Tuesday, May 5 | Columbia - MOCPA home · 1 2015 Governmental Audit Quality Center (GAQC) Annual...

Tuesday, May 5 | Columbia

Missouri Society of Certified Public Accountants

WORKBOOK

SCHOOL AUDIT CONFERENCE | MAY 5 | HOLIDAY INN SELECT EXECUTIVE CENTER | COLUMBIA, MO

Agenda

8:00 a.m. Registration and Continental Breakfast 8:30 a.m. GAQC Update:

Upcoming Changes in Standards and Avoiding Governmental Audit Quality Issues Michael G. Wolfe, CPA, Partner, BKD, LLP, Springfield 10:10 a.m. Refreshment Break 10:20 a.m. Federal Programs Tiered Monitoring Pat Kaiser and Angie Nickell, DESE, Jefferson City 11:30 a.m. Pension Disclosures Lori Woratzeck, CPA, CFO, and Anita Brand, CPA, The Public School and Education Employee Retirement Systems of Missouri, Jefferson City, MO 12:00 p.m. Networking Lunch 12:45‐1:35 Breakout Sessions A (please choose one. A2 runs until 2:35)

A1 Attendance Reporting and Verification Jennifer Jordan and Tammy Lehman, DESE, Jefferson City

A2 Changes to Single Audits and Federal Grants (continues through B2) Katherine Girgis, RubinBrown LLP, Overland Park and Brandi Lawyer, CPA, RubinBrown LLP, St. Louis 1:45 – 2:35 Breakout Sessions B (please choose one. Note that B2 is a continuation of A2)

B1 Desk Reviews Toni Wade, CPA, DESE, Jefferson City

B2 Changes to Single Audits and Federal Grants ‐ Continuation of A2 Katherine Girgis, RubinBrown LLP, Overland Park and Brandi Lawyer, CPA, RubinBrown LLP, St. Louis 2:45 – 3:35 Breakout Sessions C (please choose 1 session)

C1 Food and Nutrition Services Update Karen Wooton, DESE, Jefferson City

C2 Fraud & the Bottom Line Nate Bibens, Assistant Vice President, Treasury Management Officer, UMB Bank, Springfield

3:45 p.m. New OMNI Regulations for Auditors Toni Wade, DESE, Jefferson City 4:35 p.m. Adjournment

SCHOOL AUDIT CONFERENCE | MAY 9 | HOLIDAY INN SELECT EXECUTIVE CENTER | COLUMBIA, MO

Speakers

Christina Acton, CPA ‐ Christina Acton is an audit supervisor at Schowalter & Jabouri, P.C. in St. Louis. She conducts internal and external audit engagements for governmental, nonprofit, and public organizations and works with clients ranging from small and mid‐sized organizations to large corporations. Anita Brand, CPA ‐ Anita Brand is the director of investment accounting and operations for the PSRS/PEERS in Jefferson City where she is primarily responsible for their financial reporting and operations. Nathan Croll, CPA ‐ Nathan Croll is a manager in RubinBrown LLP’s Business Advisory Services Group in St. Louis. He is responsible for leading engagements that help clients manage business operations and assess control environment risks. James Grimes, CIA, CFE ‐ James Grimes is a manager in RubinBrown LLP’s business advisory services group in St. Louis. He specializes in Sarbanes‐Oxley requirements, internal accounting controls development and execution, and internal audit assisting companies in developing and executing their internal audit plan within outsourcing and co‐sourcing capacity. Jennifer Jenkins, CPA ‐ Jennifer Jenkins is a senior auditor at Schowalter & Jabouri, P.C. in St. Louis. She conducts internal and external audit engagements for governmental, nonprofit, and public organizations and works with clients ranging from small and mid‐sized organizations to large corporations. Jennifer Jordan ‐ Jennifer Jordan is the assistant director of school finance for the DESE in Jefferson City. Pat Kaiser ‐ Pat Kaiser serves as the director of the DESE’s Office of Financial and Administrative Services in Jefferson City. She oversees fiscal requirements for programs under No Child Left Behind. Tammy Lehmen ‐ Tammy Lehmen is a school finance consultant with the DESE in Jefferson City where she focuses on the Basic Formula, Classroom Trust Fund, Small Schools Grant, and Prop C payments and ensuring the data used in those calculations are reasonable and correct. Angie Nickell ‐ Angie Nickell serves as the director for special education finance with the DESE in Jefferson City. She supervises and coordinates the financial functions of the Office of Special Education and oversees payment of state and federal funds to Local Education Agencies (LEAs) for services provided to students with disabilities. Tim Rooney, CPA ‐ Tim Rooney is the chief financial officer for the Rockwood School District in St. Louis. He has worked as a school district administrator in accounting and finance including time as an auditor in the Missouri State Auditor’s office and the St. Joseph, Excelsior Springs, and Shawnee Mission, Kansas school districts. Daniel Steinbruegge, CPA ‐ Daniel Steinbruegge serves as the director of finance for the Rockwood School District in St. Louis. Prior to Rockwood, he was in public accounting auditing school districts and also an accounting supervisor. Toni Wade ‐ Toni Wade is the accounting audit analyst in the division of financial and administrative services of the DESE in Jefferson City. Previously, she worked for the Missouri State Auditor’s Office. Ted Williamson, CPA ‐ Ted Williamson is a partner in RubinBrown LLP's assurance services group in St. Louis where he primarily focuses on clients in the public sector, not‐for‐profit, and college and university sectors. Karen Wooton ‐ Karen Wooton is the school food services section coordinator for the DESE in Jefferson City. Lori Woratzeck, CPA ‐ Lori Woratzeck is the chief financial officer for PSRS/PEERS in Jefferson City where she oversees all accounting and financial reporting functions of the systems. She has also held accounting management positions in several school districts including the Mexico (MO) Public Schools, the Kansas City Missouri School District, Denver Public Schools, and Jefferson County (Colorado) Public Schools.

1

2015 Governmental Audit Quality Center (GAQC)Annual Update

May 5 2015May 5, 2015Originally Broadcast April 28, 2015Reproduced with permission from the AICPA

Program Objectives

This Webcast will:• Provide information to help you plan your 2015 auditsProvide information to help you plan your 2015 audits

• Provide a high-level briefing on the activities of standard-setting bodies and regulators

• Discuss common quality issues and tips for avoiding them

• Increase awareness of the resources to help you maintain or improve your audit quality

Governmental Audit Quality Center

This Webcast will NOT:• Provide in-depth discussion on every topic area since

it is intended to build awareness of key topics and tips for where to look for more guidance

2

2

Today’s Speaker

Mike Wolfe, CPA Partner

BKD, LLP, Springfield, MOMember, GAQC Executive Committee

Governmental Audit Quality Center 3

GAQC Update

3

GAQC Update

Approximately 1,825 member firms representing 50 states, District of Columbia and Puerto Rico

26 State Audit Organizations (SAO) have joined to date• AK, AR, CA, DE, FL, GA, IA, ID, IL, LA, MA, MI, MN, ND, NH,

NM, OH, OK, OR, PA, RI, SD, TX, UT, VA, WV

Member Firm Coverage in the Federal Audit


e be Co e age t e ede a ud tClearinghouse Database• 91% of federal dollars• 61% of number of audits

5

Member Value and Improving Quality

Technical Technical guidanceguidanceTechnical Technical guidanceguidance

GAQCGAQCGAQCGAQC

CommunicationCommunication

(Alerts and Web (Alerts and Web events) events)

CommunicationCommunication

(Alerts and Web (Alerts and Web events) events)

Resources Resources and Practice and Practice

AidsAids

Resources Resources and Practice and Practice

AidsAids


GAQCGAQC

MembersMembers

GAQCGAQC

MembersMembersAdvocacyAdvocacyAdvocacyAdvocacy GAQC Web GAQC Web

sitesiteGAQC Web GAQC Web

sitesite

6

4

T h i l U d tTechnical Update

Technical Update Overview

Current Environment

AICPA• Auditing Standards Board

State and Local Governments (SLG)• Governmental Accounting

Standards Board (GASB) • Ethics

• Peer Review

Government Accountability Office (GAO)

Single Audits• Uniform Guidance

( )matters

• AICPA A&A Guide

Not-for-Profit Organizations (NFP)• Financial Accounting

Standards Board (FASB)


• 2015 Compliance Supplement

• AICPA Audit Guide

For-Profit Compliance Audits

matters

• AICPA A&A Guide

Common deficiencies, best practices, tips, resources!

8

5

Current Environment – Setting the Stage –Financial Statement Audits

Consider effect of current environment on your financial statement audits• Continued fiscal stress (even though economy coming back, not

fast enough for some entities!)

• Client revenue recognition issues?

• Public pension challenges (funding issues, new GASB standards)

• FASB developments for NFPs

• SEC interest in municipal issuers and related disclosure


SEC interest in municipal issuers and related disclosure

• Don’t ignore fraud risk

• State and local government financial statement audits are an emphasis area in peer review

9

Current Environment – Setting the Stage –Single Audits

Consider effect of current environment on your single audits• Challenging implementation of the Uniform AdministrativeChallenging implementation of the Uniform Administrative

Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (UG or Uniform Guidance)

- Timing complexities and transitional issues

- Uncertainty in some areas (e.g., designing/updating controls, agency differences, etc.)

• Future OMB study of audit quality required in 2018 by UG

K thi i i d UG i l t d ill di


- Keep this in mind as UG implemented; will discuss more later

• Other regulator scrutiny

- Quality Control Reviews (QCRs) and Desk Reviews

• Single audits are a “must select” area in peer review

10

6

AICPA - Auditing Standards Board (ASB)

Group Audits - Can still be challenging• Two prior GAQC archived Web events still relevant; (1) Group Audits: A

Look Back One Year Later and Lessons Learned, and (2) Understanding the Potential Impacts of the New Group Audits SAS on Your Governmental and Not-For-Profit Audit Engagements

SSARS No. 21, Statements on Standards for Accounting and Review Services: Clarification and Recodification (or see Executive Summary)• Effective for periods ending on or after December 15, 2015 with early

implementation is permitted

GASB Pension Related Interpretations


• Interpretation No. 2, "Auditor of Governmental Agent Multiple-Employer Pension Plan," of AU-C section 805, Special Considerations - Audits of Single Financial Statements and Specific Elements, Accounts, or Items of a Financial Statement (June 2014)

• Interpretation No. 3, "Auditor of Participating Employer in a Governmental Agent Multiple-Employer Pension Plan," of AU-C section 500, Audit Evidence (June 2014)

11

AICPA - Ethics

New Professional Code of Conduct issued in June 2014; effective December 15, 2014

M f i dl d i t iti l d• More user friendly and intuitively arranged • No significant changes to existing requirements and restrictions• Incorporates conceptual framework approach• Find more information

Actively involved in investigating referrals from federal agencies on poor quality auditsTask force assembled to review and update Ethics


pInterpretation 101-10, The Effect on Independence of Relationships With Entities Included in the Governmental Financial Statements• Just an FYI….will not affect 2015 engagements

12

7

Enhancing Audit Quality Initiative• Discussion Paper

2015 Risk Areas:• Evaluation of independence

as it relates to nonattest

AICPA - Peer Review

Discussion Paper

• Archived Webcast

• Forum

• Article

• Practice Aid Establishing and Maintaining a System of Quality Control for a CPA Fi ’ A ti d

services

• Evaluation of client and specialist skills, knowledge and experience (SKE)

• Sufficiency of audit evidence, in particular sampling, risk assessment,


Firm’s Accounting and Auditing Practice (Free)

Future of Practice Monitoring Project

p gand internal controls

• Employee Benefit Plans, including ESOPs and government pensions

• Municipal security issuers

13

AICPA Resources

Audit and Attest Section of AICPA Web Site

Peer Review Section of AICPA Web Site

Ethics Section of AICPA Web Site


8

GAO – Past Year ActivitiesNothing new with Government Auditing Standards (Yellow Book)

New GAO Green Book Standards for InternalNew GAO Green Book, Standards for Internal Control in the Federal Government• Effective for fiscal years beginning FY16; early

adoption permitted by management

• Leverages the COSO Framework but written for government


• Permitted (not required) as a framework for State, Local, Non-for-profit

Why important for this audience?• UG identifies it (or COSO) as a best practice for non-federal

entities (will discuss in more detail in single audit section)

15

GAO – Government Auditing Standards (Yellow Book) Common Audit Deficiencies

Yellow Book independence deficiencies• Failure to document the evaluation of management’s skills,

knowledge, or experience to effectively oversee nonaudit services performed by the auditor

• Failure to document threats to independence that require the application of safeguards, along with the safeguards applied, in accordance with the conceptual framework for independence

• Keep in mind a focus area for peer review

Failure to meet Yellow Book CPE requirements


Failure to meet Yellow Book CPE requirements

Failure to meet Yellow Book peer review requirements

Yellow Book reporting deficiencies

Use resources on next slide to avoid!

