1. Single Audit Update Presented by:
Renita Duncan, Partner, RubinBrown LLP
Ted Williamson, Partner, RubinBrown LLP
July 11, 2018
Removed several sections (internal control, other single audit developments) and DOE slides

2. Agenda Overview of the Uniform Guidance
Changes to Single Audit Requirements
2018 Single Audit Compliance Supplement: Changes From Previous Year
Procurement
Reporting
Resources

3. Overview of the Uniform Guidance

4. Background
Historically, Single Audit requirements have 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. OMB Uniform Guidance
December 26, 2013 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards issued
Codified into Title 2, Part 200 of the Code of Federal Regulations
Supersedes Circular A-133 and prior cost circulars
Referred to as the “Uniform Guidance” or “UG”

6. Effective Dates
Federal agencies were required to implement the 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 issued on or after December 26, 2014

7. Effective Dates
“Incrementally funded” criterion applies to situations in which the federal agency considers the funding increments to be “opportunities to change award terms and conditions” (per COFAR FAQ )
May need to contact federal agency to determine whether they consider funding increments to be such an opportunity

8. Effective Dates
When contacting federal agency, be sure to use Single Audit Contacts listing in Appendix III of the Compliance Supplement (discussed later in this presentation)
The effective date of the UG to subawards is the same as the effective date of the federal award from which the subaward is made

9. Effective Dates
New Single Audit requirements are effective for fiscal years beginning on or after December 26,
Thus, first effective for December 31, 2015 fiscal year ends
All 2016 and later single audits should be performed under the Uniform Guidance only
There is no circumstance where the auditor would perform the audit under both Circular A-133 and UG
Should be in year 3 of the audit requirements

10. Changes to Single Audit Requirements

11. Changes to Single Audit Thresholds
Threshold for requiring a Single Audit increased from $500,000 to $750,000
Threshold for Type A programs (large programs that must be audited at least once every 3 years) increased from $300,000 to $750,000
Threshold for Type B risk assessment changed to 25% of the Type A threshold

12. Changes to Major Program Determination
The UG makes a Type A program high risk if, in the most recently audited period, the program:
Did not receive an unmodified opinion;
Had a material weakness in internal control;
Had questioned costs exceeding 5% of the program’s expenditures

13. Changes to Major Program Determination
Other factors to consider when determining if a Type A program is low risk or high risk:
Oversight exercised by federal agencies and pass-through entities;
The results of audit follow up;
Any changes in personnel or systems affecting the program
These are the only requirements that may be considered when determining if a Type A program is high risk

14. Changes to Major Program Determination
Auditors must identify and select as major high-risk Type B programs equal to ¼ the number of low risk Type A programs
Under Section , all Type B programs identified as high risk must be audited
Don’t assess risk on more Type B’s than necessary

15. Changes to Major Program Determination
Percentage of federal dollars that must be audited as major changed to:
40% for high-risk entities
20% for low risk entities

16. Changes to Low-Risk Auditee Criteria
New requirements to be a low-risk auditee:
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

17. Changes to SEFA
The UG requires additional information to be included on the Schedule of Expenditures of Federal Awards (SEFA) as follows:
Total amount provided to subrecipients from each federal program

18. Changes to SEFA
The UG requires additional information to be included on the Schedule of Expenditures of Federal Awards (SEFA) as follows:
For loans and loan guarantee programs, disclose in the notes to the SEFA the outstanding balance of loans and notes at the end of the audit period
Disclose in the notes to the SEFA whether the entity elected to utilize the 10% de minimis cost rate

19. Findings
Previously, a Single Audit finding was required if known or likely questioned costs exceed $10,000
The UG increases this threshold to $25,000
Must include a description of how questioned costs were calculated

20. Compliance Requirements
Under Circular A- 133, there were 14 Compliance Requirements:

21. Changes to Compliance Requirements
Two of the 14 compliance requirements have been eliminated:
Davis Bacon Act
Real Property and Relocation Assistance
For certain programs, these requirements have been added back as Special Tests and Provisions

