1. Single audits
History, Purpose, and Improvements

2. Objectives Today – You’ll get an overview of single audits
You’ll be introduced to the OMB’s new grants management supercircular and its:
administrative requirements
cost principles, and
audit requirements
THERE ARE A LOT OF CHANGES HAPPENING RIGHT NOW IN GRANTS MANAGEMENT
THEY’RE MOSTLY HAPPENING WITH ONE DOCUMENT – GOOD
BUT THE DOCUMENT IS 250 PAGES LONG
EASILY HAVE A 3 DAY TRAINING – BUT TODAY WE’RE ONLY DOING 1 HOUR
I ALWAYS FEEL LUCKY THAT I CAN DO HIGH LEVEL OVERVIEWS – I THINK THEY’RE KIND OF FUN
THE DETAIL CLASSES MIGHT BE FUN TOO, BUT IN A DIFFERENT WAY
TO HELP US UNDERSTAND THE REFORMS AND WHERE WE’RE GOING, I THOUGHT IT MIGHT BE HELPFUL TO TALK A BIT ABOUT WHERE WE STARTED FROM AND KIND OF AN OVERVIEW OF WHAT SINGLE AUDITS ARE ALL ABOUT.
GRANTS MANAGEMENT REFORM IS HAPPENING IN THREE AREAS
ADMINISTRATIVE REQUIREMENTS
COST PRINCIPLES
AUDIT REQUIREMENTS
I’M AN AUDITOR SO I’LL COVER THOSE CHANGES IN A LITTLE MORE DETAIL.
I HAVE TO KNOW A BIT ABOUT ADMIN AND CP, BUT I CAN ALWAYS LOOK THEM UP AFTER THE FACT. I DON’T HAVE TO DESIGN SYSTEMS THAT ENSURE COMPLIANCE, THAT WOULD TAKE MORE KNOWLEDGE THAN I HAVE OR WANT TO HAVE…
I’LL SHARE A FEW OF THE CHANGES IN ADMIN AND COST PRINCIPLES

3. OMB’s New Guidance
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
December 26, 2013
Document and the related crosswalks can be obtained at:
Document, crosswalks, slide shows, FAQs, and video discussion links can be obtained at:
WE’RE NOT MAKING ANY GUIDANCE HERE TODAY – OR REGULATIONS EITHER
GUIDANCE IS WHAT OMB PROVIDES TO AGENCIES, REGULATIONS ARE WHAT AGENCIES MAKE AND PUT IN THE FEDERAL REGISTER.

4. Federal Agency Non Federal Entity Why Single Audit? Financial-related
Payments
Receipts
Purchasing
Payroll
Equipment
Accounting
Reporting
Other
Performance
Non Federal Entity
Federal Agency
Financial-related
Payments
Receipts
Purchasing
Payroll
Equipment
Accounting
Reporting
Other
Performance
Financial-related
Payments
Receipts
Purchasing
Payroll
Equipment
Accounting
Reporting
Other
Performance

5. Federal Agency Single Auditor Why Single Audit? Non Federal Entity
Other Oversight
Other Oversight
Non Federal Entity
Single Auditor
Federal Agency
Financial-related
Payments
Receipts
Purchasing
Payroll
Equipment
Accounting
Reporting
Other Oversight

6. Single audit Objectives and requirements
Single Audit Act
OMB Circular A-133
OMB Compliance Supplement
Objectives
Financial statement audit
Provide SEFA opinion
Understand and test internal control
Determine major program compliance

7. SEFA
Schedule of Expenditures of Federal Awards

8. Single Audit Report

9. Single Audit Finding

10. Basic Structure of Single Audit
Audit threshold ( )
Subrecipient vs. Contractor ( (f) & )
Non-Federal entity selects auditor ( )
Auditee prepares financial statements & SEFA ( )
Audit follow-up & corrective action ( & )
9 month due date (set in law) ( (a))
Reporting to Federal Audit Clearinghouse ( )
Major programs determined based on risk ( )
Compliance Supplement overall format

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

12. What’s Wrong? Administrative Requirements Cost Principles
A-102, Grants and Cooperative Agreements with State and Local Governments
A-110, Uniform Administrative Requirements for Grants and Other Agreements with Higher Education, Hospitals, and Non-Profits
A-89, Catalog of Federal Domestic Assistance
Cost Principles
A-21, Cost Principles for Educational Institutions
A-87, Cost Principles for State, Local, and Indian Tribal Governments
A-122, Cost Principles for Non-Profit Organizations
Audit Requirements
A-133, Audits of States, Local Governments, and Non-Profits
A-50, Audit Follow-up
UNIFORM GUIDANCE

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

14. Structure of Uniform Guidance
Subpart
Old Circular
A: Acronyms and Definitions
All
B: General Provisions
C: Pre-Federal Award Requirements and
contents of Federal Awards
A-110 and A-89
D: Post-Federal Award Requirements
A-110 and A-102
E: Cost Principles
A-21, A-87, and A-122
F: Audit Requirements
A-133
Appendices
Subparts B, C, D are the Administrative Requirements

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

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

17. Significant administrative reforms
Not a Complete List
Supplies
Cost < $5,000
computers
Risk Review
framework
Pre-award
Procurement
Written procedures
Contractor oversight
5 methods
Performance Measurement
Financial data related to performance goals
Internal Controls
‘must’ have
‘should’ use COSO, Green Book
Cost Sharing
Voluntary cost sharing not expected
Pass-Through Grants
Risk assessment to determine monitoring
Audit follow-up
Mandatory Disclosures
All violations of federal criminal law