9

GAO/GAQC Yellow Book Resources GAQC Government Auditing Standards Tools and Aids Web Page

Archived GAQC Web event, Audit Quality Discussion Part II: Avoiding Common Deficiencies in Yellow Book and Single Audits

Archived GAQC Web event, The Yellow Book: A Hodgepodge of Related Topics From a Practitioners Perspective, various Yellow Book topics and commonly asked by our members.

GAQC practice aid titled, 2011 Yellow Book Independence—Nonaudit Services Documentation Practice Aid

Archived GAQC Web event, Understanding the AICPA's Yellow Book Independence Practice Aid for Performing Nonaudit Services


Ethics comparison of AICPA standards versus GAO

GAO Guidance on Requirements for GAGAS Continuing Professional Education (http://www.gao.gov/assets/80/76894.pdf)

GAO hotline - [email protected] or call (202) 512-9535

17

Single Audit – Uniform Guidance Timeline to Date

October 2011 – Council on Financial Assistance Reform (COFAR) created

December 2013 – Final UG issued

January 2014 – 1st COFAR Webcast

February 2014 – 1st COFAR Frequently Asked Questions (FAQ) issued

August 2014 – 2nd COFAR FAQs Issued

October 2014 – 2nd COFAR Webcast


November 2014 – Minor Update to COFAR FAQs

December 2014 – Joint Interim Final Rule Issued (including agency implementation and technical corrections)

Spring 2015 – Compliance Supplement?18

10

Single Audits – Uniform Guidance - The Most Important Items to Understand for 2015

Timing of Requirements• 2015 single audits performed under Circular A-133 affected

• New Uniform Guidance audit requirements do not kick in until 12/31/15 year-end single audits

• Effective date to be challenging for compliance testing

2015 OMB Compliance Supplement will be key

Some federal agencies may have adopted differences in certain requirements


Internal control uncertainties

“Should” usage different than under AICPA clarity standards

Beware of requests for internal control certifications

19

Single Audit – Uniform Guidance - Effective Dates/Timing

Federal agencies must implement policies and procedures by promulgating regulations to be effective December 26, 2014December 26, 2014• Accomplished with issuance of recent Joint Interim Final Rule

Non-federal entities will need to implement the new administrative requirements and cost principles for all new Federal awards made after December 26, 2014, and to additional funding to existing awards (referred to as funding increments) made after that date• Non-federal entities wishing to implement entity-wide system


changes to comply with the guidance after December 26, 2014, will not be penalized for doing so

Audit requirements effective for fiscal years beginning on or after December 26, 2014• Not permitted to early implement any of the audit provisions

20

11

Single Audit – Uniform Guidance Effective Dates/Timing

March 31, 2015, June 30, 2015, and September 30, 2015 year-ends• Non-federal entities will have to adopt new administrative requirements

d t i i l l ti t ll f d l d d t f diand cost principles relating to all new federal awards and to funding increments to existing awards

• Single audit requirements continue to use “old” regulation

• Auditor compliance testing will be affected by client adoption of “new” requirements (i.e., will likely have to test some awards subject to the “old” requirements and some the “new” requirements)

December 31, 2015, year-ends and beyondNew single audit requirements apply


• New single audit requirements apply

• Auditors may have to test some awards subject to the “old” requirements and some the “new” requirements for several years

21

Single Audit – Uniform Guidance Effective Date/Timing and Funding Increments(COFAR FAQ .110-13 and 13)

UG applies to funding increments to existing awards in cases where the federal agency considers the funding increments to be an opportunity to modify the terms and conditions of the award.

Existing federal awards that do not receive


incremental funding with new terms and conditions will continue to be governed by the terms and conditions of the federal award.

22

12

Single Audit – Uniform Guidance Effective Date/Timing and Pass-Through Awards? (COFAR FAQ .110-11)

Subrecipients and subawards• The effective date of the UG for subawards is

the same as the effective date of the federal award from which the subaward is made

• The requirements for a subaward, no matter when made, flow from the requirements of the


original federal award from the federal awarding agency

23

Uniform Guidance – Sampling of Key Client Requirements

New/Revised Cost Principles

New/Revised Administrative Requirementse / e sed d st at e equ e e ts

Indirect Costs (10% deminimis)

Procurement changes (one-year delay has been provided)

Subrecipient Monitoring Requirements enhanced


13

Single Audit – Uniform Guidance - 2015 Compliance Supplement

2015 Supplement will be used for audits performed under Circular A-133 and the Uniform GuidanceFederal workgroups working to develop new and

d t d idupdated guidanceThere will be two Part 3 sections in 2015• One for testing awards subject to UG administrative and cost principle

requirements• One for testing awards subject to “old” rules• Transitional information will be included

Reduction in compliance requirements• Not as significant as might think


Parts 4 and 5 may be affected as wellGAQC Web event on the Supplement to be held on June 10, 2015, from 1:00 – 3:00 PM; watch for registration information

25

Single Audit – Uniform Guidance - Joint Interim Final Rule

Incorporates federal agency implementing regulations • Some agencies making revisions to UG (e.g., DoD)

Also includes technical corrections • Some “shoulds” changed to “must”

Effective December 26, 2014

Very dense; need to read carefully


GAQC Alert #268 includes more detail

Bottom line: Auditors need to understand agency differences to perform your single audits

26

14

Single Audit – Uniform Guidance – Internal Controls

Internal Controls (section XXX.303).

The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” [Green Book] issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).


OMB has stated that the should is meant to be a “best practice” and not a presumptively mandatory requirement.

27

Single Audit – Uniform Guidance – Internal Control

Part 6 in 2015 Supplement not likely to be updated for COSO or the Green Book (may even be removed?)• Auditees (and auditors) better off looking to

COSO or Green Book

• Working group of federal agencies, auditees, and auditors to make substantive updates to Part 6


• Not likely to occur until 2016

• In the meantime, uncertainty around expectations for nonfederal entities and their auditors in this area

28

15

Single Audits – Uniform Guidance – Planning Will be Key

Planning Considerations Will be Different for Various 2015 Year-EndsVarious 2015 Year Ends• March, June, September 2015 Year-Ends

• December 31, 2015, Year-Ends and Beyond

Key Action Item – View Archived GAQC Web Event, Uniform Guidance for Federal Awards: Auditor Planning Considerations


gfor the New Single Audit Rules

We will only summarize several key points today

29

Single Audit – Key Planning Considerations

Meet early on with clients to discuss nature of federal awards expendedof federal awards expended • Taking an “inventory” is important

This step is important for determining whether will be testing against “old” or “new” requirements• There may be audits where there is very little impact


There may be audits where there is very little impact

• There may be other audit scenarios where impact will be larger

• There may not be any reduction in audit effort or cost!

30

16

Single Audit - Key Planning Considerations

If auditees expend federal funds subject to the UG, need to understand new administrative requirements and cost principles requirements (see resources slides for related GAQC Web events)

A sampling of important changes and how addressed in new “Part 3” section of 2015 Supplement include:• Internal Control – covered in all Compliance Requirements


• Procurement – covered in Procurement and Suspension and Debarment

• Direct and Indirect Costs – covered in Allowable Costs/Cost Principles

• Time and Effort – covered in Allowable Costs/Cost Principles

• Subrecipient Monitoring – covered in Subrecipient Monitoring

31

Single Audit - Key Planning Considerations

A key step in getting ready is to ensure staff is trained • Cover new auditee requirements

• Cover how to use the 2015 Compliance Supplement

• May want to hold off on training on the new audit requirements until the Fall

GAQC archived and upcoming Web events may help with training

R b l i l t ti f dit


Remember….no early implementation of audit requirements!

32

17

Single Audit – Uniform Guidance Access Information

All OMB guidance for federal awards streamlined in Title 2 of CFR, Subtitle A, Chapter II, Part 200How to Access the UGHow to Access the UG• Electronic Code of Federal Regulations (e-CFR) version• PDF version of the Federal Register Notice in its entirety • Access other related OMB documents at

http://www.whitehouse.gov/omb/grants_docs

How to access COFAR documents and Webcasts• Visit https://cfo.gov/COFAR/• Go to the COFAR Mailing List link to register and receive future


g gannouncements, information on upcoming webcasts, and other COFAR resources

How to access the Joint Interim Final Rule• PDF version of the Federal Register Notice in its entirety

33

Single Audit – GAQC Uniform Guidance Resources

GAQC Alerts:• GAQC Alert #241 - OMB's New Uniform Grant Guidance

Subparts A D and Other Key Related InformationSubparts A-D and Other Key Related Information

• GAQC Alert #243 - Information about the New COFAR FAQs on the Uniform Grant Guidance

• GAQC Alert #250 - OMB's New Uniform Grant Guidance Subpart E and Other Key Related Information

• GAQC Alert #268 - Uniform Guidance Implementing Rules and Technical Corrections Issued for Comment


• Future GAQC Alerts on specific guidance in the Uniform Guidance

• Go to: http://www.aicpa.org/GAQC

34

18

Single Audit – GAQC Uniform Guidance Resources

GAQC Web Events:• Archived Web Events

U if G id f F d l A d A dit Pl io Uniform Guidance for Federal Awards: Auditor Planning Considerations for the New Single Audit Rules

o Uniform Guidance for Federal Awards: How Clients will Need to Monitor Subrecipients Going Forward

o Uniform Guidance for Federal Awards: The New Cost Principles, Time and Effort Reporting, Procurement and Other Administrative Requirements

U i W b E t


• Upcoming Web Events

o 2015 Compliance Supplement – June 10, 2015

o Single Audit Fundamentals (multi-part series updated for the UG) – Fall 2015

o Rebroadcasts of various events coming in June 2015

35

Single Audit – Uniform Guidance - 2018 Study of Single Audit Quality

Uniform Guidance requirement for a federal study of quality once every six years beginning in 2018

Statistically reliable estimate of the extent that single audits conform to applicable requirements, standards, and procedures

Recommendations required to address noted issues

Results of reviews must be made public

2018 timing may result in audits implementing the


2018 timing may result in audits implementing the Uniform Guidance for the first time being selected as part of the review

This study should be something auditors focus on now!