22. 2018 Single Audit Compliance Supplement: Changes From Previous Year

23. Single Audit Compliance Supplement
Effective for fiscal years ending June 30 or later in the year issued
2018 Compliance Supplement issued 5/18/2018
content/uploads/2018/05/2018-Compliance- Supplement.pdf
2017 Compliance Supplement can be found at
b/circulars/A133/2017/Compliance_Supplement_2017.pdf

24. 2018 Compliance Supplement
New format in 2018
Adds, deletes, and modifies prior supplement sections
Only those sections and programs deemed to have a significant change from prior year will be included in the 2018 Supplement (“skinny supplement”)
Users will have to use in conjunction with Compliance Supplement

25. 2018 Compliance Supplement
2018 Supplement will also include clarifications on Uniform Guidance procurement requirements (discussed later in this presentation)
Appendix V provides a complete list of changes from the 2017 Compliance Supplement or
GAQC 2018 Supplement Access Tool
/resources/singleaudit/2018-omb-compliance-supplement.html

26. 2018 Compliance Supplement

27. 2018 Compliance Supplement
Part 2 – Matrix of Compliance Requirements
2018 Supplement does not include an updated Matrix of Compliance Requirements
Auditor must use the individual program matrices for the programs in Part 4
Part 3 – Compliance Requirements
Procurement and Suspension and Debarment section updated to provide information on the impact of the National Defense Authorization Acts (NDAA) of 2017 and regarding simplified acquisition and micro-purchase thresholds

28. 2018 Compliance Supplement
Part 4 – Agency Program Requirements
Several programs had requirements that were added, removed or revised
Part 5 – Clusters of Programs
Changes to Student Financial Aid Cluster
Revised to add new cluster

29. Federal Agency Contacts
Appendix III – Key Management Liaison and Program Contacts
Lists of individuals at each federal agency to contact with Single Audit questions
Management liaison: contact for administrative and overarching programmatic questions
Program contacts: Detailed programmatic and audit- related questions

30. Compliance Supplement – Appendix III

31. Procurement

32. Procurement Requirements
The UG defines five methods of procurement to be used:
Micro purchases – less than $3,500 (some exceptions discussed on later slides)
Small purchases – $3,500 to $150,000 (the Simplified Acquisition Threshold)
Sealed bid purchases – Over $150,000; preferred for construction

33. Procurement Requirements
The UG defines five methods of 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
Note that dollar thresholds are subject to change periodically. Please be sure to check OMB guidance at least annually.

34. Micro Purchases
Acquisition that, in aggregate, does not exceed the micro-purchase threshold
Micro-purchase threshold set by Federal Acquisition Regulation (FAR) at 48 CFR subpart 2.1
Subject to change
Currently, $3,500 (however there are some exceptions)

35. Micro Purchases
Purchase orders may be awarded without soliciting competitive quotations if costs are considered reasonable by the entity
To the extent possible, purchases must be distributed equitably among qualified suppliers

36. Micro Purchases - Exceptions
National Defense Authorization (NDAA) Acts
Act – PL , Sec Increases micro-purchases threshold to at least $10,000 for institutions of higher education or related or affiliated nonprofit entities, nonprofit research organizations, and independent research institutes

37. Small Purchases
Price or rate quotations must be obtained from 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

38. Sealed Bid Purchases Bids are publicly solicited
Firm, fixed price contract awarded to lowest responsible bidder
Invitation for bids must be publicly solicited providing sufficient response time before the bid opening
Invitation must include necessary specifications for the bidder to properly respond

39. Sealed Bid Purchases
Bids are opened at the time and place prescribed in the invitation for bids
Any and all bids may be rejected if there is a sound documented reason

40. Conditions Necessary for Sealed Bid Purchases
Complete, adequate, and realistic 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 contract and the selection of a successful bidder can be made principally on the basis of price

41. Competitive Proposal Purchases
Used when conditions are not appropriate for sealed bids
Requests for proposals are publicized and identify evaluation factors
Proposals solicited from an adequate number of qualified sources
Must use written method for conducting technical evaluations of the proposals received