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

19. Significant cost principles reforms
Admin Costs
Can be direct
Indirect Costs
Fed negotiated rate must be accepted
10% de minimis
4-year extension
Profits
Can’t keep
Compensation – Personal Services
Controlled alternates
Blended/Braided maybe
Adjusted estimates
Not a Complete List
Employee Morale
maybe
Supplies Costs
Can be direct
Recruiting Costs
Unreasonable is unallowable
Resign<12 months - refund
Travel Costs
Temp dependent care allowed for conferences

20. (Subpart F of Uniform Guidance)
Audit Requirements
(Subpart F of Uniform Guidance)

21. Basic Structure of Single Audit unchanged
Audit threshold ( )
Subrecipient vs. Contractor ( (f) & )
Non-Federal entity selects auditor ( )
Auditee prepares financial statements & SEFA ( )
Audit follow-up & corrective action ( & )
9 month due date (set in law) ( (a))
Reporting to Federal Audit Clearinghouse ( )
Major programs determined based on risk ( )
Compliance Supplement overall format

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

23. Type A threshold change
Groupings are based on dollars — Type A programs are those above the dollar threshold, Type B are those below
The minimum threshold is increased from $300,000 to $750,000.
If total Federal awards expended is:
Then Type A programs are those with Federal awards expended of the greater of
$750K thousand to $25 million
$750,000
$25 million to $100 million
(.03) of total awards expended
$100 million to $1 billion
$3 million
$1 billion to $10 billion
(.003) of total awards expended
$10 billion to $20 billion
$30 million
$20 billion or more
(.0015) of total awards expended

24. Excluding large loan programs
Incorporates the guidance on the inclusion or exclusion of large loan or loan guarantee programs in determining the Type A threshold that is currently in the Compliance Supplement
Guidance related to a cluster of programs was modified as follows:
A cluster of programs is treated as one program in determining Type A programs. For the purposes of excluding large loan programs in the determination of other Type A programs, a cluster of programs is not considered to be a loan program if the individual loan programs within the cluster comprise less than 50% of the expenditures of the cluster.

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

26. Selecting high risk b programs
Current
Option 1 - Perform risk assessments on all Type B programs* and select one half of Type B programs identified as high risk up to number of low-risk Type A programs
Option 2 - Perform risk assessments on Type B programs until as many high-risk Type B programs have been identified as there are low-risk Type A programs
Revised
Perform risk assessments on Type B programs until high-risk Type B programs have been identified up to 25% of low-risk Type A programs

27. Minimum coverage Type of Auditee Current Revised Not Low Risk 50% 40%
25%
20%

28. Low-risk auditee
Low Risk Auditee if meet all criteria for the last two years:
Annual audits in accordance with A-133
Single audit reporting package and data collection form submitted (accepted) within required timeframe
Financial statements prepared in accordance with GAAP or based on accounting prescribed by applicable state law
Unmodified opinion on FS and SEFA
Auditor did not report substantial doubt about going concern
No material weaknesses in internal control over financial reporting
No Type A program had:
Material weakness
Modified opinion on compliance
Questioned costs > 5% of Federal awards expended

29. OMB Goals for Major program changes
OMB believes the changes to the major program determination will result in:
A more targeted audit coverage focusing on programs with material internal control weaknesses.
Appropriate burden relief for entities that materially comply as evidenced by an unqualified audit opinion and no material weaknesses in internal controls or material questioned costs.
Incentive for entities to focus on correcting the deficiencies that indicate underlying weaknesses in internal controls.

30. Compliance requirements
Current
Proposed in February 2013
A. Activities Allowed or Unallowed 
B. Allowable Costs/Cost Principles
Incorporated into A.
C. Cash Management
D. Davis – Bacon Act
Agency could request to be part of N.
E. Eligibility
F. Equipment
G. Matching, Level of Effort, Earmarking
Matching incorporated in A. Agency could request the remainder be part of N.
H. Period of Availability of Federal Funds
I. Procurement, Suspension, Debarment
J. Program Income
K. Real Property
L. Reporting
M. Subrecipient Monitoring
N. Special Tests and Provisions
No changes were proposed in the Final Guidance
REMEMBER: THERE WAS AN INITIAL DOCUMENT CIRCULATED WITH SOME IDEAS AND COFAR GOT COMMENTS ON THAT
AND THEN THEY ISSUED THE PROPOSED GUIDANCE IN FEBRUARY 2013

31. Current status of compliance requirements
Many commenters of the proposal were concerned about:
Uniform Guidance does not list compliance requirements
COFAR recommended further public outreach
Changes likely to be issued in 2015 Compliance Supplement
Process to eliminate compliance requirements
Adding back compliance requirements through special tests
Increased administrative burden
Not being subject to public notice and comment period

32. Finding elements Finding Elements Program Information Criteria
Condition
Found
Context
Questioned
Costs
Cause &
Effect
Recommendation
Views of
Responsible
Officials
Whether Sampling was Statistically Valid
Repeat Finding from Prior Year

33. Single Audit Reporting
Face of the SEFA must include -
Noncash assistance
Loan programs, including outstanding balances
Loan guarantee programs

34. Federal Agency Requirements
Federal agencies must:
develop a baseline, metrics, and targets to track the effectiveness of follow-up on audit findings
designate single audit accountable official who must be:
Responsible for ensuring agency fulfillment of responsibilities
Held accountable to improve effectiveness of single audit process
Responsible for designating a single audit liaison
Single audit liaison must:
Serve as agency management point of contact for single audit process
Promote interagency coordination consistency, and sharing in areas such as audit follow-up
Oversee training for Federal agency
Ensure agency updates Compliance Supplement annually

35. summary What we should see if the Uniform Guidance is effective
Complete, faster audit finding resolution
More efficient audits better focused on FWA, improper payments, and recoverable noncompliance
More applicants for grants
Measured grant performance
Similar cost treatment (and more fair)
Similar grant application and administration
More available information (electronically)
Increased internal control

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