanpreviouslyestablished%)
Ifupdated,wouldneedtoproceedwiththedirectcertificationprocesstoprovideanewnumberasofApril1,2015
Benefits of Implementing CEP
Servefreelunchesandbreakfaststoallstudents
16
Reducedpaperworkforhouseholdsandschoolfoodservicebecausenohouseholdapplicationsarecollectedandprocessed
NoVerificationofapplications
Reducedchanceofovertidentificationandstigma
9
CEP Resources on Website
CEPparticipationlistf l h b l
17
Processforcompletingthewebapplication USDAmemos Samplemediarelease Samplelettertohouseholds Traditional vs CEP comparison tool Traditionalvs CEPcomparisontool CEPFederalreimbursementestimatortool CEP– dailymealcountform
Smart Snacks
USDAestablishednutritionstandardsforallfoods and beverages sold to students on the
18
foodsandbeveragessoldtostudentsontheschoolcampusduringtheschoolday.
Fromthemidnightbefore,to30minutesaftertheendoftheofficialschoolday.
EffectiveJuly1,2014
10
School Campus
All f h d h j i di i
19
Allareasofthepropertyunderthejurisdictionoftheschoolthatareaccessibletostudentsduringtheschoolday:
Includesschoolstores,snackbars,vendingmachines,alacarteincafeteria
Doesnotincludeareasexclusivelyusedbyfacultyandstaff,suchasteacher’slounges
Sale of Food
All f d ld t t d t th d i
20
AllfoodsoldtostudentsonthecampusduringtheschooldayissubjecttotheSmartSnackstandards.
Standardsdonotapplytofoodgiven tostudents
11
Foods Brought From Home
USDAdoesnotregulatefoodsbroughtfrom
21
g ghome. (Theruleonlyaffectsfoodsthataresoldontheschoolcampustostudentsduringtheschoolday.)
Does not apply to lunches brought from home. Doesnotapplytolunchesbroughtfromhome.
Doesnotapplytotreatsforbirthdaysbroughtfromhome.
Special Events
For special events such as celebrations holiday
22
Forspecialevents,suchascelebrations,holidayparties,etc.,thestandardsdonotapplyifsuchfoodisprovidedtothestudentsfreeofchargeor“contribution,”orthereisnoexchangeoftokensorticketsofanykind.
Theruleonlyappliestofoodsold tostudentsontheschoolcampusduringtheschoolday.
12
Fundraisers
Allfoodsthatmeettheregulatorystandardsmay be sold as fundraisers on the school campus
23
maybesoldasfundraisersontheschoolcampusduringtheschoolday
Thestandardsdonotapplytoitemssoldduringnon‐schoolhours,weekends,oroff‐campus
Fundraiser Exemptions for Missouri
Amaximumof5fundraisersthatdonotmeetthe regulatory standards per school building
24
theregulatorystandards,perschoolbuilding,perschoolyear,withadurationofonedayareallowed
Exemptfundraisersmaynotbesoldincompetitionwithschoolmealsinthefoodserviceareaduringthemealservice
13
Recordkeeping
FoodServicemustmaintainrecordsforallSmart Snack products sold under the nonprofit
25
SmartSnackproductssoldunderthenonprofitschoolfoodserviceaccount
SchoolDistrictsmustmaintainrecordsforallotherSmartSnackproductssold
Monitoring and Compliance
Monitoringforcomplianceispartoftheon‐siteAdministrative Review
26
AdministrativeReview
Ifviolationshaveoccurred,technicalassistanceandcorrectiveactionplanswillberequired
14
Smart Snack Resources on Website
SmartSnacksTrackingSheetd k Sh
27
ExemptFundraiserTrackingSheet SmartSnacksProductCalculator SmartSnacksProductNavigator USDAguidancememosandQ&A’s Smart Snacks Webinar SmartSnacksWebinar
Professional Standards
S A h bl h d f l
28
USDAhasestablishedminimumprofessionalstandardsforschoolnutritionprofessionalswhomanageandoperatetheNationalSchoolLunchandSchoolBreakfastPrograms.
