Presenterohioauditor.gov › trainings › 2015.2.6.Uniform.Guidance.Slides.pdf · 2/6/2015 · and submitted by 9/30/15. • If FYE is 6/30/15, then single audit must be done and

4/8/2015

1

Changes to Federal Grants & Single Audits

(A-87, A-21, A-122,A-102, A-110, A-89,

A-133 & A-50)

The New OMBUniform Guidance

2

Presenter

Kelly Berger-Davis

Quality Assurance & Technical Specialist

Center for Audit Excellence

State of Ohio Auditors Office

Federal Grants Specialist

4/8/2015

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3

Agenda

• Background & General Information

• Roadmap of New and Old Requirements

• Specific Changes

• What To Do NOW!!!

4

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5

What is a single audit?• History of A-133:

– “The Single Audit Act of 1984” (Public Law 98-502)established requirements for certain governments thatadminister Federal financial assistance programs.

• Single Audit Act Amendments of 1996 (31 USC 75)

– OMB Circular A-128 (Audits of States, Local Governments),issued in 1985 to help auditors and recipients implement thenew Single Audit Act.

• OMB Circular A-133 (Audits of Institutions of HigherEducation & Other Non-Profit Organizations), issued in1990, where OMB extended the single audit process tonon-profits.

– A-133 requirements amended in 2003 & 2007

– Modified/included in Uniform Guidance in 2014

6

What is a single audit?• History of A-133:

– Each year, OMB issues an updated versionof the “OMB Compliance Supplement” toassist auditors in performing the requiredaudits.

– In addition, the AICPA maintains a guidetitled Government Auditing Standards andCircular A-133 Audits which gives a basicdescription of the procedures auditorsshould perform and the reports they shouldissue for single audits.

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Is A Single Audit Required?

• A-133, Subpart B, Section .200(a) states:– Non-Federal entities that expend $500,000 or

more in a year in Federal awards shall have asingle or program-specific audit conducted forthat year in accordance with the provisions ofthis part.

8

Is A Single Audit Required?

– A-133 requires the auditee to prepare aschedule of expenditures of federalawards.

• A-133 requires the auditor todetermine and provide an opinion on,whether the auditee’s schedule ispresented fairly.

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Is A Single Audit Required?• Per A-133 .235(c)(1):

– The audit shall be completed and the reportingrequired by paragraph (c)(2)or (c)(3) of thissection submitted within the earlier of 30 daysafter receipt of the auditor's report(s), or ninemonths after the end of the audit period.• If FYE is 12/31/14, then single audit must be done

and submitted by 9/30/15.

• If FYE is 6/30/15, then single audit must be doneand submitted by 3/31/16.

10

Is A Single Audit Required?• If an entity fails to have a required single audit, fails to

meet the A-133 deadline, fails to comply withregulations, etc. there are several possibleconsequences a Federal awarding agency or Pass-throughentity may take:

– Impose additional conditions

– Temporarily withhold cash payments

– Disallow all or part of the cost of the activity not incompliance

– Suspend or terminate the Federal award

– Initiate suspension or debarment proceedings

– Withhold further Federal awards for the program

– Other remedies legally available

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Background• President Obama’s Administration launched its

Campaign to Cut Waste and go afterunnecessary, inefficient, or ineffectivegovernment spending on June 13, 2011.

• Also on June 13, 2011 President Obama issuedan Executive Order on Delivering an Efficient,Effective, and Accountable Government.

12

Background• OMB therefore created a Council on Financial Assistance

Reform (COFAR) on October 27, 2011 to providerecommendations to OMB on policies and actionsnecessary to effectively deliver, oversee, and report ongrants and cooperative agreements.– In addition to other items, COFAR was also tasked with

streamlining and simplifying the financial assistanceprocess by eliminating unnecessary regulatory,reporting, and grant-agreement requirements and byincreasing flexibilities for satisfying grant requirements.

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Background

“Advance Notice of Grants Reform”• Issued Feb.

2012

“ProposedOMB Uniform Guidance”

• Issued Jan. 2013

Final “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”

• Issued Dec. 26, 2013

14

Background

Frequently Asked Questions

- Issued 2/12/14

- Updated 8/29/14

- Updated 11/2014

Joint Interim Final Rule “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards”

- Published by each federal agency

- Published 12/19/14

- Effective 12/26/14

- Technical corrections

- 60 day comment period

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General Information

• Where can I find the Uniform Guidance?– http://www.ecfr.gov/cgi-bin/text-

idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl

– http://www.gpo.gov/fdsys/pkg/FR-2014-12-19/pdf/2014-28697.pdf

• Does this apply to me?– Yes – if you receive or audit ANY federal

grants!

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General Information

Impacted by

Uniform Guidance

Federal Agencies

Audit Firms

States

Not-for-ProfitsIndian Tribes

Higher Education

Local Governments

18

General Information• What is the effective date?

