Transcript Slide 1

Single Audit Update
Gilbert Tran
Executive Office of the President
Office of Management and Budget
1
Agenda




The Big Grant Picture
Single Audit
Requirements
National Single Audit
Sampling Project
Federal Single Audit
Workgroups
2
“…You know, we spend a lot of time and a lot of effort collecting your money,
and we should show the same amount of effort in reporting how we spend it.
Every year, the federal government issues more than $400 billion in grants,
and more than $300 billion in contracts to corporations, associations, and state
and local governments. Taxpayers have a right to know where that money
is going, and you have a right to know whether or not you're getting
value for your money…”
President Bush, signing the Federal Funding Accountability and Transparency
3
Act of 2006, September 26, 2006.
The Garden of Grants
Grant
Requirements
FFATA
S.2590
PART
OMB A-123
SAS 112
GRANTS
Single Audits
GAO
PL 106=-1-7
Grants.gov
GMLoB
IPIA 2002
4
Distribution of Federal Grants
States
8%
Locals
7%
4%
Universities
1%
Non-Profits
80%
Tribes, ForProfit, Others
2009 US BUDGET - $3.1 TRILLION GRANTS- $500 BILLION
5
Steep Rise in Federal Grants
In Billion of $
450
400
350
300
250
200
150
$450B
$200B
$91B
100
$24B
50 $7B
0
1960 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006
CFDA lists more than 1000 Federal grant programs
6
FY 2006 Budgeted Grants to State & Local
Governments by Agency
I’m DHHS, Hear
$$$$ #Programs me roar, RAA!!
Department of Agriculture …………………………………… $25.7
Department of Commerce ......................................
0.6
Department of Education ........................................ 40.1
Department of Energy ............................................. 0.3
Department of Health and Human Services .....256.6
Department of Homeland Security……………………………. .9.1
Department of Housing and Urban Development .........34.8
Department of the Interior ........................................ 4.1
Department of Justice ................................................ 3.8
Department of Labor ................................................. 7.1
Department of Transportation .................................... 46.8
Department of the Treasury ....................................... 0.3
Department of Veterans Affairs .................................
0.3
Environmental Protection Agency ................................ 3.8
Other agencies ......................................................... 2.2
68
40
124
4
169
32
31
66
60
22
20
1
6
44
--
Total .....................................................................435.7 Billion
7
TOP 10 FEDERAL PROGRAMS
(IN $ BILLION)










Medicaid
Highway Planning & Const.
TANF - HHS
Section 8 Housing Choice Vouchers
Title I –Education
Special Education to States
Head Start
National School Lunch Program
Foster Care
Nutrition Program for WIC
177.2
35.8
19.2
14.7
12.3
10.1
6.8
6.8
4.7
4.6
Total: $292.2 Billion
8
OMB Grants Management Circulars
 Cost Principles (Gilbert Tran)



A-21- Colleges & Universities
A-87- Governments
A-122- Non-Profits
 Administrative Requirements (Marguerite
$500 B
Pridgen)


What’s the LAW ?
A-102- Governments
A-110- Everyone Else
 Audit Requirements (Gilbert Tran)

A-133- Everyone
 Compliance Supplement
9
National Single Audit
Sampling Project
Final Report Issued June 2007
http://www.ignet.gov/pande/audit/NatSamProjRptFINAL2.pdf
10
Sample Design
 208 single audits from universe of 38,523 audits successfully
submitted to clearinghouse April 1, 2003 to March 31, 2004
 96 of 208 were from 852 audits of entities that expended
Federal Awards of 50 million or more (Stratum I)
 112 of 208 were from 37,671 entities that expended less than
50 million in Federal Awards (Stratum II)
11
Classification of Audits
 Acceptable
 Limited reliability because of significant deficiencies
 Unacceptable
12
Summary Results
 Acceptable - 115 (49%)

Large – 61 (63.5%) , Smaller – 54 (48.2%)
 Limited reliability because of significant deficiencies – 30
(16%)
 Large – 12 (12.5%), Smaller – 18 (16.1%)
 Unacceptable – 63 (35%)

Large – 23 (24%), Smaller – 40 (35.7%)
 Fed Awards Reported $53/57 billion (93%) Acceptable
13
Deficiencies
 Audit Documentation did not evidence auditor understanding of the 5
elements of internal control and testing of internal controls for many or
all applicable compliance requirements. However, documentation did
evidence that most required compliance testing was performed
 Audit documentation did not evidence internal control testing and/or
compliance testing for more than a few compliance requirements, or
did not explain why they were not applicable for the auditee
 Audit documentation did not evidence that audit work relating to the
SEFA was adequately performed, or did not evidence that audit
programs were used for auditing internal controls, compliance and/or
the SEFA
14
Single Audit Improvement Process
PCIE Recommendations
Better Protection of Federal $
Better Auditors
Federal Workgroups
Recommended Changes
15
Single Audit Improvement Process
Training
System
Support
Good
Auditor
Good Rules
Guidance
Incentives
16
Federal Workgroups
 Good Rules & Guidance



Revisions to A-133 and AICPA Guidelines to report audit
findings
Revisions to A-133, AICPA Audit Guide and OMB
Compliance Supplement to document the required
compliance testing
Revisions to A-133 and AICPA for audit testing and
sampling
 Training

Revisions to A-133 to require SA training. Development of
training curriculum
17
Federal Workgroups

Incentives



Review of suspension & debarment process and identify
alternative methods to address unacceptable audits
Coordination with other SA constituencies for sanctions
and punitive actions for substandard audits. Revisions to
A-133 to any proposed sanction language
System Support


Coordination with PCIE to issue uniform standards on
QCRs
The New and Improved Single Audit Process
18
“INVENT THE FUTURE”
19