ImplementationbeginsJuly1,2015(SY15‐16)
15
Requirements
bl h
29
Establishesminimumrequirements:HiringstandardsforNEWstatedirectorsHiringstandardsforNEWlocalfoodservicedirectors
AnnualtrainingstandardsforALLschoolnutritionlemployees
State Director-Nutrition Programs
Bachelor’sdegreewithanacademicmajorinareas including food and nutrition food service
30
areasincludingfoodandnutrition,foodservicemanagement,dietetics,familyandconsumersciences,nutritioneducation,culinaryarts,business,orarelatedfield
Hiringstandardsarefornewhiresonly
16
School Nutrition Program Directors
Hiringstandardsarebasedon3LEAsizecategories:
31
categories: 2,499orlessstudentenrollment 2,500‐9,999studentenrollment 10,000ormorestudentenrollment
Hiringstandardsarefornewhiresonly
Hiring Standards
ForsmallLEAs(≤2,499students):B h l ’ d ith ifi j OR
32
Bachelor’sdegreewithspecificmajor,OR Bachelor’sdegreewithanyacademicmajor,andaState‐recognizedcertificate,OR
Associate’sdegreewithspecificmajorandatleast1yearofexperience,OR
Highschooldiploma(orGED)and3yearsofexperience
ForverysmallLEAs(<500students): Stateagencyhasdiscretiontoapprovethehiringofadirectorthathasahighschooldiplomabutlessthan3yearsofexperience
17
Hiring Standards
Formid‐sizeLEAs(2,500‐9,999students):B h l ’ d i h ifi j OR
33
Bachelor’sdegreewithspecificmajor,ORBachelor’sdegreewithanyacademicmajor,andaState‐recognizedcertificate;OR
Bachelor’sdegreewithanyacademicmajorandatleast2yearsofexperience,OR
Associate’sdegreewithspecificmajorandatleast2yearsofexperience
Hiring Standards
ForlargeLEAs(10,000ormorestudents):B h l ’ d i h ifi j OR
34
Bachelor’sdegreewithspecificmajor,ORBachelor’sdegreewithanyacademicmajor,andaState‐recognizedcertificate;OR
Bachelor’sdegreewithanyacademicmajorandatleast5yearsexperienceinmanagementofprograms
18
Food Safety Certification
ForNewSchoolFoodAuthority(SFA)directorsin All LEAs:
35
inAllLEAs: Atleast8hoursoffoodsafetytrainingwithin5yearspriortothestartingdate,orcompletedwithin30daysofthestartingdate
Training Standards
SFAdirectors 8 hours ‐ SY 2015‐2016
36
8hours SY2015 2016 12hours‐ beginningSY2016‐2017
SFAmanagers 6hours‐ SY2015‐2016 10hours‐ beginningSY2016‐2017
SFAstaff 4hours‐ SY2015‐2016 6hours‐ beginningSY2016‐2017
Part‐timestaffworkinganaverageoflessthan20hrs/week 4hours‐ SY2015‐2016andbeyond
19
Training Standards - Flexibilities
A l h d 1 l l
37
AnemployeehiredJan.1orlatermustcompletehalfoftherequiredtraininghours
InSY2015‐2016:TrainingreceivedthreemonthspriortoJuly1,2015,countstowardthefirstyear’strainingrequirementsforallSFApersonnel
Missouri Training Opportunities
AnnualSummerWorkshops
38
Webinars
E‐LearningModules(inprocessofdevelopment)
20
SFA Oversight
Documentcompliancewiththehiringandtraining standards for SFA director manager and
39
trainingstandardsforSFAdirector,managerandstaff
DocumentationmustbeavailableforAdministrativeReview Technicalassistanceandcorrectiveactioncanbe
d t dd liusedtoaddressnoncompliance
ContactUs40 Co tact Us
MissouriDepartmentofElementaryandSecondaryEducationFoodandNutritionServices
P.O.Box480JeffersonCity,MO65102‐0480
The Department of Elementary and Secondary Education does not discriminate on the basis of race, color, religion, gender, national origin, age, or disability in its programs and activities. Inquiries related to Department programs and to the location of services, activities, and facilities that are accessible by persons with disabilities may be directed to the Jefferson State Office Building, Office of the General Counsel, Coordinator – Civil Rights Compliance (Title VI/Title IX/504/ADA/Age Act), 6th Floor, 205 Jefferson Street, P.O. Box 480, Jefferson City, MO 65102-0480; telephone number 573-526-4757 or TTY 800-735-2966; email [email protected].