– Federal Agencies were required to adopt theguidance and implement the requirements tobe effective by 12/26/14

• All Federal Agencies were directed to implementthe guidance in unison to provide for a smoothtransition for entities that are required to comply

• This occurred in the Joint Interim Final Rulepublished on 12/19/14

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General Information• What is the effective date? (cont’d)

– Non-Federal entities: Administrative requirementsand cost principles apply to new awards and toadditional funding to existing awards (fundingincrements) made after 12/26/14

• This does not retroactively change the terms andconditions for funds a non-Federal entity alreadyreceived prior to that date

• Existing Federal awards will continue to begoverned by the terms and conditions of theFederal award

20


– Non-Federal Entities - Audit Requirements areeffective for fiscal years beginning on or after12/26/14• For fye 12/31 entities, audit requirements would

be effective for the 1/1/15 – 12/31/15 fiscal year

• For fye 6/30 entities, audit requirements wouldbe effective for the 7/1/15 – 6/30/16 fiscal year

• Audit requirements cannot be earlyimplemented

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General Information• Non-Federal Entities:

– 6/30/14, 9/30/14, & 12/31/14 FYE’s – No impact

– 3/31/15, 6/30/15, & 9/30/15 FYE’s –• Uniform Guidance administrative requirements &

cost principles apply to new federal awards andadditional funding to existing awards

• Old (current) A-133 audit requirements in effect

- 12/31/15 FYE and beyond –• New administrative requirements, cost principles

and single audit requirements all apply

22


– OMB clarified in their 8/29/14 FAQ’s &implemented into Final Interim Rule:• Allowing a grace period of 1 full fiscal year after

the effective date for non-federal entities tocomply with the new procurement standards.

• If the grace period is used, the non-federalentity must document this decision in theirinternal procurement policies.

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– OMB clarified in their 8/29/14 FAQ’s:

•Existing negotiated indirect cost rates willremain in place until they are due to be re-negotiated.

24


– OMB clarified in their 8/29/14 FAQ’s:

• Applications that are submitted before12/26/14 for Federal awards to be madeon or after 12/26/14 should be developedin accordance with the UniformGuidance.

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– OMB clarified in their 8/29/14 FAQ’s:• Q: How does the new Uniform Guidance apply to

Federal awards made prior to 12/26/14 when somesubawards are made prior to 12/26/14 and othersare made after 12/26/14?

• A: The effective date of the Uniform Guidance forsubawards is the same as the effective date of thefederal award from which the subaward is made.The requirements for a subaward, no matter whenmade, flow from the requirements of the originalFederal award from the Federal awarding agency.

26


– OMB clarified in their Feb. 2014 FAQ’s:

• We would anticipate that for many of thechanges, non-federal entities with both old andnew awards may make changes to their entity-wide policies (for example to payroll orprocurement systems).

• Non-Federal entities wishing to implement entity-wide system changes to comply with the uniformguidance after the effective date of 12/26/14 willnot be penalized for doing so.

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– OMB clarified in their August 2014 (and updated inNov. 2014) FAQ’s:

• Incremental Funding – The new guidance willapply to new Federal awards made afterDecember 26, 2014 and, if a Federal awardingagency considers its incremental funding actionsto be opportunities to change terms andconditions on previously made awards, the newguidance will apply to that Federal awardingagency’s incremental funding actions also.

28

General Information

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29

General Information• OMB’s purpose is to help reduce the

administrative burden and strengthenoversight of federal funds to reduce therisk of fraud, waste and abuse.– This guidance makes grant requirements

similar across all types of grant recipients andall federal agencies.

– Aims to eliminate duplicative language, and toclarify where grant policies are different acrossentity types.

30

Roadmap of

OLD (current) OMB Circulars

and NEW Uniform Guidance

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31

Roadmap – OLD (current) A-133• Subpart A – General Info

– .100 Purpose

– .105 Definitions

• Subpart B – Audits- .200 Audit requirements

- .205 Basis for determining Federal awards expended

- .210 Subrecipient and vendor determinations

- .215 Relation to other audit requirements

- .220 Frequency of audits

- .225 Sanctions

- .230 Audit costs

- .235 Program-specific audits

32

Roadmap – OLD (current) A-133• Subpart C – Auditees

– .300 Auditee responsibilities

– .305 Auditor selection

– .310 Financial statements

– .315 Audit findings follow-up

– .320 Report submission

• Subpart D – Federal Agencies & Pass-ThroughEntities- .400 Responsibilities

- .405 Management decision

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Roadmap – OLD (current) A-133

• Subpart E – Auditors– .500 Scope of audit

– .505 Audit reporting

– .510 Audit findings

– .515 Audit working papers

– .520 Major program determination

– .525 Criteria for Federal program risk

– .530 Criteria for a low-risk auditee

34

Roadmap – OLD (current) A-87• A-87 (cost principles) was codified in 2 CFR

225:– Appendix A - General Principles for Determining

Allowable Costs

– Appendix B - Selected Items of Cost

– Appendix C - State/Local-Wide Central Service CostAllocation Plans

– Appendix D - Public Assistance Cost AllocationPlans

– Appendix E - State and Local Indirect Cost RateProposals

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Roadmap – OLD (current) A-102• Each federal agency codified A-102