36

19

A Refresher on the Prior Federal Single Audit Quality Study Results


Previous federal study of single audits issued in 2007 resulted in more than 50% of audits being either unacceptable or limited reliability

Common Single Audit Deficiencies Then (and Maybe Now???)

Major program determination problems

Lack of understanding and testing internal control

Improper use of Compliance Supplement or compliance testing problems

Schedule of Expenditure of Federal Awards (SEFA) deficiencies

Inadequate or missing audit documentation

Single audit reporting errors


Single audit reporting errors

Findings problems

Federal Audit Clearinghouse (FAC) Data Collection Form (DCF) errors

38

20

Federal Agency QCR and Desk Review Checklist Updates

Both checklists updated in 2015

Updates made were for the AICPA clarity auditing standards and 2011 Yellow Book

Effective for QCRs and desk review of audits conducted in accordance with OMB Circular A-133 for audit periods ending on or after December 15, 2012

Guides have not been updated for and are not to be


used by the federal agencies for the review of single audits performed under Uniform Guidance

Access the checklists (2015 Editions)• Guide for Quality Control Reviews of OMB Circular A-133 Audits

• Guide for Desk Reviews of OMB Circular A-133 Audit Reports

39

FAC – Data Collection Form (DCF) Developments

Continuation of current DCF for audits before 12/31/15 (Circular A-133 audits)

Requirements for finding numbers and text searchable, unlocked, and unencrypted submissions became effective starting in January 2015• FAC reports few problems reported with requirement for 85% text

searchable unlocked and unencrypted submissions


searchable, unlocked, and unencrypted submissions

Federal working group established to work on new DCF for Uniform Guidance single audits • Also discussing other updates/changes to process

• Federal Register notice will provide opportunity to comment

40

21

Tips to Avoid Data Collection Form Errors

Information on DCF should agree with single audit reports

Avoid these common issuesAvoid these common issues• Summary of Auditor’s Results lists cluster as audited as a major

program but DCF doesn’t indicate some or all of the programs in the cluster were audited as major

• All lines on DCF with same CFDA # not marked as audited as major

• Audit findings on DCF don’t agree to single audit reports


• Type A/B threshold on DCF doesn’t match threshold shown on Summary of Auditor’s Results

• Amounts on DCF don’t agree with amounts on the SEFA

• Inconsistency between federal awards and audit findings tabs

• Identifying a program-specific audit when a single audit performed

41

FAC Data Collection Form

GAQC and FAC Resources• GAQC Alert #234,GAQC Alert #238, and GAQC Alert 243 for

more information about the latest version of the DCF and related processes.

• GAQC Web event titled, The New Data Collection Form and Important Clearinghouse System Changes.

• The FAC's Frequently Asked Questions Web page.

• PDF quick reference guide from the FAC to learn more about the new FAC system.

• A question and answer document developed by the GAQC on


• A question and answer document developed by the GAQC on previous FAC system changes and the last version of the DCF

42

22

2015 AICPA Audit Guide

New Title: AICPA Audit Guide, Government Auditing Standards and Single Audits

eBook expected to be available in late June and print p pversion in late July

Significant changes this year• Maintaining old and new single audit guidance through transition

period

• All single audit chapters (5-14) addressing Circular A-133 audits being updated and maintained.


• Numerous new chapters (15-24) being added addressing the Uniform Guidance in new Part III

• Transition guidance being added to each chapter as well

Once available, order at: www.cpa2biz.com

43


Housing and Urban Development• Multifamily News

o New Nursing Home Operator Reporting Guidance - Federalo New Nursing Home Operator Reporting Guidance - Federal Notice No. FR-5794-N-02 – “Submission of Operator Financial Reports in Accordance with HUD’s Uniform Financial Reporting Standards: Commencement of Compliance

• 2014 Version of Regulatory Agreement

• Lender News

o Lender Electronic Assessment Program (LEAP) deployed


o Lender Electronic Assessment Program (LEAP) deployed May 2014

• NFP, SLG and Indian Tribes

o HUD Notice SD 2015-1, Transition to 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Final Guidance

44

23


HUD Resources • GAQC Web site HUD Information page a good

resource

• Archived Web events, The HUD Consolidated Audit Guide Part I: For-Profit Multifamily Housing Audits, and The HUD Consolidated Audit Guide Part II: Lender Audits.

• GAQC Alert #243 - HUD Lender News and GAQC


Alert #222 - HUD Issues Revised Chapter 1 of HUD Guide

45


Examples of Various For-Profit Compliance Audits beyond HUD• Agriculture: Rural Utility Service; Rural DevelopmentAgriculture: Rural Utility Service; Rural Development

• Commerce: Broadband Technology Opportunities Program

• HHS: National Institute of Heath For-Profit Grant Recipients

• Education: Proprietary Schools; Lenders

Look at summary of other compliance audits of for-profit entities on GAQC Web site which indicates latest status and links to audit regulations or guides


latest status and links to audit regulations or guides

Look to federal agency regulations and/or federal audit guides for audit requirements

What if regulation or a federal audit guide take approach of referencing a Circular A-133 audit?

46

24

GASB-Related Topics

2015 Pension Focus - Employer Accounting for Pensionsg• Don’t wait until October to see if you will have

what you need to opine on your client’s financial statements

• Start asking questions now!

2015 State & Local Governments A&A G id


Guide

GASB Standards on the Horizon

Noted Deficiencies in State & Local Engagements

47

GASB - 2015 Pension Focus for Audits of Employers

Preparation & Planning Considerations for employers participating in all types offor employers participating in all types of plans• Does the client’s measurement date make

sense?

• Do you think you have a special funding situation?


• Is the plan audited?- Remember that AU-C 600 (group audits) does NOT

apply for employer pensions amounts – you cannot reference plan auditor?

• Have you planned for census data testing?

48

25


Preparation & Planning Considerations for Employers Participating in Single-EmployerEmployers Participating in Single-Employer Plans• Is the plan separately audited? By another auditor?

• Is management taking appropriate responsibility for its pension amounts?

- Will the employer need an opinion from plan on the pension ?


amounts?

49


Preparation & Planning Considerations for Employers Participating in Agent PlansEmployers Participating in Agent Plans• Is management taking appropriate responsibility

for its pension amounts? - Similar to single-employer

• How is the employer getting evidence over actuarial driven amounts (i.e., Total Pension


Liability, Pension Expense, Deferred Inflows/Outflows of Resources?

• How is the employer getting evidence of fiduciary net position?

50

26


Preparation & Planning Considerations for Employers Participating in Cost-SharingEmployers Participating in Cost Sharing Plans• How is the plan reporting amounts attributable to

the employer?- Simple schedule or full detail of pension amounts?

- Will the plan provide a draft report to review?


GASB - Pension Resources Available

Pension Issues & Resource Page on GAQC Web site• GASB Implementation Toolkit for Governments

• Pension Whitepapers & Auditing Interpretations

• Archived GAQC Alerts and Archived GAQC Web Events:

o GASB Pensions: Are You Ready for June 30, 2015, Audit Implementation?


o Considerations for Cost-Sharing Plans, Participating Employers

o Considerations for Agent Plans and Participating Employers

o Overview of the New GASB Pension Accounting Standards

AICPA GASB Statement No. 68 Workshop 52

27

2015 AICPA State & Local Governments A&A Guide

New Chapter to be Issued July 2015• Part 1. Accounting & Auditing Considerations for Audits of

Pension Plans (GASB 67)Pension Plans (GASB 67)

• Part 2. Employer Accounting, Financial Reporting, and Auditing Considerations: Single and Agent Employers (GASB 68)

• Part 3. Employer Accounting, Financial Reporting, and Auditing Considerations: Cost-Sharing Employers (GASB 68)

Oth Additi


Other Additions• GASB Statement No. 69, Combinations

• GASB Statement No. 70, Nonexchange Financial Guarantees

• New appendix, summarizes key aspects of the quality control standard

53

GASB Standards – On the Horizon

GASB Statement No. 72, Fair Value Measurement & Application (6/30/16 year-

d )ends)

GASB Statements to be Issued in Future and Expected Issuance Dates• OPEB (Employer and Plan), 2Q15

• Non Trust Pensions, 2Q15

GAAP Hi h d C h i I l t ti


• GAAP Hierarchy and Comprehensive Implementation Guide, 2Q15

• Tax Abatement, 3Q15

Access SLGEP Comment Letters to GASB

54

28

Noted Deficiencies in State & Local Engagements

Management’s Discussion and Analysis (MD&A)

Defining the Reporting Entity

Independent Auditor’s Report

Disclosures

Outdated Terminology in Financial


Outdated Terminology in Financial Statements, Notes and MD&A

55

Upcoming GASB-Related GAQC Web Event

May 20, 2015, from 1:00 PM – 3:00 PM

Title: Audits of State and Local Governments: Common Risk Factors and Related Audit Responses

Watch for GAQC Alert with Registration Information


29

FASB – Not Much New Affecting June 2015 Audits

But lots of big things coming in future: • FASB Exposure Draft, Financial Statements p

of Not-for-Profit Entities

- Issued last week with comments due August 20. 2015

• Implementation of revenue recognition

Familiarity needed as NFP clients likely


Familiarity needed as NFP clients likely to have many questions• Members should seek more information and

training

57

NFP Audits – A Few 2015 Reminders

FASB ASU 2013-06, Topic 958: Services Received from Personnel of an Affiliate• Do not overlook this ASU; effective for June 30 2015• Do not overlook this ASU; effective for June 30, 2015,

year-ends

• Mostly affects entities that do not have their own employees (e.g., religious organizations, hospital foundations)

• Clients should have established controls


AICPA Q&A titled, Not-for-Profit Entity with a For-Profit Subsidiary and Adoption of FASB ASU 2014-02 on Goodwill; Issued in January 2015

58

30

NFP Audits – A Few 2015 Reminders

Q&A titled, Effect of New Mortality Tables on Nongovernmental Employee Benefit Plans (EBPs) and Nongovernmental Entities That Sponsor EBPs; Issued in February 2015

Alternative investments continue to be a challenge


Other NFP Updates

2015 AICPA Audit and Accounting Guide, Not-for-Profit Entities (NFP Entities Guide) to be released on May 1May 1

2015 AICPA Audit Risk Alert, Not-for-Profit Entities Industry Developments

AICPA Not-for-Profit Certificate Program – Available now!

Not-for-Profit Section – Coming soon!


31

NFP Emphasis Points/Quality Issues

Valuation of Gifts In-Kind

Functional Allocation Issues

Classification of Net Assets

Exchange and nonexchange revenue

Improper use of grant accounting instead of GAAP

Inadequate Disclosures• Unsupported tax positions

• Publicly traded debt

• Nature and extent of donor-imposed restrictions

• Nature and extent of contributed services


• Operating income

• Fair value

• Alternative Investments

• Uniform Prudent Management of Institutional Funds Act (UPMIFA)

• Performance Indicators

61

FASB – AICPA Resources

NFP Resources• AICPA Web Event

Not for Profit Accounting & Reporting: From Start to Finisho Not-for-Profit Accounting & Reporting: From Start to Finish, May 12

o Not-For-Profit Entities: 2015 Audit & Accounting Issues, May 26

• AICPA NFP Conferences

o AICPA Not-for-Profit Industry Conference, June 15, 2015 -June 17, 2015 - National Harbor, MD (Online Option A il bl )


Available)

o AICPA National Governmental and Not-for-Profit Training Program, October 19, 2015 - October 21, 2015 - New Orleans, LA

62

32

Looking Forward

• Seek clear guidance from on UG, Federal Audit Clearinghouse efforts HUD etc

AdvocacyAdvocacyefforts, HUD, etc.