Telephone:(573)751‐3526Web:http://dese.mo.gov/financial‐admin‐services/food‐
nutrition‐servicesEmail:[email protected]
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Fraud and the Bottom LineProtecting Revenue from Theft
MSPCAMSPCA
2015 School Audit Conference
May 5, 2015
Grant me the serenity to accept the fraud I cannot prevent
The Fraud Serenity Prayer
cannot prevent
The controls to prevent the fraud I can,
And may my insurance policy cover the difference
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62% of Companies experienced actual or attempted payment fraud in 20141
How Prevalent is Fraud?
attempted payment fraud in 2014
The typical organization loses 5% of its revenue to fraud each year2
More than 50% of companies experience a form of online banking fraud over a calendar year.3
1 AFP 2015 Payments and Fraud Control Survey2 ACFE 2014 Report to the Nations on Occupational Fraud and Abuse3 Guardian Analytics 2012 Business Banking Trust Study
1. Internal Fraud
• Operational Fraud
Types of Fraud
Operational Fraud
2. External Fraud
• Corporate Account Takeover
• Payment Fraud
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Operational Fraud
Operational Fraud by Industry
IndustryNumber of
CasesPercentage of Survey
Median Loss
B ki & Fi i lBanking & FinancialServices
244 17.8% $200,000
Gov. & PublicAdministration
141 10.6% $64,000
Manufacturing 116 8.5% $250,000
Health Care 100 7.3% $175,000
Education 80 5.9% $58,000
Retail 77 5.6% $54,000
Insurance 62 4.5% $93,000
Other 52 3.8% $130,000
Oil and Gas 49 3.6% $450,000
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Operational Fraud by Size of Company
©2014 Association of Certified Fraud Examiners, Inc.
Operational Fraud by Size of Company
©2014 Association of Certified Fraud Examiners, Inc.
5
Percentage of Cases
Asset Misappropriation………….. 85.4%
Types of Operational Fraud
pp p
Corruption……………………………… 36.8%
Financial Statement Fraud......... 4.8%
Median Loss
Financial Statement Fraud………. $1,000,000
Corruption………………………………. $200,000
Asset Misappropriation…………… $130,000
TypePercent of all
CasesMedian Loss
Asset Misappropriation
Billing 22.3% $100,000
Non-Cash Misappropriations 21.0% $95,000
Expense Reimbursements 13.8% $30,000
Cash on Hand 11.9% $18,000
Skimming 11.8% $40,000
Check Tampering 10.9% $120,000
Payroll 10.2% $50,000
Cash Larceny 8.9% $50,000
Cash Register Disbursements 2.8% $20,000
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Asset Misappropriation
Education
TypeNumber of
CasesPercent of
Cases
Corruption 29 36.3%
Billing 27 33.8%
Expense Reimbursements 25 31.3%
Skimming 16 20.0%
Payroll 13 16 3%Payroll 13 16.3%
Cash on Hand 13 16.3%
Non-Cash 10 12.5%
Corruption and Billing Schemes
Shell
Legitimate
Company
Materials Order
gVendor
7
DeWitt Company – Sikeston, MO
One employee placed in charge of ordering
Corruption and Billing Schemes
One employee placed in charge of ordering materials from KT America
The owner of KT America inflated prices by an average of 3%, and split the additional funds with DeWitt’s purchasing employee.
DeWitt’s employee received an estimated $950 000 over 7 years through the kickback$950,000 over 7 years through the kickback scheme
Non-Cash Misappropriations
Employee steals supplies equipment orsupplies, equipment, or inventory from their employer
Employee steals or misuses customer information
8
Expense Reimbursements & Payroll
Expense Reimbursements PayrollEmployee’s expense report contains…
Personal Travel
Non-Existent Meals
Personal Item purchases
I fl t d i
Employee claims overtime hours not actually worked
Employee adds a non-existent (ghost) employee to the payrollInflated prices payroll
Check Tampering
Employee steals blank check stock and writes checks to th lf lithem self, an accomplice, or for personal purchases
Employee steals accounts payable check, alters payee, and deposits in their own account
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The Perpetrators
PositionPercentage of
CasesMedian Loss
Median Months to Detect
Employee 42.0% $75,000 12
Manager 36.2% $130,000 18
Owner/Executive 18.6% $500,000 24
The Perpetrators
51.6% of perpetrators are between the ages of 31-45g
68% of perpetrators have been employed for 1-10 years
53.8% of perpetrators have a college degree
86.6% of perpetrators have never been charged or convicted of a fraud-related offense
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The Perpetrators
The Average Perpetrator…
A 30+Age 30+
College Educated
Established and loyal Employee
Clean criminal and work historyhistory
Behavioral Red FlagsLiving Beyond Means
The Perpetrators
Present in 76 8% of casesg y
Financial Difficulties
Unusually close relationships with Vendors
Control Issues
“Wheeler-Dealer” Attitude
Divorce/Family problems
Irritable Suspicious Defensive
Present in 76.8% of cases
Irritable, Suspicious, Defensive
Addiction problems
Disgruntled with pay or authority level
Refusal to take vacation
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As of the release of the 2014 ACFE Report to the Nations survey 58 4% of companies
The Average Result…
the Nations survey, 58.4% of companies surveyed had recovered $0.00 of stolen funds!