(Administrative Requirements) in their ownsection of the CFR:- US Department of Education – 34 CFR 80

- US Department of Agriculture – 7 CFR 3016

- Complete listing of US Dept’s is available athttp://www.whitehouse.gov/omb/grants_chart

• A-102:– Section 1 – Pre-Award Policies

– Section 2 - Post-Award Policies

– Section 3 – After-The-Grant Policies

36

Roadmap – New Uniform Guidance

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37

Roadmap – New Uniform Guidance

Uniform Guidance

Audit Requirements

Audit Requirements

Cost Principles

Cost Principles

Administrative RequirementsAdministrative Requirements

38

Roadmap – Uniform Guidance• Part II – Major Policy Reforms

– Chapter II – OMB Guidance• Part 200

– Subpart A – 200.0 – 200.99 - Acronyms & Definitions

– Subpart B – 200.100 – 200.113 - General Provisions

» i.e. authorities, effective/applicability date, conflict ofinterest

– Subpart C – 200.200 – 200.211 - Pre-Federal AwardRequirements and Contents of Federal Awards

» i.e. use of grant agreements, cooperativeagreements and contracts, special conditions, publicaccess to federal award information

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39


– Chapter II – OMB Guidance• Part 200 (cont’d)

– Subpart D – 200.301 – 200.345 - Post Federal AwardRequirements

» i.e. standards for financial and programmanagement; property standards; procurementstandards; performance and financial monitoringand reporting; subrecipient monitoring andmanagement; record retention and access;remedies for noncompliance; closeout; post-closeout adjustments and continuingresponsibilities; collection of amounts due

40


– Chapter II – OMB Guidance• Part 200 (cont’d)

– Subpart E – 200.400 – 200.475 - Cost Principles

» Formerly A-87 (A-21 and A-122)

» i.e. general provisions; basic considerations; directand indirect costs; special considerations for localgov’s; general provisions for selected items of cost

– Subpart F – 200.500 – 200.521 - Audit Requirements

» i.e. auditee responsibilities; federal agencyresponsibilities; auditor responsibilities;management decisions

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– Chapter II – OMB Guidance• Part 200 (cont’d) – Appendices:

– Appendix I – Full Text of Notice of Funding Opportunity

– Appendix II – Contract Provisions for Non-Federal EntityContracts Under Federal Awards

– Appendix III - Indirect (F&A) Costs Identification andAssignment, and Rate Determination for Institutions of HigherEducation (IHEs)

– Appendix IV - Indirect (F&A) Costs Identification andAssignment, and Rate Determination for NonprofitOrganizations

42


– Chapter II – OMB Guidance• Part 200 (cont’d) – Appendices:

– Appendix V – State/Local Governmentwide Central ServiceCost Allocation Plans

– Appendix VI - Public Assistance Cost Allocation Plans

– Appendix VII – States and Local Government and IndianTribe Indirect Cost Proposals

– Appendix VIII - Nonprofit Organizations Exempted FromSubpart E—Cost Principles of Part 200

– Appendix IX - Hospital Cost Principles

– Appendix X – Data Collection Form

– Appendix XI - Compliance Supplement

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43

Specific Changes

44

Specific ChangesSubpart A – 200.0 – 200.99 - Acronyms & Definitions

OLD (current) NEW Uniform Guidance Uniform Guidance Section

Circular A-133Compliance Supplement

ComplianceSupplement

200.21

Vendor Contractor 200.23

n/a Personally Identifiable Information (PII)

200.79

n/a Protected Personally Identifiable Information

200.82

n/a Program Income 200.80

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45

Specific Changes

Subpart B – 200.100 – 200.113 - General ProvisionsClarifies that the terms andconditions of federal awards flowdown to subrecipients unless theUniform Grant Guidance or the termsand conditions specifically indicateotherwise.

Federal agencies must not imposeadditional or inconsistentrequirements, except as provided in200.102 and 200.210.

46

Specific ChangesSubpart B – 200.100 – 200.113 - General Provisions

Conflict of Interest

• Federal awarding agencies must establish conflict ofinterest policies for their federal awards

• Non-federal entities must disclose in writing anypotential conflict of interest to the Federal awardingagency (or pass-through entity) in accordance with thefederal awarding agency policy

Mandatory Disclosures

• Non-federal entities must disclose all violations ofFederal criminal law involving fraud, bribery, or gratuityviolations potentially affecting the Federal award

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47

Specific ChangesSubpart C – 200.200 – 200.211 - Pre-Federal AwardRequirements and Contents of Federal Awards

Streamlined guidance to federal agencies on information required to be provided to non-federal entities

Determining the instrument to be

used

- Grant agreements

- Cooperative agree.