• Updated AICPA Guidance for UG, conferences, CPE and technical updates and resources from GAQC

New Single Audit New Single Audit GuidanceGuidance

• Assistance to members, conference sessions, GAQC communications, publications

GASB PensionsGASB Pensions

Contin edContin ed


• Work collaboratively with peer review team, ethics, and federal agencies

ContinuedContinuedEmphasis on Improving Emphasis on Improving

QualityQuality

• GAQC Alerts, GAQC Web events, tools, resources, articles, etc.

Continued Support Continued Support to Membersto Members

63

GAQC Contacts

AICPA Staff

Best way to reach us: [email protected] g q @ p g

• Director:- Mary Foelster [email protected]

• Technical Managers- Teresa Bordeaux tbordeaux@aicpa org


- Teresa Bordeaux [email protected] Laura Hyland [email protected] Rafael Roman [email protected]

64

33

Oth AICPA d GAQCOther AICPA and GAQC Resources

• Primary Focus• Government Auditing Standards &

AICPA Resources (www.cpa2biz.com)

• Government Auditing Standards & Circular A-133 Audits

• State and Local Governments - Audit and Accounting Guide

• Other Industries Include• Not for Profit Entities• Health Care Entities• Gaming


g• Sampling

• Audit Risk Alerts• Checklists & Illustrative

Statements

66

34

GAQC ResourcesGAQC Web site (www.aicpa.org/GAQC)


GAQC Resources

Illustrative Auditor Reports Archived Alerts & Web

On GAQC Web site you can find:

Peer Review Checklists

Tips for Getting Through a Quality Control Review

Marketing Toolkit Member listing Membership Q&A Governmental event and

Events

Articles

Auditee Resource Center

Circular A-133 Resource Center

Practice Aids and Tools (single audit & Yellow


Governmental event and conferences summary

Governmental & NFP CPE Opportunities

( gBook)

GASB Matters Page

HUD Information Page

So much more!68

35

GASB Matters Web Page

New GASB Matters Web Page


Auditee Resource CenterAuditee Resource Center Practice Aid - Procuring Governmental Audit Services


36

GAQC Resources – GAQC AlertsArchived Alerts (click here to access)

Alert No. Alert Date Alert Description

273 17‐Mar‐15 Register for April 28th Required 2015 GAQC Annual Update Webcast

272 25‐Feb‐15 Updates on Single Audit and Other Advocacy Efforts

271 11‐Feb‐15 Register for March 4th Web Event on GASB Pensions Audit Implementation

270 16‐Jan‐15 2015 Compliance Supplement Available for Comment and Uniform Guidance Update

269 14‐Jan‐15 Ready for the Uniform Guidance for Federal Awards? Register for Related February 5th Web Event

268 24‐Dec‐14 Uniform Guidance Implementing Rules and Technical Corrections Issued for Comment

267 23‐Dec‐14Register for January 22nd Event on Avoiding Common Audit Deficiencies in Yellow Book and Single Audits

266 17‐Dec‐14 Register for January 14th Event on Avoiding Common Audit Deficiencies in SLG Audits

265 16‐Dec‐14GAQC Membership Compliance Questionnaire - Future of Practice Monitoring - Year-End Yellow Book CPE Opportunities

264 19‐Nov‐14 Register for December 3rd Scared Straight: Audit Quality Web Event

263 11‐Nov‐14 FAC Accepting 2014 Submissions and Other Important News

262 21‐Oct‐14 Register for November 12th HUD Web Event

261 29‐Sep‐14Register for October 15th Web Event on the Uniform Guidance for Federal Awards' Subrecipient Monitoring

260 22‐Sep‐14 GAQC Announces Web Event Schedule through June 2015

259 9‐Sep‐14 Enhancing Audit Quality Resources Available

258 8 SRegister for the September 25th GAQC Web Event - Uniform Guidance for Federal Awards Cost


258 8‐Sep‐14g p

Principles

257 15‐Aug‐14AICPA Releases Quality Paper; 2014 DCF Update; Performing Out-of-State Attest Work; Center Dues

256 23‐Jul‐14 Important GAQC, GASB, and HUD Updates

255 26‐Jun‐14New Agent Pension-Related Auditing Interpretations and Summary of Key Pension-Related Guidance

254 23‐Jun‐14 Required GAQC Webcast Rebroadcast and Other GAQC Web Event Rebroadcast Opportunities

253 29‐May‐14Important New Agent Plan Guidance for Plans, Participating Governmental Employers, and Their Auditors Issued by AICPA

252 21‐May‐14Register for June 18th Web Event on the New Compliance Supplement and Uniform Grant Guidance

251 19‐May‐14 OMB Releases Final 2014 Compliance Supplement

250 14‐May‐14 OMB's New Uniform Grant Guidance Subpart E and Other Key Related Information

GAQC Resources – Web EventsClick here to see all archived events organized in topic order and click hereto see all in chronological order.

Date Topics

3/4/2015 GASB Pensions: Are You Ready for June 30, 2015, Audit Implmentation

2/5/2015Uniform Guidance for Federal Awards: Auditor Planning Considerations for the New

2/5/2015Single Audit Rules

1/22/2015Audit Quality Discussion Part II: Avoiding Common Deficiencies in Yellow Book and

Single Audits

1/14/2015Audit Quality Discussion Part I: Avoiding Common Deficiencies in State and Local

Government Financial Statement Audits ‐ Member Web Event

1/14/2015Audit Quality Discussion Part I: Avoiding Common Audit Deficiencies in State and Local

Government Financial Statement Audits12/3/2014 Scared Straight — The Consequences of Poor Audit Quality

11/12/2014Most Frequently Asked Questions about Auditing HUD Multifamily Housing Entities and

Other HUD Activities

10/15/2014Uniform Guidance for Federal Awards: How Clients will Need to Monitor Subrecipients


10/15/2014p

Going Forward

9/25/2014Uniform Guidance for Federal Awards: The New Cost Principles, Time and Effort

Reporting, Procurement and Other Administrative Requirements 6/18/2014 2014 Compliance Supplement and New Uniform Grant Guidance Key Points5/29/2014 Required GAQC 2014 Annual Update Webcast

5/7/2014The GASB's Pension Standards Part II: Considerations for Agent Plans and Participating

Employers

5/6/2014The GASB's Pension Standards Part I: Considerations for Cost‐Sharing Plans, Participating

Employers

37

GAQC Resources – Tools & Practice Aids

Audit Practice Tools and Aids • Single Audit Practice Aids

- Schedule of Expenditures of Federal Awards

- Internal Controls and Compliance Practice Aids

• Government Auditing Standards (Yellow Book) Tools and Aids- 2011 Yellow Book Independence—Nonaudit Services Documentation

Practice Aid

- AICPA – Government Auditing Standards Independence Rules Comparison

• Other Compliance Audit Information Relating to For-Profits- List of Federal Agency Compliance Audit Guides and Status

• Governmental Audit Quality Article Collection


• Governmental Audit Quality Article Collection- Implementation Considerations of GASB 61

- Auditor Association with Municipal Securities Filings

• Auditee Resource Center Practice Aid - Procuring Governmental Audit Services

73

GAQC Resources – Tools & Practice Aids

HUD Information

Illustrative Auditors Reports• Single Audit, Yellow Book, HUD

GASB M ttGASB Matters• Key Interest Areas (Pension Issues & Resources)

- Recent Whitepapers related to Cost-Sharing Plans, Auditing Interpretations, Additional Pension Resources

• Key Resources & Advocacy Efforts

Quality Control Tools• Peer Review Checklists

• Tips for Getting Through a Quality Control Review


p g g y

• Peer Review Checklists

Marketing Toolkit for Member Firms & Logos• Common document templates such as, Newsletters, Press Releases, etc.

• Training on how to build a niche practice

• Membership Listings

74

38

Available Resources

AICPA 2015 Conferences

• AICPA Not-for-Profit Industry Conference, June 15-17, Gaylord National Resort & Convention Center, National Harbor, MD

• AICPA National Governmental Accounting and Auditing Update• AICPA National Governmental Accounting and Auditing Update Conference (GAAC) EAST, August 10-11, J.W. Marriott, Washington, DC

• AICPA National Governmental Accounting and Auditing Update Conference (GAAC) WEST, September 29-30, Hilton San Diego Resort and Spa, CA

• AICPA National Governmental and Not-for-Profit Training Program, October 19 20 Hyatt Regency New Orleans LA


October 19-20, Hyatt Regency, New Orleans, LA

All conferences have extensive sessions offerings on governmental auditing topics, some of which were developed with assistance from the GAQC

GAQC members can obtain a registration discount – click on this link

75

Questions ???


1

FINANCIAL AND ADMINISTRATIVE SERVICES

Federal Programs Tiered Monitoring

Missouri Departmentof Elementary and Secondary EducationMay 5, 2015

Agenda

Subrecipient Monitoring

Period of Availability/Obligations Period of Availability/Obligations

Allowable Costs

Financial Management/Separate Tracking/Cash Management

Equipment and Supplies Management

Procurement

Time and Effort

Supplement/Supplant/MOE

2


High Risk Status:

Th S i h h i d 74 14 d 80 12The Secretary retains the authority under 74.14 and 80.12 to impose high risk conditions on individual grants and individual grantees at time award is made or after an award is made.


Districts/LEAs are sorted into three Cohorts (groups)

There are 4 Levels in the Tier Monitoring CycleThere are 4 Levels in the Tier Monitoring Cycle

Desk Audit/Application Review

Tier 1: Self‐Assessment/Desk Monitoring

Tier 2: On‐site Monitoring

Tier 3: Training and Preparation

Cohorts will move through the Tier Levels from year to yearg y y

TIER LEVEL 2014‐15 2015‐16 2016‐17

Desk Audit/Application Review All Cohorts All Cohorts All Cohorts

Tier 1: Self‐Assessment Cohort 1 Cohort 2 Cohort 3

Tier 2: On‐site Monitoring Cohort 3 Cohort 1 Cohort 2

Tier 3: Training & Preparation Cohort 2 Cohort 3 Cohort 1

3


Possible Risk Factors – On‐site or Telephone

Amount of federal funds (large amounts = greater risk) Amount of federal funds (large amounts = greater risk)

A‐133 audit findings

Late MOSIS/Core Data Reports

Financial Distress

Administrator Changes/Other Issues Reported by Auditor or LEA

Late FER

Late Budget Application

Violation of CMIA

Subrecipient Monitoring General Federal Guidance, Special Education Fiscal Monitoring Guide, and

Elementary & Secondary Education (ESEA) Finance Monitoring Guide will be y y ( ) gupdated with new Omni requirements

Regional Special Education Fiscal Monitoring trainings will be held again in the fall

2016‐17 will be the first year LEAs will be monitored on the implementation of the new Omni requirements effective in the 2015‐16 school year

Self‐Assessments:

LEAs in Cohort 3 will complete Self‐Assessments in 2016‐17

On‐Site Reviews:

Selected LEAs in Cohort 2 will receive On‐Site reviews in 2016‐17

Cohort list: http://dese.mo.gov/sites/default/files/qs‐cohort‐lists‐2014.pdf

4

Period of Availability/Obligations

Each grant has a period for which funds can be obligated and expendedexpended

The approved project period is the time frames for which obligations may be incurred and liquidated

LEA may charge to the award only costs resulting from obligations incurred during the funding period

34 CFR 75 707 d 2CFR P t 200 30934 CFR 75.707 and 2CFR Part 200.309

Period of Availability of Funds

Grant Cycle Obligation Period FER Reporting Period

July 1 – June 30 Date of Substantially Approved Application – June 30

July 1 – September 30

Period during which funds may be obligated and

Obligations occur during the grant cycle, but only after a

Expenditures for obligations made during the obligation

expended. substantially approved budget application has been submitted.

period (date of substantially approved application – June 30) may be reported up until September 30.