42. Competitive Proposal Purchases
Contracts awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered
For architectural and engineering services, it is acceptable to evaluate competitors’ qualifications, select the most qualified, and then negotiate a fair and reasonable price

43. Noncompetitive purchases
Only permitted when one or more of the 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 proposals
After solicitation of a number of sources, competition is determined inadequate

44. The Procurement “Claw”

45. Grace Period
The federal government is providing a grace period after the effective date for non-federal entities to comply with the procurement standards
Grace period is 3 full fiscal years after the effective date of the UG, which was December 26, 2014 (implementation for fiscal years beginning on or after December 26, 2017)
The non-Federal entity must document whether it is in compliance with the old or new standard, and must meet the documented standard

46. Grace Period
For example, for a non-Federal entity with a June 30th year end, implementation would be required during the year ending June 30, 2019.
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 UG.

47. Procurement, Suspension and Debarment Checklist
Written procedures for procurement transactions ( )
Written policy regarding grace period
Verification of the requirements for suspension and debarment? ( )(2 CFR part 180)
Checking the Excluded Parties List System (EPLS) available at
Collecting a certification from the entity, or
Adding a clause or condition to the covered transaction with the entity
Ho Verification should be performed over covered transactions equal to or exceeding $25,000 ( ) (2 CFR part 180)

48. Procurement, Suspension and Debarment Checklist
Maintain written standards of conduct covering conflicts of interest ( )
Maintain procurement history file ( )
Perform cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold ( )
Training on an annual basis to update key personnel regarding changes and updates to the Uniform Guidance

49. Reporting

50. Components of Single Audit Report Package
Government Auditing Standards report on internal control and compliance
Report on compliance and internal control related to the single audit
Schedule of expenditures of federal awards
Footnote to the schedule of expenditures of federal awards

51. Components of Single Audit Report Package
Schedule of findings and questioned costs
Corrective Action Plan
Summary Schedule of Prior Audit Findings

52. Required Elements of An Audit Finding (200.516)
Federal Program, CFDA title and number, FAIN and year, name of federal agency, and name of applicable pass-through entity
Criteria or specific requirement
Condition found
Cause of the condition found
Effect or potential effect

53. Required Elements of An Audit Finding (200.516)
Identification of questioned costs
Sampling method and number of items found and dollar value
Identification of whether audit finding is repeat
Recommendations
Views of responsible officials

54. Auditee Section of Single Audit Report
The Corrective Action Plan is a distinct element of the reporting package
“Views of Responsible Officials” element of an audit findings does not meet the UG requirement for a CAP
The Corrective Action Plan and Summary Schedule of Prior Audit Findings must:
Be prepared by the auditee
Include financial statement findings under GAS in addition to single audit findings
Be on auditee letterhead (recommended by AICPA)

55. Auditee Section of Single Audit Report
The Corrective Action Plan must include the following elements:
Names of contact person responsible for corrective action plan
The corrective action planned
The anticipated completion date

56. Auditee Section of Single Audit Report
Summary Schedule of Prior Audit Findings should include the following:
If a prior finding has been fully corrected, the schedule should indicate that corrective action has been taken
If a prior finding has been partially corrected or not corrected, the schedule should describe the planned corrective action as well as any partial corrective action taken
Simply referring to the repeated finding in the current year is not sufficient

57. Resources

58. Single Audit Resources
Single Audit Compliance Supplement
Discussed earlier
Code of Federal Regulations (CFR)
Available at
Also can simply enter relevant CFR section into Google

59. Single Audit Resources
Council on Financial Assistance Reform (COFAR)
Frequently asked questions are available at COFAR/COFAR resources
UniformGuidanceFrequentlyAskedQuestions.pdf
AICPA Audit and Accounting Guide for Government Auditing Standards and Single Audits
Purchase at

60. Single Audit Resources
AICPA Government Audit Quality Center (GAQC)
Available at: uality/Pages/GAQC.aspx