- Contract

Standard formats to announce funding

opportunities

Fed’s required to consider risk posed by each applicant

prior to making award

- Financial stability

- Prior performance

- Mgmt. systems

48

Specific ChangesSubpart D – 200.301 – 200.345 - Post Federal Award

Requirements

GAO’s Green BookGAO’s Green Book

COSO’s Internal Control FrameworkCOSO’s Internal Control Framework

Compliance Supplement, Part 6 Internal ControlCompliance Supplement, Part 6 Internal Control

Requires non-Federal entities to have effective internalcontrols over federal awards and mentions 3 best practices:

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49


Requirements (cont’d)Explicit information on what info must be included by a pass-through entity in its subawards at the time subaward is made

• Federal award identification number (FAIN)• All requirements imposed by the pass-through entity• Certain indirect cost information• Access requirements• Terms & conditions surrounding closeout

Pass-through entity’s responsibility to evaluate eachsubrecipients risk and develop appropriate subrecipientmonitoring in response to the assessed risk

50


Requirements (cont’d)

Supplies• Computing devices (<$5K) are

now included as ‘supplies’• But when charging as a direct cost,

must be essential and allocable,(but not solely dedicated) to theperformance of the Federal award

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51



• States continue to follow their own policies

• The new procurement standards for all other non-Federal entities adopt the majority of the languageused from Circular A-102.

• There were some changes though, so carefully reviewto determine the impact on your procurementprocedures.

52



• One new item to review is micro-purchases – foracquisition of supplies or services if aggregate amountdoes not exceed $3,000- The threshold is set by the Federal Acquisition

Regulation, and therefore may change.- The P.O.’s may be awarded without soliciting any

competitive quotations if the non-Federal entityconsiders the cost to be reasonable.

- The non-Federal entity must, to the extent practicable,distribute these purchases among qualified suppliers.

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53

54

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55

Specific ChangesSubpart E – 200.400 – 200.475 - Cost Principles

Time & Effort

• Carefully read andanalyze this section

• Principles based, notrules based anymore –requires judgment

56

• Time & Effort –– Requires entities to comply with a stringent

framework of internal control objectives andrequirements for documenting personnelexpenses.

– However, it gives entities the ability toimplement the internal control systems andbusiness processes that best fit their needs.

Specific Changes

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57

• Time & Effort – Key sentence in 200.430– Standards for Documentation of Personnel

Expenses (1) Charges to Federal awards forsalaries and wages must be based on recordsthat accurately reflect the work performed.

Specific Changes

58

• Time & Effort – Overarching principles:– 200.430(b) - Compensation for employees

engaged in work on Federal awards will beconsidered reasonable to the extent that it isconsistent with that paid for similar work inother activities of the non-Federal entity.

– Compensation must be for an allowablepurpose.

Specific Changes

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59

• OMB clarified in their 8/29/14 FAQ’s:

- Salaries & Wages - Non-Federalentities can develop solutions thatmeet the requirements and reducethe burden related to their currentprocess whether they be incrementalor more significant, includingcomplete elimination of currentsystems.

Specific Changes

60

• Time & Effort

- For a non-Federal entity where therecords do not meet the standardsdescribed in this section, the Federalgovernment may require personnelactivity reports, including prescribedcertifications, or equivalentdocumentation that support the recordsas required in this section.

Specific Changes

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61


Direct Costs

• Clarifies that salaries of administrative andclerical staff may be treated as direct costsif:

• The services are integral to a project oractivity

• The individuals involved can beidentified as specifically with the projector activity

• The costs are included expressly in thebudget or have the prior writtenapproval of the federal awardingagency, AND

• The costs are not recovered as indirectcosts

62


Indirect Costs

• Requires federal agencies toaccept a non-federal entity’snegotiated indirect cost rate

•Existing negotiated indirectcost rates will remain inplace until they are due tobe re-negotiated.

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Indirect Costs

• Any non-Federal entity that has a currentfederally negotiated indirect cost rate mayapply for a one-time extension of the ratesin that agreement for a period of up to fouryears.

• If an extension is granted the non-Federalentity may not request a rate review untilthe extension period ends.

• At the end of the 4-year extension, the non-Federal entity must re-apply to negotiate arate. Subsequent one-time extensions (upto four years) are permitted if arenegotiation is completed between eachextension request.

64


Indirect Costs

• Provides for a de minimisindirect cost rate of 10% ofmodified total direct costs forentities that have never had anegotiated indirect cost rate.

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65


Indirect Costs

•Equipment and othercapital expendituresare unallowable asindirect costs.

66

• Indirect Cost clarifications in FAQ’s:– Non-Federal entities that are able to allocate and

charge 100% of their costs directly may continueto do so

– Claiming reimbursement for indirect costs isnever mandatory

– Entities will not be forced to establish an indirectcost rate if they feel it is not necessary

Specific Changes

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67

• Indirect Cost clarifications in FAQ’s:– It also is not permissible for pass-through entities

to force or entice a proposed subrecipient withouta negotiated rate to accept less than the deminimis rate.

