Transcript A-133 - UMBC

Departmental Research Administrators
Training Track
OMB Circular A133
Audits of States, Local Governments, and Non-Profit
Organizations
1
An Overview of OMB Circular A133
OMB A-133
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General (Purpose and Definitions)
Audit requirements
Auditee’s Responsiblities
Federal Agencies and Pass-Through Entities Responsiblities
Auditor’s Responsibilities
Appendix A – Data Collection Form
Appendix B – Compliance Supplement
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An Overview of OMB Circular A133
General Purpose and Definitions
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Purpose: This Circular “sets forth standards for obtaining consistency and
uniformity among Federal agencies for the audit of states, local
governments, and non-profit organizations expending Federal awards.”
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Definitions: This section provides definitions of key terms used the the
Circular.
An Overview of OMB Circular A133
Audit Requirements:
Single Audit: Non Federal entities that expend
$500,000 or more in a year in Federal awards are to
conduct a single audit.
 Basis for determining Federal awards expended –
determination is based on when the activity related to
the award occurs
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Expenditure transactions associated with grants
 Disbursement of funds passed through to subrecipients
 The receipt or use of program income
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An Overview of OMB Circular A133
Audit Requirements: (cont’d)
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Provides guidance for determining difference between
subrecipients and vendors.
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Characteristics indicative of a Federal award received of a subrecipient
are when the organization:
Determines who is eligible to receive federal financial assistance
Has performance measured against whether the objectives of the Federal
program are met
 Has responsibility for programmatic decision making
 Has responsibility for adherence to compliance requirements
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Characteristics indicative of payments received by a Vendor
Provides the goods or services within normal business operations
 Provides similar goods or services to many different purchasers
 Operates in a competitive environment
 Is not subject to compliance requirement of the Federal program
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An Overview of OMB Circular A133
Audit Requirements: (cont’d)
Relation to other audits: shall be in lieu of any financial audit
required under individual Federal awards.
 Frequency of audits: annual or occasionally biennial.
 Sanctions: Lists sanctions that can be imposed if audits are
not performed or are performed incorrectly.
 How to treat audit costs.
 Program-specific audits: Guide available for how to handle
including report submission requirements
An Overview of OMB Circular A133
Auditees’ Responsibilities:
Identify all federal awards correctly. Federal Program and award
identification includes:
 CFDA Title and number
 Award number and year
 Name of Federal Awarding Agency
 Name of Pass-Through Entity
 Maintain Internal Control.
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An Overview of OMB Circular A133
Auditees’ Responsibilities: (cont’d)
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Comply with laws, regulations and the provisions of contracts or
grant agreements.
Prepare appropriate financial statements, including schedule of
expenditures of Federal Awards.
Ensure that audit is properly performed and reports submitted
when due.
Follow up and take corrective action on audit findings, including
preparing a summary schedule of prior audit findings and
corrective action plan.
An Overview of OMB Circular A133
Financial Statements
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Auditee must prepare financial statements that reflect its
financial position, results of operations or changes in net
assets
Auditee must prepare a schedule of expenditures of Federal
Awards for the period covered by the financial statements.
 Must list individual Federal programs by agency
 For Federal awards received as a subrecipient, the name of
the pass-through entity must be included.
 Must provide total Federal awards expended for each
program and the CFDA number or other identifying number.
An Overview of OMB Circular A133
Audit Finding Follow-up
 The auditee is responsible for follow-up and corrective
action on all audit findings.
 The summary schedule of prior audit findings reports
the status of all findings included in the prior audit’s
schedule and all audit findings included in the prior
audit’s schedule of findings and questioned costs.
 When audit findings are fully corrected, the summary
schedule need only list audit findings and state that
corrective action was taken.
An Overview of OMB Circular A133
Audit Finding Follow-up (cont’d)
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When audit findings were not corrected or only partially
corrected, the summary schedule should describe the
correction action as well as any partial corrective action taken.
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When the corrective action is significantly different from action
previously reported in a corrective action plan, the schedule
must provide an explanation.
