Single Audit Update

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Transcript Single Audit Update

Single Audit
The Super Circular
Presented by:
William Blend, CPA, CFE
 Overview of Super Circular
 Updates to Single Audit Requirements
 Data Collection Form
It’s Here – The Super Circular
OMB - 2CFR Chapter 1 and Chapter II,
Parts 200, 215, 220, 225 and 230
Uniform Administrative Requirements,
Cost Principles, and Audit Requirements for
Federal Awards
 Tailor regulations to impose the least burden, while being consistent
with obtaining regulatory objectives
 Eliminate unnecessary and reforming requirements that are overly
burdensome, including combining various circulars into one document
 Issued Original Notice of Reforms February 24, 2012
 Issued most recent Notice of Reforms on February 1, 2013
 Issued Super Circular on December 26, 2013
Council on Financial Assistance Reform
 Established pursuant to Chief Financial Officers Act of 1990
 Organization of CFOs from Federal agencies, and Senior
OMB and Treasury Officials
 Work collaboratively to improve financial management,
information, standards, internal controls, and legislation
Super Circular Implementation
Time Line
26, 2013
• OMB Issued 2 CFR
Chapters I, II, Parts 200,
215, 220, 225, & 230
• Uniform Administrative
Requirements, Cost
Principles, and Audit
Requirements for
Federal Awards
• Effective Immediately
26, 2014
• Federal Agencies and
OMB to Issue Final
Guidance to NonFederal Agencies
• Compliance
• Non-Federal Agencies to
Implement New guidance for FYE
Beginning on or after December
26, 2014. Florida Govts FYE
What Was
• A-89
• A-102
• A-110
Cost Principles
• A-21
• A-87
• A-122
Audit Requirements
• A-133
• A-50
What Will Be
Circular Components
 Subpart A – Acronyms and Definitions
 Subpart B – General Provisions
 Subpart C – Pre-Award Federal Requirements and
Contents of Federal Awards
 Subpart D – Post Federal Award Requirements
 Subpart E – Cost Principles
 Subpart F – Audit Requirements
Circular Appendices
 Appendix I – Full Text of Notice of Funding Opportunity
 Appendix II – Contract Provisions for Non-Federal Entity
Contracts Under Federal Awards
 Appendix III – Indirect Cost Procedures Educational
Institutions (IHEs)
 Appendix IV – Cost Identification and Assignment, and
Rate Determination for NFPs
 Appendix V – S&LG, Indian Tribes – Wide Central Service
Cost Allocation Plans
Circular Appendices (Cont.)
 Appendix VI – Public Assistance Cost Allocation Plans
 Appendix VII – S&LG and Indian Tribe Indirect Cost
Appendix VIII – NFPs Exempted from Subpart E – Cost
Appendix IX – Hospital Cost Principles
Appendix X – Data Collection Form
Appendix XI – Compliance Supplement
Major Reforms
Major Reforms
 Elimination of duplicative and conflicting guidance by
combining eight separate circulars (previously
 Focus on performance over compliance for
 Encourage efficient use of Information Technology and
Shared Services
Major Reforms (Cont.)
 Providing for consistent and transparent treatment of
 Limiting allowable costs to make best use of federal
 Setting standard business processes using data
Major Reforms (Cont.)
 Encourage Non-Federal entities to have Family-Friendly
 Strengthening oversight
 Targeting audit requirements on Risk of Waste, Fraud
and Abuse
Single Audit Changes
Single Audit Changes
 Increase audit threshold from $500,000 to $750,000
 Expected to reduce burden on 5,000 Non-Federal
 Maintains coverage of more than 99% of federal grand
funds currently covered
Single Audit Changes (Cont.)
 Increase minimum threshold for Type A programs from
$300,000 to $750,000
 Utilize table format for ease of comprehension
Federal Awards Expended
Type A/B Threshold
$750,000 less than equal to $25 million
Exceed $25 million less than equal to $100
Amt. of Federal Awards times .03
Exceed $100 million less than equal to $1 billion
$3 million
Exceed $1 billion less than equal to $10 billion
Amt. of Federal Awards times .003
Exceed $10 billion less than equal to $20 billion
$30 million
Exceed $20 billion
Amt. of Federal Awards times .0015
Single Audit Changes (Cont.)
 Audit Coverage Rule
 If auditee meets criteria in 200.520 (low risk), all major
programs in aggregate must cover at least 20% of federal
awards. Reduced from 25%.