– The 10% de minimis rate is not available toentities who receive more than $35 million indirect Federal funding

Specific Changes

68


Prior Approval

• Provides a list of circumstances under whichentities need to seek prior approval from theFederal awarding agency including:

• Pre-award costs• Additions to program income or the use of

program income to meet a cost sharing ormatching requirement

• Changes in scope or objectives of aproject/program

• Subcontract of work under the award notpreviously approved

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Allowable Costs

•Clarifies guidance forcertain allowable costs:

• Employeehealth/welfare costs

• Travel Costs

70


• Encouraging Non-Federal Entities to Have Family-Friendly Policies• “Travel costs” section provides that temporary dependent

care costs above and beyond regular dependent care thatdirectly results from travel to conferences is allowableprovided that:⎯ The costs are a direct result of the individuals travel for

the federal award;⎯ The costs are consistent with the non-Federal entity’s

documented travel policy for all entity travel;⎯ Are only temporary during the travel period.

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71


• Added/clarified guidance on:• Mass severance - federal agency or cog

approval required• Excessive severance pay - unallowable

72

Specific ChangesSubpart F – 200.500 – 200.521 - Audit Requirements

Maintains oversight on

over 99.7% of the dollars currently subject to

Single Audit

Reduces audit burden for

approximately 5,000 entities

Increase in Single Audit Threshold

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73

Specific Changes38

18

2832

2380

2357

2335

1830

1663

1458

1347

1141

1112

1035

1007

986

962

928

905

861

754

749

682

677

673

669

647

642

623

589

565

533

526

507

469

465

394

390

388

388

328

326

300

300

290

278

273

255

249

226

203

190

174

100

21 13 10 8

CA

NY

OH

PA

TX IL MI

FL

MA

NJ

MN

MO

WI

WA

NC IN GA

VA

KY

LA

OK

TN

AL

AZ IA AR

OR

MD

CO

MS

SC

CT

DC

KS

WV

NE

ME

NM

MT

AK

PR

VT

SD

NH

UT ID RI

ND

NV HI

WY

DE VI

GU

MP

FM

NUMBER OF SINGLE AUDITS BY STATE

74

Specific Changes

$138

,400

,762

,620

$134

,670

,138

,495

$101

,373

,205

,414

$98,

777,

195,

641

$50,

422,

481,

747

$46,

687,

356,

248

$42,

388,

942,

591

$41,

497,

029,

671

$35,

634,

147,

779

$35,

602,

716,

862

$33,

024,

997,

583

$30,

665,

337,

847

$30,

008,

272,

274

$23,

794,

530,

573

$22,

560,

689,

495

$22,

538,

873,

999

$21,

414,

592,

447

$21,

158,

549,

843

$20,

806,

415,

872

$19,

771,

240,

617

$19,

403,

729,

257

$18,

145,

911,

284

$16,

039,

666,

956

$15,

404,

054,

689

$15,

059,

606,

561

$14,

879,

486,

221

$13,

752,

729,

752

$13,

458,

844,

907

$13,

031,

639,

546

$13,

013,

321,

660

$12,

877,

783,

924

$12,

243,

384,

286

$11,

289,

990,

710

$10,

590,

752,

025

$9,1

06,0

18,0

84

$8,6

93,8

75,7

03

$7,6

05,5

33,8

96

$7,3

98,6

55,2

81

$7,2

70,8

48,1

55

$7,0

55,6

61,4

87

$6,5

24,4

93,4

40

$6,2

85,0

28,1

07

$5,9

56,6

90,8

70

$5,6

39,3

86,4

91

$5,4

58,5

05,6

83

$5,4

15,2

38,0

50

$4,7

26,1

07,5

55

$4,5

71,9

05,3

06

$3,7

76,4

06,8

18

$3,0

38,6

06,0

74

$2,2

52,5

90,3

91

$1,1

61,8

58,3

85

$549

,725

,805

$404

,001

,061

$161

,852

,277

$161

,182

,594

NY

CA

TX

PA

FL IL

OH

NC MI

MA

NJ

TN

GA

MO

WA

VA

MD

LA