42.2%Tip
Detection Method
Mitigating Operational Fraud
77 4%
81.4%
Code of Conduct
External Audit
In Place Controls
2.6%
3.0%
4.2%
6.6%
6.8%
14.1%
16.0%
Surveillance/Monitoring
External Audit
Document Examination
Account Reconciliation
By Accident
Internal Audit
Management Review
45.4%
47.8%
47.8%
52.4%
54.1%
62.0%
62.6%
65.2%
70.0%
70.6%
77.4%
Anti-Fraud Policy
Fraud Training for Execs
Fraud Training for Employees
Employee Support Programs
Hotline
Independent Audit Committee
Mgt. Review
External Audit of ICOFR
Mgt. Cert. of F/S
Internal Audit
Code of Conduct
0.5%
0.8%
1.1%
2.2%
Other
Confession
IT Controls
Notified by Police
10.5%
19.9%
33.2%
33.5%
34.8%
38.6%
Rewards for Whistleblowers
Mandatory Vacation
Surprise Audits
Formal Fraud Risk …
Proactive Data Monitoring
Fraud Department
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1. Do not rely solely on External Audits
Mitigating Operational Fraud
2. Implement appropriate internal controls
3. Perform random, internal audits and reviews
4. Provide employee and management training
5. Establish a reporting mechanism
6. Know your business and your employees
1. Corporate Account TakeoverInformation theft
External Fraud
• Information theft
• Online Banking Fraud
• Online attacks via viruses, trojans, phony websites, etc.
2. Payment Fraud• Counterfeit Checks
• Check washingCheck washing
• Fraudulent ACH Payments
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Corporate Account Takeover
FBI Investigating Theft of $500,000 from NY School
District
Computer Crooks Steal $100,000 from Ill. Town
Cyber attackers empty business accounts in minutes
e-Banking Bandits Stole $465,000 From Calif. Escrow Firm
N.Y. Firm Faces Bankruptcy from $164,000 E-Banking Loss
Corporate Account Takeover
Target VictimVictim
Initiate Funds
Transfer or sell Info
Install Malware
Log on to
Online Banking
Collect & Transmit
Data
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Corporate Account Takeover
Corporate Account Takeover
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Corporate Account Takeover
Golden State Bridge – CA
$125 000 transferred via ACH over
Patco – Maine
$588 000 transferred over 5 nights$125,000 transferred via ACH over two nights
Account was hacked after an office manager visited a social networking site and accidentally downloaded malware.
CFO had purchased proper insurance after similar fraud
$588,000 transferred over 5 nights by malware
Only recovered $200,000
Little & King – New York
Hackers stole $164,000 over a insurance after similar fraud occurred 3 years earlier
$ ,holiday weekend
Owner couldn’t recover funds, and had to merge with another agency
1. Educate Employees
2 Be wary of unsolicited emails and attachments
Mitigating Corporate Account Takeover
2. Be wary of unsolicited emails and attachments
3. Install, maintain, and update spam filters, anti-virus software, and firewalls
4. Utilize banking products such as ACH Filter or ACH Positive Pay
5. Require dual approval for all funds transfers (ACH, Wires, etc) from different computersetc) from different computers
6. Dedicate one computer as online banking computer
7. Review insurance policies to ensure these fraud schemes are covered.
16
Payments Fraud
62% of companies surveyed experienced actual or attempted fraud
AFP Survey Highlights
or attempted fraud
77% of effected companies reported their checks were targeted
Average loss was $20,000
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How Payment Fraud Occurs
Vendor CheckVendor Check$$$
Counterfeit$$$
Counterfeit$$$
Counterfeit$$$$$$$$$$$$
How Payment Fraud Occurs
Vendor CheckVendor Check$$$
Altered Check$$$$$$
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How Payment Fraud Occurs
How Payment Fraud Occurs
Payroll Check$$$
RTN$$$
RTN #Acct #
19
Wire fraud increased from 14% to 27% in 2014, becoming the 3rd most targeted form of payment
Wire Schemes
becoming the 3 most targeted form of payment fraud.