An Overview of OMB Circular A133
Audit Finding Follow-up (cont’d)
 When the auditee believes an audit finding is no
longer valid, the reasons for this position must be
described in the summary schedule. To consider a
finding not warranting further action, all the following
must have occurred:
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Two years have passed since the audit report in which the
finding occurred was submitted to the Federal
clearinghouse.
The Federal agency or pass-through entity is not currently
following up with the auditee on the finding.
A management decision was not issued.
An Overview of OMB Circular A133
Report Submission
 The audit is required to be completed no later
than nine months after the end of the fiscal
year.
 The auditee is to submit a data collection form
which states whether the audit was completed
in accordance with A-133 and provides
information about the auditee, its federal
programs, and the results of the audit.
An Overview of OMB Circular A133
Report Submission (cont’d)
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Compliance Requirements – for each Federal
program
A.
 B.
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Activities allowed or unallowed
Allowable cost/cost principles
Cash management
Davis-Bacon Act
Eligibility
Equipment and real property management
Matching, level of effort, earmarking
An Overview of OMB Circular A133
Compliance Requirements (cont’d)
H.
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Period of availability of Federal funds
Procurement and suspension and debarment
Program Income
Real property acquisition and relocation assistance
Reporting
Subrecipient monitoring
Special tests and provisions
An Overview of OMB Circular A133
Reporting Submission – Reporting Package
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Report Package shall be submitted to the Federal
Clearing House and shall consist of the following:
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Financial statements and schedule of Federal Awards –
Data Collection Form
Summary Schedule of prior audit findings
Corrective action plan
The Federal Clearing House distributes the
information to the appropriate Federal Agencies
An Overview of OMB Circular A133
Federal Agency and Pass-Through Entity Responsibilities
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Recipients expending more than $25 million a
year in Federal Awards are designated a
cognizant agency. The determination is based
upon the amount of direct funding provided to
the entity. UMBC’s cognizant agency is the
Department of Health and Human Resources
An Overview of OMB Circular A133
Cognizant Agency Responsibilities: (Selected)
 1. Provide technical audit advice and liaison to auditees and
auditors;
 2. Consider auditee requests for extension of the report
submission deadline;
 3. Conduct quality control reviews of audits made by nonFederal auditors;
 4. Promptly inform other Federal agencies or law enforcement
officials of any direct reporting by the auditee of irregularities or
illegal acts;
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Advise the auditor, and if necessary, the auditee of any
deficiencies found in the audit;
 6. Coordinate management decisions
An Overview of OMB Circular A133
Federal Awarding Agency Responsibilities
 1. Inform each recipient of the CFDA title and number, award
name and number, award year and if it is R&D.
 2. Advise recipients of requirements imposed by Federal laws
and regulations, and the provisions of contract and grant
agreements.
 3. Ensure that audits are completed and reports are received
in a timely manner.
 4. Provide technical advice to auditees and auditors.
 5. Issue management decision on audit finding within six
months after receipt of the audit report and ensure corrective
action is taken.
An Overview of OMB Circular A133
Pass-through Entity Responsibilities
 Monitor the activities of subrecipients to ensure
Federal awards are used for authorized purposes in
compliance with laws, regulations and the provisions
of contracts and grant agreements, and that
performance goals are achieved.
 Ensure that subrecipients expending more than
$500,000 or more in Federal awards have met
applicable audit requirements.
 Issue a management decision on audit findings within
six months after receipt of the subrecipients audit and
ensure corrective action is taken.
An Overview of OMB Circular A133
Auditors’ Responsibilities
 Describes the scope of the audit - Financial
Statements, Internal Controls, and Compliance.
 How much detail? Required to cover the entire
operation of the auditee
 Required to report deficiencies in internal control over
major Federal programs, material noncompliance,
known fraud affecting a Federal award.
 Required to use a risk-based approach to determine
which Federal programs are major programs
An Overview of OMB Circular A133
Where to get more information?
http://www.whitehouse.gov/omb/rewrite/circulars/a133/a133.h
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