AZ IN WI

MN

CO

KY

OR

AL

SC

DC

OK IA CT

MS

AR

NM

PR

UT

KS

WV

ND

NV RI

ID ME

NE

NH

AK

VT HI

SD

DE

WY

MT

GU VI

MP

FM

TOTAL DOLLARS COVERED BY SINGLE AUDITS FOR EACH STATE

Total

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75

Specific Changes87

.79%

86.6

9%

86.8

9%

85.9

1%

85.6

1%

83.9

9%

83.5

8% 86.6

9%

87.8

2%

86.8

7%

84.2

2% 88.0

3%

89.0

9%

82.4

2%

83.0

2%

85.8

8%

86.4

1%

88.5

0%

84.9

1%

83.9

5% 87.5

2%

85.6

5%

83.4

6%

80.0

6% 84.7

4%

86.2

0%

86.4

2%

77.5

9%

84.0

7% 88.0

2%

86.8

7%

87.1

8%

86.9

9%

73.9

8%

86.8

6%

83.7

6%

82.4

7%

77.4

4%

93.0

0%

81.7

1%

81.6

0%

83.7

9%

80.3

3%

86.8

1%

81.6

5% 86.2

7%

86.7

5%

82.7

4%

79.8

0%

80.0

0%

80.4

6%

80.0

0%

85.7

1%

92.3

1%

90.0

0%

87.5

0%

12.2

1%

13.3

1%

13.1

1%

14.0

9%

14.3

9%

16.0

1%

16.4

2%

13.3

1%

12.1

8%

13.1

3%

15.7

8%

11.9

7%

10.9

1%

17.5

8%

16.9

8%

14.1

2%

13.5

9%

11.5

0% 15.0

9%

16.0

5%

12.4

8%

14.3

5%

16.5

4% 19.9

4%

15.2

6%

13.8

0%

13.5

8%

22.4

1%

15.9

3%

11.9

8%

13.1

3%

12.8

2%

13.0

1%

26.0

2%

13.1

4% 16.2

4%

17.5

3% 22.5

6%

7.00

%

18.2

9%

18.4

0%

16.2

1% 19.6

7%

13.1

9% 18.3

5%

13.7

3%

13.2

5% 17.2

6%

20.2

0%

20.0

0%

19.5

4%

20.0

0%

14.2

9%

7.69

%

10.0

0%

12.5

0%

CA

NY

OH

PA

TX IL MI

FL

MA

MN

NJ

WA

NC

MO

WI

IN GA

VA

LA

KY

AL

AZ

TN

OK

AR

OR

MD IA CO

SC

MS

CT

DC

KS

NM

WV

ME

NE

PR

MT

AK

SD

VT

UT

NH ID RI

ND

NV HI

WY

DE VI

GU

MP

FM

Over

Under

76

Specific Changes

99.8

3%

99.7

9%

99.7

9%

99.7

9%

99.7

6%

99.6

2%

99.5

4%

99.8

4%

99.7

1%

99.5

2%

99.6

7%

99.7

7%

99.7

5%

99.5

3%

99.6

7%

99.7

3%

99.7

7%

99.6

7%

99.7

1%

99.5

9%

99.4

6%

99.5

0%

99.6

5%

99.5

1%

99.6

4%

99.6

4%

99.7

2%

99.7

1%

99.3

6%

99.3

1%

99.6

8%

99.6

5%

99.4

5%

99.7

0%

99.8

5%

99.7

4%

99.0

4%

99.4

7%

99.6

8%

99.6

4%

99.6

7%

99.6

4%

99.2

9%

99.0

4%

99.4

2%

99.3

1%

99.2

2%

99.4

9%

99.2

4%

99.5

8%

99.1

0%

96.8

4%

99.8

8%

99.5

6%

99.5

6%

99.5

6%

0.17

%

0.21

%

0.21

%

0.21

%

0.24

%

0.38

%

0.46

%

0.16

%

0.29

%

0.48

%

0.33

%

0.23

%

0.25

%

0.47

%

0.33

%

0.27

%

0.23

%

0.33

%

0.29

%

0.41

%

0.54

%

0.50

%

0.35

%

0.49

%

0.36

%

0.36

%

0.28

%

0.29

%

0.64

%

0.69

%

0.32

%

0.35

%

0.55

%

0.30

%

0.15

%

0.26

%

0.96

%

0.53

%

0.32

%

0.36

%

0.33

%

0.36

%

0.71

%

0.96

%

0.58

%

0.69

%

0.78

%

0.51

%

0.76

%

0.42

%

0.90

%

3.16

%

0.12

%

0.44

%

0.44

%

0.44

%

NY

CA

TX

PA

FL IL

OH

NC

MA

MI

NJ

TN

GA

MO

WA

VA

MD

LA

AZ IN WI

MN

CO

KY

OR

AL

SC

DC

OK IA CT

MS

AR

NM

PR

UT

KS

WV

ND

NV RI

ID ME

NE

NH

AK

VT HI

SD

DE

WY

MT

GU VI

MP

FM

Over

Under

4/8/2015

39

77


Explicitly stated that the Federal Audit Clearinghouseis the authoritative source for single audit reports

Audit reports will be publically available on the FAC website

Federal agencies, pass-through entities, and others interested in obtaining audit reports must obtain it by

accessing the clearinghouse, rather than requesting it from the non-federal entity

78


OLD (current)

$10,000

Uniform Guidance

$25,000

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79


• 1 new criteria: In the prior 2 audit periods, the auditor didnot report a substantial doubt about the auditee’s abilityto continue as a going concern.