5

When is an Obligation Made?

IF THE OBLIGATION IS FOR‐‐ THEN THE OBLIGATION IS MADE‐‐ Acquisition of real or personal property On the date the school district makes a binding written

commitment to acquire the property

Rental of real or personal property When the school district uses the property

Personal services by an employee of the school district

When the services are performed

Personal services by a contractor who is not an employee of the school district

On the date the school district makes a binding written commitment to obtain the services

Performance of work other than personal On the date the school district makes a binding written services commitment to obtain the work

Public utility services When the school district receives the services

Travel When the travel is taken

334CFRPart75.707

Period of Availability/Obligations

July 1, 2015 April 30, 2016 June 30, 2016 September 30, 2016

• Beginning of the FY16 Grant Cycle

• FY16 Budget Applications Due

• LEAs may begin obligating

• FY16 Budget Revisions Due

• Budget any carryover funds from FY15

• Deadline for all obligations for 2015-16 expenditures

2016

• All expenditures for 2015-16 obligations must be finalized

• FY16 FER Due

• Any FY16 FY16 grant funds as soon as the Budget Application is submitted (substantially approved)

Grant Funds not expended will carryover into FY17

6

Allowable

LEAs assume responsibility for ensuring that federal funds have been expended and accounted for consistent with program regulations and approved applications.

All costs must be:

Necessary and reasonable for the performance of the grant

Conform to any limitations or exclusions

Consistent with state and local policies

In accordance with GAAP

Adequately documented

Net of all applicable credits

2 CFR Part 200.403

Allowable

Written procedures for determining the allowability of costs in accordance with Subpart E Cost Principlescosts in accordance with Subpart E – Cost Principles

Should explain the process used throughout the grant development and budget process (Federal funds must be budgeted in ePeGS prior to obligating)

Training tool and guide for employeesg g p y

ESEA and IDEA Part B federal funds must be prorated if not directed 100% towards the federal program

2CFRPart200.302

7

Financial Management

For each award, LEA financial management system must provide:

Account identification of awards and expenses Account identification of awards and expenses

Accurate, current, and complete financial disclosure

Source and application of funds

Effective accountability for all fund, property and assets

Comparison of expenditures with budget

Written procedures on minimizing the time elapsing between expenditure Written procedures on minimizing the time elapsing between expenditure

and reimbursement (cash management)

Written procedures for determining allowability

Separate tracking and must not comingle funds

2CFRPart200.302

Separate Tracking

Use Accounting Codes in the Missouri Financial Accounting Manual (Special Education expenditures should be coded to Special Education function codes)

These codes include Fund Code, Function Code, Object Code, Operational Code, and Source of Funds Code.

Source of Funds/Project Code should be used to identify individual federal programs

Program person should work closely with the finance person to Program person should work closely with the finance person to make sure the accounting system is set up appropriately

8

Separate Tracking

IDEA Part B Allocation $515,412.00

+ $174,271

+ $109,713

+ $11,447

+ $89,873

+ $126,405

+ $2,196

+ $1,429

+ $78

* $515,412

9

Accounting Records - Example

Accounting Records - Example

10

Source Documentation

Accounting records must be supported by source documentation such as cancelled checks, paid bills, payrolls, time and attendance records, contract and sub‐award documents.

Electronic copies are okay.

Proper authorization – Example: Make sure that time and effort logs are signed by the appropriate staff.

Must retain for at least 3 years from the end of the grant. The statute of limitations is 5 yearsstatute of limitations is 5 years.

Cash Management

The Cash Management Improvement Act (CMIA) was placed in operation to prevent interest earnings on federal fundsin operation to prevent interest earnings on federal funds.

The CMIA requires LEAs to demonstrate when receiving federal funds that they have either already spent the funds or will spend the funds within three business days of receipt of funds.

DESE d t ll d t DESE does not allow advance payments.

2CFRPart200.305

11

Cash Management

DESE must monitor LEA to ensure timely payments.

Expenditures are transactions that are recorded on the books and Expenditures are transactions that are recorded on the books and delivered to the recipient.

Coding expenditures in the general ledger above the allocation amount puts the LEA at risk for requesting overpayments and subsequently violates CMIA.

Expenditures coded in the GL as paid with federal funds must match the monthly payment transmittal.

Federal expenditures coded to state/local need journal voucher to federal sources within three days.

Responsibility of the LEA to document administrative expenses claimed as an interest offset.

Cash Management

NEW – LEA must have written procedures to implement the requirements of minimizing the time elapsingthe requirements of minimizing the time elapsing between receipt and expenditure of federal funds.

NEW ‐ Interest amounts up to $500 may be retained by LEA for administrative purposes.

12

Cash Management

GENERAL LEDGER

MONTH: 06/2015 FISCAL YEAR: 2015

Current Month YTD Total

41 = EXPENDITURES PAID WITH PART B FUNDS 55,961 416,407

42 = EXPENDITURES PAID WITH ECSE FEDERAL FUNDS 4,218 4,218

00 = EXPENDITURES PAID WITH STATE FUNDS 39,181 235,475

01 = EXPENDITURES PAID WITH LOCAL FUNDS 7,352 59,882

106,712 715,983

Equipment Management

Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a technology systems) having a useful life of more than one year and aper‐unit acquisition cost which equals or exceeds $1,000. The following items are subject to the inventory management and contract requirements:

1. Equipment items with an acquisition cost of $1,000 or more per unit.

2. Items with an acquisition cost under $1,000 per unit which are considered attractive or easily pilfered.

2CFRPart200.33

13

Equipment Management

Purchases are consistent with the approved application

Used to supplement and not supplant non‐federal funds Used to supplement and not supplant non federal funds

Property Records are maintained and up‐to‐date

Maintains inventory list with ALL required components

Used for its intended purpose

Controls/safeguards are in place to prevent loss, damage or theft

Physical inventory conducted at least once every two years Physical inventory conducted at least once every two years

Adequate maintenance procedures to keep the property in good condition

Prior approval must be obtained for equipment and capital outlay purchased federal funds

Property Record Components

Property Records/Inventory List must be maintained and include:

Description of the propertyp p p y

Serial number or other identification number

NEW ‐‐ Funding source of property (Including FAIN)

Who holds the title, if applicable

Acquisition date

Cost of the property

Percentage of federal participation in the project costs for the Federal award under which the property was acquired

Location, use and condition of the property

Any ultimate disposition data including the date of disposal and sale price of the property.

14

Equipment Disposition

When equipment acquired under a Federal award is no longer needed for the original project or program the LEA must dispose of the equipment as follows:

Items with current per unit fair market value of $5,000 or less may be retained, sold or otherwise disposed of with no further obligation.

Items with current per unit fair market value in excess of $5,000 may be retained by the LEA or sold.

Proper sales procedures must be established to ensure the highest ibl tpossible return.

2CFRPart200.313(d)(1)

Supplies

Anything that is not equipment is considered supplies.

“Significant Technological Devices” Significant Technological Devices

NEW: Computing devices

Machines used to acquire, store, analyze, process, public data and other information electronically.

Includes accessories for printing, transmitting and receiving or storing electronic informationstoring electronic information.

Computing devices are supplies if less than $1,000.

2CFRPart200.314

15

Supplies

Must maintain effective control and accountability.

Must adequately safeguard all such property Must adequately safeguard all such property.

Procurement Standards

Procurement standards apply to the purchase of supplies, equipment, and other services funded in whole or in part by federal grant funds. and other services funded in whole or in part by federal grant funds.LEA must:

Use its own written procurement procedures which reflect applicable Federal, State, and local laws and regulations.

Maintain oversight to ensure performance

Maintain written standards of conduct covering conflicts of interest Maintain written standards of conduct covering conflicts of interest

2CFRPart200.318

16

Procurement Standards Continued

Maintain written standards of conduct covering organizational conflicts of interest.conflicts of interest.

Avoid acquisition of unnecessary or duplicative items.

Maintain records sufficient to detail the history of procurement. The records will include: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.j

Be responsible for the settlement of all contractual and administrative issues arising out of procurements.

Method of Procurement

The LEA must use one of the following methods of procurement or be more restrictive with their policies:more restrictive with their policies:

Micro‐purchase up to $3,000

Small purchase $3,000 to $150,000

Competitive sealed bids

Competitive proposals

Noncompetitive proposals

2CFRPart200.32

This will not take effect until July 1, 2016.

17

Time and Effort

Compensation for personal services are allowable to the extent they satisfy specific requirements:satisfy specific requirements:

Is reasonable for the services rendered and conforms to the established written policy of the LEA consistently applied to both Federal and non‐Federal activities.

Follows an appointment made in accordance with the LEA’s laws or written policies.

Is determined and supported by appropriate documentation.

2CFRPart200.430

18

Time Distribution Records

If federal funds are used for salaries, then time distribution records are required. *are required.

Must be allocable; demonstrate that the employee worked on that specific federal program cost objective.

Time and Effort Requirements:

Semi‐annual certification

Personnel Activity Report Personnel Activity Report

Substitute System Certification & Fixed Schedule

Written Agreement

Time Distribution – Schoolwide Pool

Schoolwide Programs … Guidance says that time and effort depends upon if the district combines funds into a single account.upon if the district combines funds into a single account.

If school consolidates Federal, State and local funds in a single account, not required to file single funding certification

If school does not consolidate funds into a single account, must complete single funding certification or time & effort log for federal employees.

19

Time and EffortDetermining the type of Time and Effort documentation needed

20

Personnel Activity Report (PAR)

Documentation Required:

Reflect an after‐the‐fact distribution Reflect an after the fact distribution

Account for the total activity

Be prepared at least monthly and coincide with one or more pay periods

Must be signed after‐the‐fact by the employee

At least quarterly, the actual time reflected on the PAR must be q y,compared to the payroll charges, then payroll adjustments must be made if differences exist

Substitute System Certification & Fixed Schedule Option for employees with multiple cost objectives with fixed

schedules, in lieu of PARsschedules, in lieu of PARs

LEA must first complete and submit for approval a management certification form

Reflect an after‐the‐fact distribution

Account for the total activity

Must be signed after the fact by the employee and a supervisor Must be signed after‐the‐fact by the employee and a supervisor

At least semi‐annually

21

Written Agreement –Stipend & Extra Duty PayDocumentation Required:

Indicates the extra work to be performed Indicates the extra work to be performed

Date(s) of performance

Amount to be paid to the employee

Must be signed by the employer and the employee to show the acceptance of the terms

AND

Semi‐Annual Certification or PARs

ESEA ProvisionsESEA Provisions

22

Supplement/Supplant Requirements

An LEA shall use Federal funds received under ESEA/NCLB programs only to supplement the funds that would, in the absence of such only to supplement the funds that would, in the absence of such Federal funds, be made available from non‐Federal sources for the activities authorized under the individual programs, and not to supplant such funds.

Supplement-Not-Supplant

KEY Question: What would have happened in the absence of federal funds?federal funds?

LEA cannot use federal funds to pay for services, staff, programs, or materials that would otherwise be paid with state or local

funds.

23

ESEA/NCLB Maintenance of Effort

LEA’s combined fiscal effort per student or the aggregate expenditures of the LEA from state and local funds for free public education for the preceding year is not less than 90 percent of the combined fiscal effort or aggregate expenditures for the second preceding year.