1. Reduce Check Writing
Mitigating Payments Fraud
2. Frequent reconciliation (daily if possible)
3. Be the Originator of ACH transactions
4. Separate Accounts (Operating, Payroll, etc)
5. Outsource payroll to a 3rd party
6. Utilize Positive Pay and ACH Filter products
20
Association of Certified Fraud Examiners (ACFE)
A i ti f Fi i l P f i l (AFP)
Resources
Association of Financial Professionals (AFP)
FBI Fraud Advisory for Business: Corporate Account Takeover
Internet Crime Complaint Center (IC3)
National Automated Clearing House Association g(NACHA)
Thank You!
Nate Bibens UMB Bank
AVP/Treasury Management Officer
417.885.3757
1150 E Battlefield1150 E. Battlefield
Springfield, MO 65807
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FINANCIALANDADMINISTRATIVE
SERVICESSERVICES
NewOMNIforAuditors
MissouriDepartmentofElementaryandSecondaryEducationMay5,2015
Effective Dates for OMNI
D b 26 2014 Di G f ED December26,2014– DirectGrantsfromED
July1,2015– StateAdministeredPrograms
July1,2016– FY16AuditsJu y , 0 6 6 ud ts
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Audit Requirements 200.501
C h h ld $500 000 Currentthreshold$500,000 NEW:threshold$750,000
Ifnosingleauditisrequired,recordsmustbemadeavailableforrevieworauditbyofficials.y
Auditees Responsibilities 200.508
h d d Procureorarrangetheauditrequired Prepareappropriatefinancialstatements Promptlyfollow‐upandtakecorrectiveactiononauditfindings(correctiveactionplanmustbeinaseparatedocument,notintheaudit§200.511)
Providetheauditorwithaccesstopersonnelandrecords
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Report Submission 200.512
Datacollectionformandreportingpackagearedue to the Federal Audit Clearinghouse withinduetotheFederalAuditClearinghousewithintheearlierof30calendardaysafterreceiptofreportorninemonthsaftertheendofauditperiod
DataCollectionForm ReportingPackage Reportretentionrequiredfor3yearsfromdatesubmitted
Audit Reporting 200.515
Auditreport(s)muststatethattheauditwasconducted in accordance with §200 515 auditconductedinaccordancewith§200.515auditreporting
Andinclude: Anopiniononthefinancialstatements Areportoninternalcontroloverfinancialreportingandcompliancewithprovisionsoflaws,regulations,p p , g ,andawardagreements
Reportoncomplianceforeachmajorprogramandreportoninternalcontrolovercompliance
Scheduleoffindingsandquestionedcosts
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Audit Finding 200.516
Significantdeficienciesandmaterialweaknessesand significant instances of abuseandsignificantinstancesofabuse
Materialnoncompliance Knownquestionedcostsgreaterthan$25,000foramajorprogramandnonmajorprogram
Reasonformodifiedopiniononmajorprogram
Audit Finding 200.516 cont.
l k l f d ff f d l d Knownorlikelyfraudaffectingafederalaward Auditfindingdetailandclarity Referencenumbers
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Major Program Determination 200.518
RiskbasedapproachtodeterminewhichFederalprograms are major programsprogramsaremajorprograms. Processinparagraphs200.518(b)through(h)mustbefollowed.
(b)IdentifyTypeAprograms (c)IdentifyTypeAprogramswhicharelow‐risk(d) Id tif T B hi h hi h i k (d)IdentifyTypeBprogramswhicharehigh‐risk
(e)AuditormustauditallTypeAprogramnotidentifiedaslowriskandallTypeBprogramsidentifiedashighriskasmajorprograms
Major Program Determination 200.518
(f) Percentage of coverage rule (f)Percentageofcoveragerule Low‐riskauditee– 20% High‐riskauditee– 40%
(g)Documentationofrisk (h)Auditor’sjudgment
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Criteria for Low Risk Auditee 200.520
S l d f d ll l d Singleauditsperformedannually,includingsubmissionofdatacollectionandreportingpackagetotheFederalAuditClearinghouse
Auditor’sopiniononthefinancialstatementsandSEFAwereunmodified
Nomaterialweaknessesininternalcontrolwereidentified
Criteria for Low Risk Auditee 200.520
A d d d Auditordidnotreportagoingconcern Noneofthefederalprogramshadauditfindingsinpriortwoauditperiods