• 1 modified criteria: In the prior 2 audit periods, theauditor’s opinion on whether the financial statementswere prepared in accordance with GAAP, or a basis ofaccounting required by state law, and the auditor’s in-relation-to opinion on the SEFA were unmodified.

80

Specific Changes

• OAC 117-2-03 state Pursuant to section 117.38of the Revised Code, all local public offices mustfile an annual financial report. Such reports shallbe filed in accordance with the following:

– (B) All counties, cities and school districts,including educational service centers andcommunity schools, shall file annualfinancial reports which are prepared usinggenerally accepted accounting principles

4/8/2015

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81

Specific Changes– (C) Local public offices that use the "Uniform

Accounting Network" shall file their annual financialreports in accordance with the guidelines establishedby the "Uniform Accounting Network."

– (D) All other local public offices who do not preparetheir annual reports using generally acceptedaccounting principles shall file their annual financialreports on the forms provided by the auditor of state. Ifthe auditor of state has not prescribed an annualfinancial reporting format for a type of local publicoffice, those public offices shall file financial statementsannually with the auditor of state, using the formatused by the local public office.

82

Specific ChangesAOS interprets sections (C) & (D) to mean thatsince there is no requirement in Ohio lawprohibiting these entities from filing GAAPstatements, then auditors can only considerthese entity types for low-risk auditee status forsingle audit purposes if they file GAAP financialstatements.

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83


Not Low-Risk Auditee

Old (Current)

50%

New

40%

Low-Risk AuditeeOld (Current)

25%

New

20%

84

Specific Changes

$300,000 (current / OLD)

$750,000 (NEW)

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43

85


• High-Risk Type A Program – change- A-133 (current/OLD) criteria: In the most recent audit

period, did the program have ANY audit findings.

- Uniform Guidance (NEW) criteria – “high risk” auditfinding:

- Modified opinion on the program

- Material weakness in internal control

- Known or likely QC exceeding 5% of total programexpenditures

- Auditor no longer considers inherent risk of program

86


• High-Risk Type B Program – change- Current (OLD) – There were 2 Type B risk

assessment options.

- Uniform Guidance (NEW) – No longer 2 options:• Perform risk assessments on Type B programs until

high-risk Type B programs have been identifies up to atleast 1/4th of number of low-risk Type A programs

• Risk assessment on Type B programs not required forprograms that do not exceed 25% of Type A threshold

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87


• Loans & Loan Guarantees – modified clusterguidance- A cluster of programs is treated as 1 program in

determining Type A programs.

- For the purpose of excluding large loan programs for therevised Type A threshold calculation, a cluster ofprograms is not considered a loan program if theindividual loan programs within the cluster comprise lessthan 50% of the total expenditures of the cluster.

88

Specific Changes

Subpart F – 200.500 – 200.521 - Audit Requirements

• For loan & loan guarantees, now required to identifyin the notes to the SEFA loan balances outstandingat the end of the audit period- This is in addition to including the total federal awards

expended for loan or loan guarantees in the SEFA

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89


• SEFA notes required to include whether or not non-federal entity elected to use the 10% de minimis costrate

• SEFA is now required to include the total amountprovided to subrecipients from each Federalprogram- Previously this was only required “to the extent

practical”

• Provide the total for each cluster of programs

90


• Audit Finding Changes:• Requires identification of whether audit finding is a

repeat from the immediately prior audit, and if so, theprior year audit finding number.

• Audit finding numbers must be in the formatprescribed by the DCF (ie. 2014-001; NOT 2014-01,or 2014-1)

• Indicate whether sampling was a statistically validsample

• Requires that QC’s be identified by CFDA number &applicable award number.

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91


• Summary Schedule of Prior Audit Findings –this is NOT a change

- Schedule must be prepared by Auditee (notauditor)

- Auditor audits the schedule

- If the auditee materially misrepresents thestatus of any prior audit finding, it would bereported as an audit finding in the Schedule ofFindings

92


• Corrective Action Plan (CAP)- CAP to be separate document from auditor’s findings

- Must include GAGAS findings

- Same for summary schedule of prior audit findings

• Possible Future Change:- Included language to allow for future combining of the

SEFA and the DCF

- FAQ 200.110-15 also stated that they are exploring waysto combine the SEFA with the DCF to reduce duplicationand improve accuracy of FAC data.

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93


• Auditors and auditees must ensure reports do notinclude protected personally identifiableinformation (PII) and sign a statement stating suchon the DCF.

94


What is Protected PII?A persons first name, or first initial & last name in combination with:

SS

#

Pas

spor

t #

Cle

aran

ces

Ban

k N

umbe

rs

Bio

met

rics

Dat

e an

d P

lace

of

Birt

h

Mot

hers

Mai

den

Nam

e

Crim

inal

, Med

ical

, &

Fin

anci

al

Rec

ords

Edu

catio

nal

Tra

nscr

ipts

Cre

dit C

ard

#

This does NOT include PII that is required by law to be disclosed.