The Annual Secretary of the Board (ASBR) report captures the data needed to calculate NCLB MOE in ePeGS.

24

Waiver of Fiscal Requirements

Maintenance of Effort – USED Secretary may waive the requirements if it is determined that a waiver would be equitable due to exceptional and uncontrollable circumstances, such as a natural disaster; or a precipitous decline in the financial resources of the LEA.

If the LEA wishes to request a waiver, they would notify the Department and submit documentation to substantiate their request.

Title I.A Provisions

a. Each eligible district receives the allocated amount of funds indicated on Step 4 of the BOA and current building level budgets and on Step 4 of the OA and current building level budgets andexpenditures correspond to the BOA.

b. Targeted Assistance school services are used only by participating students.

c. Carryover provision and records supporting 9/30 Report.

d Comparability of Services written guidance (LEAs with overlappingd. Comparability of Services written guidance (LEAs with overlapping grade spans)

25

Title I Breakdown of Allocations – Step 4

Title I Comparability of Services

LEAs having multiple attendance areas serving same or similar grade spans must demonstrate compliance with comparability requirements annually.

State and local funds used to provide services in Title I schools are at least comparable to services provided in schools not receiving Title I funds.

If an LEA doesn’t meet Comparability requirements, the result is the loss of all Title I funds. No waiver available.

26

IDEA ProvisionsIDEA Provisions

Proportionate Share

• Proportionate Share is the portion of the district/LEA’s IDEA Part B federal funds that must be reserved and spent to provide services to private, parochial and home schooled students with disabilities in the district’s boundaries.

• Districts/LEAs must maintain the following documentation to support Proportionate Share expenditures:

Student Roster

Home‐School Declarations

Service Plans

E l ti Evaluations

Consultation/Refusal of Services

• Districts/LEAs must track Proportionate Share expenditures separately in the general ledger using function code 1224.

• Child find and evaluation costs may not be charged to Proportionate Share.

27

Proportionate Share• Districts/LEAs must prorate the salary/benefits for any staff

providing services to both public school students andproviding services to both public school students and Proportionate Share students.

• Salaries/Benefits may be prorated based on:

• Head Counts

• Caseload Minutes

Documentation to indicate how the Proportionate Share costs were• Documentation to indicate how the Proportionate Share costs were prorated must be maintained.

Proportionate Share

• Any unexpended Proportionate Share funds must be shown as a remaining balance in the FER gridremaining balance in the FER grid

• Unexpended Proportionate Share funds carryover to the next fiscal year. If funds are not expended in 2nd year, the district/LEA may request a release of funds.

• Approval must be requested for the release of Proportionate Share carryover fundscarryover funds

• Proportionate Share carryover funds may only be released for allowable reasons

28

Proportionate Share

• ProportionateShareObligation&CarryoverFunds

Proportionate Share

644,279.81 - 627,783.13 = 16,496.68

29

Proportionate Share

EXAMPLE 1: FUNDS CAN BE RELEASED

Carryover Amount (from previous year) $2,385.81

Minus Estimated Current Year Expenditures ‐ $10.00

Amount To Be Released $2,375.81

EXAMPLE 2: FUNDS CAN NOT BE RELEASED

Carryover Amount (from previous year) $2,385.81

Minus Estimated Current Year Expenditures ‐$3,000.00

Amount To Be Released ($614.19)

*No Funds Available to Release

Maintenance Of Effort

• Maintenance of Effort (MOE) is the amount of STATE and/or LOCAL funds a district/LEA spends on the special education programfunds a district/LEA spends on the special education program.

• Only expenditures geared specifically towards special education are required to be counted towards MOE.

• District/LEAs must be able to distinguish expenditures paid with federal , state AND local funds in the general ledger.

Beginning FY15→ district/LEA will report all state and local• Beginning FY15→ district/LEA will report all state and local

expenditures separately in ePeGs.

30

Maintenance Of EffortMETHOD DESCRIPTION EXAMPLE

FEDERAL Project/Source A code is designated as a special education Function‐Object‐SourceFEDERAL Project/SourceCode

A code is designated as a special education federal expenditure and is attached to the end of the accounting code structure.

Function Object Source1221‐6100‐41

STATEProject/Source Code

A code is designated as a special education state expenditure and is attached to the end of the accounting code structure.

Function‐Object‐Source1221‐6100‐00

LOCAL Project/Source Code

A code is designated as a special education local expenditure and is attached to the end of the accounting code structure.

Function‐Object‐Source1221‐6100‐01

The use of project/source codes within the general ledger is the only means for determining which funding source (federal, state, or local) paid the expenditure.

Maintenance Of Effort

State MOE Amounts (designated by “00” project/source code).Local MOE Amounts (designated by “01” project/source code).

31

PAT KAISERDIRECTOR

FEDERAL FINANCIAL MANAGEMENT (ESEA/NCLB)pat kaiser@dese mo gov

ANGIE NICKELLDIRECTOR

SPECIAL EDUCATION FINANCE

[email protected]

SPECIAL EDUCATION FINANCE

[email protected]

1

GASB 68 Pension Disclosures for PSRS/PEERS EmployersEmployers

Presentation Headline

1

Presenters

• Lori Woratzeck, CPA – Chief Financial Officer

• Anita Brand, CPA – Director of Investment Accounting and Operations

2

2

Disclaimer

• We are NOT experts on the new GASB pension standards and likely will not be able to answer all of your questionsquestions.

• The following information is based on our understanding of the pension reporting requirements in GASB 68. As such it is subject to interpretation errors and subsequent clarifications by authoritative literature.

3

Public School and Education Employee Retirement Systems of Missouri

• PSRS and PEERS are separate defined benefit pension plans.PSRS covers full time and certain part time certificated• PSRS covers full-time and certain part-time certificated employees of participating employers.

• PEERS covers non-certificated employees and certain part-time certificated employees.

• Both plans are mandatory cost-sharing multiple employer plans.

4

3

Plan Member Statistics as of June 30, 2014

PSRS PEERSPSRS

• 54,486 benefit recipients

• 89,619 active and inactive participants

PEERS

• 25,029 benefit recipients

• 61,804 active and inactive participantsparticipants participants

5

Plan Financial Statistics as of June 30, 2014

PSRS PEERS• Net Position: $34,380,608,560

• Member account balances: $6,985,665,067

• Fiscal year investment return: 16.9%

• Net Position: $3,846,322,886

• Member account balances: $949,343,801

• Fiscal year investment return: 16.9%

• Pre‐funded ratio:

• Market basis ‐ 89.3%

• Actuarial basis ‐ 82.8%

• Pre‐funded ratio:

• Market basis – 91.3%

• Actuarial basis – 85.1%

6

4

GASB 68 Effective Date

• Accounting and Financial Reporting for Pensions –Employer ReportingEffective for fiscal years beginning after June 15 2014• Effective for fiscal years beginning after June 15, 2014

• Employers with a fiscal year end of June 30 will implement by June 30, 2015

7

Effects on PSRS/PEERS Employers

Impact on financial statements• Proportionate share of Net Pension Liability

• Proportionate share of total pension expense and deferred inflows/outflows

• No changes in calculation of contribution rate

R i d Di lRequired Disclosures• Expanded

• Required Supplementary Information

8

5

Responsible Parties

•Audited Schedule of Employer

PSRS/PEERS

Audited Schedule of Employer Allocations• Expected to be available 6/1/2015

•Audited Schedule of Pension Amounts by Employer• Expected to be available 6/1/2015

9

• Expected to be available 6/1/2015

• Sample footnote disclosures• We have sample to share today

• Expected to be provided by 6/1/2015 as well.

Responsible Parties

Employer Responsibilities

• Employers are solely responsible for their financial statements

• Reconciliation of payroll system to census data submitted to PSRS/PEERS

• 30 employers have yet to respond

10

• Employer auditors

• Responsible for the audit opinion

• Determining sufficiency of audit evidence

6

Current Year Procedures

• GASB Questionnaire and Reconciliation requested from each employer.

Have approximately 30 districts who have yet to respond– Have approximately 30 districts who have yet to respond.

• Random on-site visits to 10 employers.• Preparation of employer level schedules and sample

footnotes.• Audit of all of the above by our external auditors.

– Currently in progress.

• Production of audited employer level schedules and sample footnote disclosures

11


GASB Reconciliation and Questionnaire

• Questionnaire – Designed to gain an understanding of how each employer reports data to PSRS/PEER and determines eligibility participants and salary.

• Common concerns/issues

• Reconciliation – designed to reconcile reported retirement salary to taxable salary.

U f F 941 i li f W 3/W 2 d t fi l

12

• Use of Form 941s in lieu of W‐3/W‐2 due to fiscal year.

• Will be required Annually

• Modifications based on first year “lessons learned”.

• Expected to be in the Fall of each year.

7


d

•Had a couple of districts volunteer

• All others were random

• Criteria utilized

d f l d

Random On‐site Visits

13

• Guidance of external auditors

Q&A

14

1

ATTENDANCEREPORTINGANDVERIFICATION

1

VERIFICATION

Presented by:

Jennifer Jordan, Director, School Finance

Missouri Departmentof Elementary and Secondary EducationMay 2015

Tammy Lehmen, School Finance Consultant

Data to be Discussed2

What Hours can be Claimed for AttendanceR l Att d H C d C H Vi t l C HRegular Attendance Hours Correspondence Course Hours Virtual Course Hours

Homebound Instruction Hours School Flex Program Hours COE Hours

Sheltered Workshop Hours Remediation Hours Summer School & ESY Hours

What Hours Cannot be Claimed for AttendanceAttendance Recovery College Visit Credit Recovery

Early Dismissal of Seniors MAP Testing Out-of-School SuspensionEarly Dismissal of Seniors MAP Testing Out of School Suspension

Poor Attendance Days Zero (“0”) Hours Non-Allowable Summer School Courses

Other TopicsAttendance Reporting Rules Calendar Options & Requirements

2

Attendance Hours

CoreDataManualdefinesattendancehoursas:

3

ResidentI‐ Numberoffull‐timeorpart‐timeattendancehoursforResidentstudentsincludingstudentswhoattendanalternativeschooloranareavocationalschoolpartoftheday.

And

ResidentII‐ Numberoffull‐timeandpart‐timeattendancehoursofstudentssenttoanotherdistrictorapprovedprivateschoolforwhomtheresidentdistrictpaidfulltuition(notjustlocaltaxeffort).

Attendance Hours Claimed for State Aid

RegularAttendanceHours‐ Hoursofattendanceduringthe time a student is scheduled to be in class when they

4

thetimeastudentisscheduledtobeinclasswhentheyareunderthesupervisionofacertifiedinstructor(instructorisphysicallypresent).

ComputerBasedCourses ‐ Hoursofattendanceastudentiscompletingcomputerbasedcourseworkatwhileoffschoolcampusbutaresupervisedbyacertifiedinstructor (instructor is physically present).instructor(instructorisphysicallypresent).

3


VirtualCourses‐ Hoursofattendanceduringthetimeastudentistakingavirtualcoursewhileonaschoolcampusand

5

g punderthesupervisionofacertifiedinstructor(instructorisphysicallypresent).

VirtualCoursesTakenoffCampus‐ UponCompletionofcourse ‐ 94%ofwhattheattendancehoursitwouldtaketocompleteacourseiftakingthecourseinseatifastudentistakingavirtualcoursewhileoffcampus(fromhome).

VirtualCoursesTakenoffCampus‐ Upononly50%completionofcourse – 47%ofwhattheattendancehoursitwouldtaketocompleteacourseiftakingthecourseinseatifastudentistakingavirtualcoursewhileoffcampus(fromhome).