 If auditee does not meet criteria in 200.520 (low risk), all
major programs in aggregate must cover at least 40% of
federal awards. Reduced from 50%.
 Focus continues to be on highest risk programs
Single Audit Changes (Cont.)
 Auditor Type B Program Analysis
 Identify Type B programs which are high risk using
professional judgment and criteria in 200.519
 Expected to perform risk assessment of Type B programs
that exceed 25% of the Type A threshold (previously stepped
approach) (ex., $750k * .25 = $187,500)
 Continues to encourage utilization of an assessment of risk
that would result in different Type B programs to be audited
over a period of time
Single Audit Changes (Cont.)
 Findings and Questioned Costs
 Must report known or questioned costs that are greater than
$25,000 (increase from $10,000)
 Continued emphasis on findings, including detail with
specifics to allow auditee is to prepare the appropriate
corrective action plan
 Continued emphasis on identification of prior findings,
including updates and details as to why finding is not
corrected, if applicable
Changes to Major Program Determination
 As in A-133, Type A programs will be designated as low
risk if:
 In the most recent period, the program received an
unmodified opinion;
 No material weakness in internal controls were
reported; and
 There were no questioned costs exceeding 5% of
program expenditures
 The program must have been audited as major in at
least one of the tow most recent audit periods
Changes to Major Program Determination
 Reduce the number of Type B programs that must be
tested as major from at least one-half (1/2) to at least
one-fourth (1/4) of the number of low risk Type A
Programs identified. Continues to allow the auditor to
stop the risk assessment process at this point.
Other – Compliance Requirements
 No action taken related to the compliance requirements at this time
 COFAR recommends further public outreach
 Compliance supplement is published as part of a
separate process and, therefore, is included in the
super circular by reference under Appendix XI
Other – Compliance Requirements (Cont.)
 The 2013 and 2014 compliance supplements will
follow A-133
 The 2015 compliance supplement will follow
requirements issued on December 26, 2014
Designation of Agency Officials – 200.513 (5)
 Single Audit Accountable Official – Official responsible
for ensuring the agency is in compliance with all audit
requirements and improving effectiveness of agency’s
use of single audits.
 Single Audit Liaison – Official serving as agency’s
point of contact for the single audit process.
Appointed by the Single Audit Accountable Official.
Keep a Look Out
Monitor Resources
New Data Collection Form
Changes to the Data Collection Form
 Beginning with 2013, the primary audit firm will be
required to provide their EIN in Part I.
 Secondary auditor(s), if applicable, would provide their
EIN on the secondary auditor contact information page
(Part I, Item 8).
 AICPA felt this would improve the ability to conduct
peer reviews. OMB endorsed the idea as part of its
desire to improve audit quality.
Changes to Data Collection Form (Cont.)
 A response is required for each federal award (Y or N)
to the question “Is this award a Federal loan or Federal
loan guarantee?”
 This is expected to help Federal agencies verify that
major programs were determined correctly and
improve oversight of award expenditures.
Changes to Data Collection Form (Cont.)
 Requires standard finding which should match SFQC
numbering. Format: four-digit year, hyphen, and
three-digit sequence number (example - 2013-001)
 Will allow agencies to use software to search
electronic audit reports and show the text of the audit
 Should also improve proficiency of agency staff in
ensuring finding resolutions
Changes to Data Collection Form (Cont.)
 Question related to significant deficiencies, material
weaknesses, and questioned costs have been moved
to Part III, Section 7.
 Identification of the compliance requirement will also
be moved and become part of Part III, Section 7.
 Combining finding information into a single section by
program is intended to allow more detail on each,
which is currently not available.
Changes to Data Collection Form (Cont.)
 Auditors and auditees will be required to certify that
Personally Identifiable Information (“PII”) is not
contained in the reporting package.
 PII: information which can be used to distinguish or
trace an individual’s identity, such as their name, SSN,
 PDF files of audit report submissions must be
unlocked, unencrypted, and at least 85% text
searchable. PDFs not meeting this criteria will be
rejected at the time they are uploaded.
Changes to Data Collection Form (Cont.)
 OMB has granted an extension until March 31,
2014 for reporting packages due to the Clearinghouse if the new form is not available. The
extension is automatic, and there is no approval
required. The extension applies only to single
audits for the fiscal periods ended in 2013.
 See for details
Changes to Data Collection Form (Cont.)
 Please visit
 The 2013 Form SF-SAC is now available