4/8/2015

48

95

Specific Changes

• Ohio Revised code Sections117.28, 9.24(H)(3), & 9.24(D)requires AOS to:- Issue FFR’s in certain circumstances

- Maintain an unresolved FFR database,accessible to the public

96

Specific Changes• Section 200.509(b)

• For Nonfederal entities - if an auditor preparesan auditee’s indirect cost proposal or costallocation plan (CAP), that same auditor maynot be hired to perform its single audit if theauditee’s indirect costs recovered during theprior year exceeded $1 million.

4/8/2015

49

97

Specific Changes

Best Practices

Recommended Approaches

“Should”

Requirements

“Must”

98

Specific Changes• §200.303 Internal controls.

• The non-Federal entity must:

– (a) Establish and maintain effective internal control over theFederal award that provides reasonable assurance that thenon-Federal entity is managing the Federal award incompliance with Federal statutes, regulations, and the termsand conditions of the Federal award. These internal controlsshould be in compliance with guidance in “Standards forInternal Control in the Federal Government” [Green Book]issued by the Comptroller General of the United States or the“Internal Control Integrated Framework”, issued by theCommittee of Sponsoring Organizations of the TreadwayCommission (COSO).

4/8/2015

50

99

Specific Changes• §200.303 Internal controls.

• The non-Federal entity must:

– (b) Comply with Federal statutes, regulations, and the termsand conditions of the Federal awards.

– (c) Evaluate and monitor the non-Federal entity's compliancewith statute, regulations and the terms and conditions ofFederal awards.

– (d) Take prompt action when instances of noncompliance areidentified including noncompliance identified in audit findings.

– (e) Take reasonable measures to safeguard protectedpersonally identifiable information and other information theFederal awarding agency or pass-through entity designates assensitive or the non-Federal entity considers sensitiveconsistent with applicable Federal, state and local lawsregarding privacy and obligations of confidentiality.

100

Specific Changes• Data Collection Form (DCF)

– While not in the Uniform Guidance,reminder that beginning January 2, 2015, allFy 14 and later audit submissions arerequired to be:

• At least 85% text searchable

• Unlocked & unencrypted–FAC has recently added a new pdf validator to

‘test upload’ your audit report prior to the actualupload to check whether it will pass theunlocked/unencrypted requirements.

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101

Specific Changes• OMB clarified in their 8/29/14 FAQ’s:

- For incremental funding actions that aresubject to the new Uniform Guidance, non-federal entities are not obligated to segregateor otherwise track old funds and new funds,but may do so at their discretion.

- See FAQ 200.110-7 if you run into thissituation for further guidance.

102

Specific Changes• OMB clarified in their 8/29/14 FAQ’s:

- 2 CFR 225 (A-87) has been removed from theCFR (http://www.gpo.gov/fdsys/ )

- However, the original circular is available athttp://www.whitehouse.gov/omb/grants_circularsfor grants that still fall under it

4/8/2015

52

103

Specific Changes

Single audit reporting deadline

(currently 9 months)

Reducing # of compliance

requirements in

Compliance Supplement

Changes NOTMade

104

4/8/2015

53

105

What To Do NOW!!!• Review the details of 2 CFR Chapter II, Part 200

that are applicable to your entity/entities you audit

• Review the specific federal agency exceptions tothe Uniform Guidance

• Visit https://cfo.gov/cofar/ for:- Link to COFAR’s 12/20/13 webcast announcing release

- Link to COFAR’s 1/27/14 webcast on significant updates

- Link to COFAR’s 10/2/14 webcast on implementation

- COFAR’s FAQ’s - 2/12/14 & 8/29/14 & 11/2014 (all rolledinto 1 document)

- Federal agency exceptions to Uniform Guidance

106

What To Do NOW!!!• Review OMB Supporting Documents

http://www.whitehouse.gov/omb/grants_docs/- Crosswalk from Predominant Source in

Existing Guidance

- Crosswalk to Predominant Source inExisting Guidance

- Cost Principles Text Comparison

- Audit Requirements Text Comparison

- Definitions Text Comparison

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107

What To Do NOW!!!• Ensure an appropriate understanding of effective

dates

• Obtain an understanding of the new requirements

• Develop a plan to become compliant

• Focus on areas of most significance first (time &effort, indirect costs, procurement, internal control,subrecipient monitoring)

• Begin process to update local policies andregulations on federal grants and internal controls

108

Changes to Federal Grants & Single Audits

Center For Audit Excellence88 East Broad Street

Columbus, Ohio 43215

Kelly Berger-Davis

[email protected]

4/8/2015

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109

88E.BroadSt.Columbus,Ohio43215

Phone:(800)282‐0370Fax:(614)466‐4490E‐mail:[email protected]

www.OhioAuditor.gov