Innocasecanmorehoursthanafull‐timestudentbeclaimedforstudentstakingvirtualcourses.


HomeboundInstruction‐ Fullattendancecanbeclaimed if a student has received a minimum of 5

6

claimedifastudenthasreceivedaminimumof5hoursofinstructionperweekbyacertificatedteacher(SundaythruSaturday). Studentmusthaveaphysicianapprovedmedicalreasonthatwouldrequirethestudenttoreceivehomeboundservices.

Iftheschoolweekisashortweek(lessthana5dayweek)5hoursofinstructionmuststillbeprovidedtocountastudentinfullattendanceforthatweek.

4


SchoolFlexProgram‐ Fullattendanceforstudentsparticipating in the School Flex program as long as they:

7

participatingintheSchoolFlexprogramaslongasthey: Attendtwoinstructionalhoursperdayand; Provideevidenceofenrollmentandattendanceatacollegeortechnicalschoolor;

Provideevidenceofemploymentthatisalignedwiththestudent’s“careeracademicplan”tototalaregularh l dschoolday.

ClassAttendance+CollegeorTechSchoolAttendanceorEmploymentHours=RegularSchoolDayHours


CooperativeOccupationalEducation(COE)‐ Hoursofattendance when students participate in Department‐

8

attendancewhenstudentsparticipateinDepartmentapprovedprogramsthatareadequatelysupervisedbythedistrict’scertificatedteacherstotheextentthestudentscanbeconsidered“undertheguidanceanddirectionofteachers”andforwhichtheschooldistrictisgrantinghighschoolcredit. Oneofthecourserequirementsistospendapartoftheschoolq p pdayinanemploymentsituationisconsidereda“full‐time”studentiftheon‐campusinstructionplustheemploymentequalsorexceedstheregularschoolday. Ifastudentisleavingpriortothecompletionoftheschooldayforemploymentotherthanvocationallyapprovedsupervisedoccupationalexperienceprogramstheyareapart‐timestudent.

5


IEPStudentWorkinginaShelteredWorkshop ‐who has an Individual Educational Plan (IEP) that

9

whohasanIndividualEducationalPlan(IEP)thatindicatesthestudentistoobtainskillsassessment,training,and/orworkexperienceatalocalshelteredworkshopmaybecountedinattendanceforthetimespentworkingplusthetimeintheclassroom,nottoexceedtheregularschooldayofthedistrict. IftheIEPdoesnotcontainthisdirection,thestudentmayonlybecountedforattendanceandmembershipforthepartofthedaythestudentisreceivingclassroominstruction.


RemediationHours– Attendancehoursoutsidethetraditionalschooldayareforthosestudentsrequiring

10

remediationasaconditionforpromotiontothenextgradelevelbasedonthedistrictdevelopedpolicytoidentifysuchstudents.

RemediationHours‐ RemediationoutsidetheregularschooldayforstudentsscoringbelowbasiconMAPorbelowbasiconEOCmaybecountedforadditionalyattendancehoursiftheremediationrelatestotheMAPcurriculararea.

http://dese.mo.gov/sites/default/files/sf‐AAttendanceReporting.pdf

6


SummerSchoolHours‐ Actualsummerschoolattendance and membership hours for students attending

11

attendanceandmembershiphoursforstudentsattendinganapprovedsummerschoolprogram. Mustbepartofanapprovedsummerschool.

Attendancecannotbemandatoryexceptforstudentpromotionconditionedonremediation.

Studentcanonlyattendonedistrictduringanyonesummer.

CreditRecoveryhourscanbecompletedaspartofthesummerschoolprogram and those attendance hours can be counted for state aidprogramandthoseattendancehourscanbecountedforstateaid.

ExtendedSchoolYearHours‐ Extendedschoolyearhoursforspecialeducationandrelatedservicesthatareprovidedbeyondthenormalschoolyear,inaccordancewiththechild’sIEP,atnocosttoparentsofthechild,andmeetthestandardsoftheStateEducationAgency.

Attendance Hours NOT Allowed to be Claimed for State Aid

AttendanceRecovery‐ Thereisnoallowanceinstatestatute that would allow for the make‐up of attendance

12

statutethatwouldallowforthemake upofattendancehours.Aschooldistrictmayrequireastudenttomake‐uptimeforexcessiveabsences;however,thisdoesnotallowthedistricttocountthosehoursasattendancehoursforthestudent.

CollegeVisits– Astudentthatisabsentfromschooltogoto an independent college visit will be counted as absenttoanindependentcollegevisitwillbecountedasabsentduringthetimethattheyareawayfromschool.WhiletheschooldistrictmayallowthisasanexcusedabsencethistimeisstillreportedasabsencehourswhenreportedinMOSIS.

7


CreditRecovery– Aschooldistrictmayallowastudentto make‐up credits; however, there is no provision to allow

13

tomake upcredits;however,thereisnoprovisiontoallowthedistricttocountthosehoursasattendanceforthestudentduringtheregularschoolterm.

EarlyDismissalofSeniors – Adistrictmaydismissseniorsbeforethelastdayofschoolbutthestudentsaregraduatedasoftheirlastdayofattendanceandnoattendance and absent hours are reported from that pointattendanceandabsenthoursarereportedfromthatpointon.


MAPTesting ‐ DuringMAPtesting,somedistrictsmaychoose to release students who are not involved in the

14

choosetoreleasestudentswhoarenotinvolvedinthetestingprocess(suchasseniors),allowsomestudentsnotinvolvedinthetestingprocesstocometoschoollate,allowstudentstocometoschoolatthetimeofthetest,etc.Whilethedistrictmaymakesuchdecisions,thedistrictcannotcountthestudentasbeinginattendanceduringthosehoursthestudentwasabsent.

Out‐of‐SchoolSuspension‐ Anystudentservinganout‐of‐schoolsuspensionisnotreceivinginstructionalservicesand,therefore,shouldbereportedasabsent,orinthecaseoflongtermsuspensionsexitedfromthedistrict.

8


PoorAttendanceDays – Districtsarerequiredtoreportall hours of student attendance and absence. There is no

15

allhoursofstudentattendanceandabsence.Thereisnoallowanceinstatestatutetodropadayofschoolduetopoorattendanceandmakethatdayupwithanotherday.Ifthedistrictattendedschoolthedaymustbereportedunlessitdidnotmeettheminimumdaylengthtocountasadayofschoolaccordingtostatestatute.

Zero (“0”) Hour ‐ The attendance of students taking a Zero( 0 )Hour Theattendanceofstudentstakingaclassinazero(“0”)hourisnotincludedintheattendancereportedforstateaidsincethatzerohourisnotpartofthedistrict’scalendarhoursinsession.


ExcusedAbsences‐ Adistrictmayhavepoliciesallowing an excused absence for various

16

allowinganexcusedabsenceforvariouspurposessuchasillness,religiousbeliefs,testing,etc,however,thereisnoauthoritytogiveattendancecreditforstudentsneitherinattendancenorunderthedirectsupervisionofacertificated teachercertificatedteacher.

9


SummerSchoolCoursesnotallowedtobeclaimedforstate aid.

17

stateaid.NotEligibletobeClaimedforStateAid

AthleticpracticesBodyconditioning,weight‐lifting,football,orotherteam

sportsprograms

PEcoursethatdoesnotqualifyforcreditcountingtowards

graduation

Gymnastics,Tennis,Swimminglessons,TeamSports

ProgramFullyFundedbyFederalMonies

SummerCamps (recreational,sport,music,band,danceetc.)

Cheerleadingclinics Recreationprograms

Tuition‐basedactivities Studyhall ComputercampsCollegeorUniversity

Orientation

Fee‐basedactivities(schoolorprovider)

PEclasseswithoutcredittowardsgraduation

Band/vocal/instrumentalmusicpracticesorcamps

Community‐basedpublic,privateorothernon‐academic

programsSummerPrograms offeredbyCommunity‐widepublicand

privateagencies

ActivitiesthatstudentsareabletoenrollandparticipateinindependentlyoftheLEA

Day‐CareServicesEducationalcourse/ActivitythatisnotofferedbytheLEAduringtheregularschoolyear.

Verification of Data

Mustknowthreethingstoverifythevalidityofattendance data

18

attendancedata.

1. Childwasenrolledinthedistrictatsomepointduringtheyear.

2. Whoshouldbereportingtheattendancehours. SeeExhibit21– StudentResidencyStatusintheCoreDataand

MOSISManual

3. Actualcalendarofdistrictforeachbuildingandgradelevel.

10


ResidentI – Studentsattendingschoolinthedistrict(includingDYS,MSB,MSDandSSSH)wheretheyreside(reportedbythedistrictwheretheyareenrolled).

19

RegularStudents‐‐ (Including:Employee'schild,Fosterchild,Homelesschild,VoluntaryTransferStudent(VTS))

CharterSchools

JobCorpSites(Federallyoperatedprogram)

JuvenileDetentionCenters(publiclyplaced)

StudentsreceivingSpecialEducationServicesinSt.LouisCounty‐‐ St.LouisCountyComponentDistricts(CountyDistrictCodeBeginswith096)‐‐ St.LouisSpecialSchoolDistrict(SSD)SelfContainedBuildingsp ( ) g‐‐ St.LouisSpecialSchoolDistrict(SSD)VocationalSchoolFullTimeStudents

StateOperatedSchools‐‐ DivisionofYouthServices(DYS)‐‐ MissouriSchoolfortheBlind(MSB)‐‐ MissouriSchoolfortheDeaf(MSD)‐‐ MissouriStateSchoolfortheSeverelyHandicapped(SSSH)


ResidentIIPublic ‐‐ Studentsresidinginonedistrictbutattendingschoolinanotherdistrictforwhichtheresidentdistrictispayingfulltuition(reportedbythe district where they are enrolled)

20

thedistrictwheretheyareenrolled).

HighSchoolstudentsfromK‐8Districts

StudentsfromUnaccreditedSchoolDistricts

ResidentIIPrivate ‐‐ Studentsresidinginonedistrictbutattendingschoolinanotherapprovedfacilityforwhichtheresidentdistrictispayingfulltuition(reportedbytheresidentdistrict).

Studentsattendingaprivatefacility

Cooperative Agreements – A negotiated payment structure is in place. (District CooperativeAgreements Anegotiatedpaymentstructureisinplace.(DistrictwherestudentattendsprovidesthedatatothedistrictofresidencewhichthenreportsthedatatoDESEasResidentIstudents.)

Alternativeschoolprogram;

SpecialEdCoops/SpecialEdCollaborative

StudentsattendingAreaCareerCenterPrograms

OtherCooperativeAgreements

11


PayingTuition ‐‐ StudentsattendingschoolinadistrictotherthanwheretheyresideasaresultoftheirParent/Guardianpayingtuition.(Note:Districtsd t i St t Aid f St d t th t t id t ) ( t d b th

21

donotreceiveStateAidforStudentsthatarenotresidents)– (reportedbythedistrictwheretheyareenrolledasParentTuition).


Comparetotalhoursreportedperstudent(attendance plus absent hours) to the total calendar

22

(attendanceplusabsenthours)tothetotalcalendarforthatstudentsbuildingandgradelevel. Ifstudentwasenrolledallyearandafull‐timestudentthetotalhoursshouldbethesameasthecalendar.

Compare attendance percentage (total attendance Compareattendancepercentage(totalattendancehoursdividedbytotalhours)toprioryearattendancepercentages. Follow‐uponratesthatappeartoohighortoolow.

12


Compareremediationhourstoprioryears.F ll diff

23

Followuponanypercentagedifferencegreaterthan10to15percent.

Comparesummerschoolattendancehourstoverifytheyfallwithinareasonablerangeofpossiblesummerschoolhours.Mi i 60 i 419Minimum60maximum419.

Inclement Weather

InclementWeather,forthepurposeofthissection,shallbedefinedasice,snow,extremecold,flooding,oratornado,butsuchtermshallnot

24

includeexcessiveheat.

Daysmissedforreasonsotherthaninclementweatherhavetobemadeup

Districtsarerequiredtomakeupthefirst6dayslostduetoinclementweatherandarerequiredtomakeupthe7th dayandareforgiventhe8th,requiredtomakeupthe9th andforgiventhe10th andsoforthuntil10dayshavebeenmadeup

Specificinformationandfrequentlyaskedquestionsregardinginclementweathercanbelocatedathttp://dese.mo.gov/divadm/finance/topicsandprocedures/documents/sf‐InclementWeather.pdf

13

School Calendar Options

1. Atraditionalcalendarmaybeadoptedwhichrequirestheschoolboardtoprovideaminimumtermofatleast174daysand1,044hoursofinstruction,171 031 1 RSM

25

171.031.1,RSMo

a. Minimumrequiredhoursinaschooldayof3hoursperSection160.041.1,RSMo

b. Maximumpossiblehoursinaschooldayof7hoursperSection171.031.7,RSMo

2. Acalendaroflessthan174daysmaybeadoptedbytheschoolboardthatprovidesaminimumofatleast1,044hoursofinstruction,171.029.1,RSMo

a Minimum required hours in a school day of 4 hours per Sectiona. Minimumrequiredhoursinaschooldayof4hoursperSection160.041.1,RSMo

b. Maximumpossiblehoursinaschooldayof8hoursperSection171.031.7,RSMo

School Calendar Options

3. Acalendarof142days(fourdaysperweek)maybeadopted by the school board that provides a minimum of

26

adoptedbytheschoolboardthatprovidesaminimumofatleast1,0444hoursofinstruction,171.031.1,RSMoa. Minimumrequiredhoursinaschooldayof4hoursperSection

160.041.1,RSMob. Maximumpossiblehoursinaschooldayof8hoursperSection

171.031.7,RSMo

14

School Calendar

Thereisadayrequirement Three calendar options that have been discussed

27

Threecalendaroptionsthathavebeendiscussed

Districtscannotoperateunderhoursonly

DistrictswillreporttheplannedcalendartothedepartmentbyAugust15ofeachyear

Oncethetypeofcalendarhasbeenestablishedbythedistrictthenumberofdaysofplannedattendancecan’tbechangedchanged

Districtsplannedcalendarswillbeusedwhendeterminingifadistricthasgonetherequirednumberofdaysinayear

School Calendar

Aschooldayendingbeforetheminimumrequiredhourson class time does not count toward the day requirement

28

onclasstimedoesnotcounttowardthedayrequirementandthehoursdonotcounttowardthe1,044hourrequirement Thedayisnotalegalday

Thehoursanddaydonotcountforstateaidpurposes

Hoursarenotreportedasapartoftheschooldistrict’scalendarandtheattendancehoursarenotreportedfortheADApcalculationforstateaidpurposes

15

Why Do We Care

BasicFormulaCalculationA f l l i A D il A d

29

AfactortocalculatingAverageDailyAttendance.NumbercaninfluenceBasicFormulamoniesreceivedbythedistrict.

FederalandStateAccountability.

[email protected]

573‐751‐0357

Contact Us30

1

How the Changes to Single Audits and

Federal Grant Rules Impact You

Overview and History of the Super Circular

Agenda

Changes to Single Audit Requirements

Changes to Federal Cost Principles

Changes to Administrative Requirements

Action Steps for Entities Receiving Federal Action Steps for Entities Receiving Federal Grants

2

2

Overview and History of the Super Circular

Rules associated with federal grants are overseen by the Office of Management and

Background

overseen by the Office of Management and Budget (OMB), which is part of the executive branch of the federal government

OMB issues “Circulars” which set forth the various rules governing federal awards and

dit f f d l daudits of federal awards

4

3

Historically, Single Audit requirements have been located in OMB Circular A 133

Background

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

Guidance has been complicated and difficult to understand

Background

to understand

Cost principles differ between the three cost circulars

Thus, OMB undertook a major project to overhaul and streamline federal award overhaul and streamline federal award guidance

6

4

Streamline the federal grant-making process

Project Objectives

Increase the efficiency and effectiveness of federal programs

Ease administrative burden for grant applicants

Eliminate unnecessary and duplicative i trequirements

7

Focus on areas that achieve better outcomes at a lower cost

Project Objectives

at a lower cost

Reduce the risk of waste, fraud and abuse

8

5

October 2011 – Council of Financial Assistance Reform (COFAR) established

Project Timeline

Reform (COFAR) established

February 28, 2012 – Advance Notice of Proposed Guidance issued—contained preliminary ideas OMB was considering and was subject to public comment

9

January 31, 2013 – Proposed OMB Uniform Guidance issued contained more refined

OMB Super Circular

Guidance issued—contained more refined, specific proposed OMB regulations and was also subject to public comment

December 26, 2013 – Uniform Administrative Requirements, Cost Principles, and Audit R i t f F d l A d i dRequirements for Federal Awards issued—represents final document containing final regulations

10

6

Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal

OMB Super Circular

Principles, and Audit Requirements for Federal Awards is codified into Title 2, Part 200, of the Code of Federal Regulations

Referred to as the “Super Circular”, “Omni Circular” or “Uniform Guidance”

11

Circulars Replaced or Modified by Super Circular

12

7

Federal agencies must implement the requirements by December 26 2014

Effective Dates

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

i d ft D b 26 2014issued on or after December 26, 2014

13

New Single Audit requirements are effective for fiscal years beginning on or after December 26

Effective Dates

fiscal years beginning on or after December 26, 2014

Thus, first effective for December 31, 2015 fiscal year ends

Early implementation is not permittedEarly implementation is not permitted

14

8

Subpart A: Sets forth definitions and acronyms used throughout document

Structure of Super Circular

used throughout document

Subpart B: General provisions including purpose of guidance, its applicability, and effective date

Subpart C: Administrative requirements Subpart C: Administrative requirements directed at federal agencies related to pre-award activities and content of federal awards

15

Subpart D: Administrative Requirements including procurement internal control and

Structure of Super Circular

including procurement, internal control, and subrecipient monitoring

Subpart E: Cost Principles guidance previously found in Circulars A-21, A-87 and A-122

Subpart F: Single Audit requirements previously Subpart F: Single Audit requirements previously found in Circulars A-133 and A-50

16

9

Questions

17

Changes to Single Audit Requirements

10

Single Audit threshold increased from $500,000 to $750 000

Changes to Single Audit Threshold

to $750,000

It is estimated that approximately 5,000 entities will be relieved from Single Audit requirement as a result

Entities below this threshold must still make Entities below this threshold must still make records available for review or audit by federal agencies, pass-through entities, and the Government Accountability Office

19

Determine Type A programs vs. Type B programs

Major Program Determination Steps

programs

Determine high-risk/low-risk Type A programs

Determine high-risk/low-risk Type B programs

Select programs to audit as major

Determine that adequate percentage of coverage has been achieved

20

11

Currently, for entities expending < $100 million in federal awards programs with greater than

Changes to Major Program Determination

federal awards, programs with greater than $300,000 in expenditures or 3% of total expenditures are considered “Type A” Makes it more likely they will be selected as major Have to be audited as major at least once every

three yearsthree years

Super Circular increases the Type A threshold to $750,000

21

Currently, Type A programs are considered high risk (and therefore must be audited as major) if:


risk (and therefore must be audited as major) if: Program was NOT audited as a major program in one

of the two preceding years; OR In the most recent year audited, the program had

findings

22

12

The Super Circular makes a Type A program high risk if in the most recently audited period


high risk if, in the most recently audited period, the program: Did not receive an unqualified opinion; Had a material weakness in internal control; Had questioned costs exceeding 5% of the program’s

expendituresexpenditures

23

Currently, threshold for performing risk assessment of Type B programs is $100 000 or


assessment of Type B programs is $100,000 or 0.3% of total federal expenditures

The Super Circular changes the Type B risk assessment threshold to 25% of the Type A threshold

24

13

Under current guidance, the high-risk Type B programs selected as major must be:


programs selected as major must be: ½ of the high-risk Type B programs, OR One high-risk Type B for each low-risk Type A

The Super Circular changes the first criteria to ¼ of the low-risk Type A programsyp p g

25

Under current guidance, % of federal dollars that must be audited as major is:


that must be audited as major is: 50% for high-risk entities 25% for low risk entities

Under the Super Circular, % of federal dollars that must be audited as major is:j 40% for high-risk entities 20% for low risk entities

26

14

Currently, an entity is a low risk auditee if:Single Audits were performed in each of the past two

Changes to Low-Risk Auditee Criteria

Single Audits were performed in each of the past two years Unqualified opinions on the financial statements and

SEFA in past two years No material weaknesses in internal control in the past

two yearstwo years No material noncompliance or questioned costs >5%

of expenditures for a given award in past two years

27

The Super Circular includes modifications to this, such as:

Changes to Low-Risk Auditee Criteria

such as: 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

28

15

Currently, a Single Audit finding is required if known or likely questioned costs exceed

Findings

known or likely questioned costs exceed $10,000

The Super Circular increases this threshold to $25,000

Must include a description of how questioned Must include a description of how questioned costs were calculated

29

Findings will now include a perspective section, indicating whether finding is isolated or systemic

Findings

indicating whether finding is isolated or systemic and the type of sampling used

Repeat findings must be identified as such and prior year finding number provided

Summary schedule of prior audit findings must Summary schedule of prior audit findings must include financial statement findings also, and provide a reason why findings recurred

30

16

Proposed OMB Uniform Guidance issued on January 31 2013 by the OMB suggested a

Compliance Requirements

January 31, 2013 by the OMB suggested a reduction of the types of compliance requirements from 14 to 6

31


32

17

Changes to Compliance Requirements have been deferred and will be considered as part of


been deferred and will be considered as part of the annual Compliance Supplement process 2015 Compliance Supplement is expected to be

published in April 2015 Will include changes as a result of the Super Circular,

and any changes to compliance requirementsy g p q

33

New federal audit clearinghouse (FAC) web-site became effective starting with fiscal year

Federal Audit Clearinghouse Submission Reminders

site became effective starting with fiscal year 2013 submissions

The FAC web-site began accepting fiscal year 2014 submissions on October 20, 2014

34

18

FAC website has posted notices indicating that the following requirements will be effective with

Federal Audit Clearinghouse Submission Reminders

the following requirements will be effective with submissions made on or after January 2, 2015: Must use new standard finding numbering system

(2014-001 through 2014-999) Audit submissions must be unlocked, unencrypted

and in a text-searchable PDF format

35

Questions

36

19

Changes to Federal Cost Principles

Indirect Cost Rates

Cost Principles– Key Changes

Time and Effort Reporting

Other Miscellaneous Changes

38

20

Non-federal entities have the option to extend negotiated indirect cost rate for up to four

Indirect Cost Rates

negotiated indirect cost rate for up to four years Only allowed once per negotiated rate cycle Approval of cognizant agency is required There must be no major changes to the entity’s

indirect costsindirect costs Cannot negotiate rate during the extension period

39

Entities that have never had a negotiated indirect cost rate may utilize a minimum flat rate

Indirect Cost Rates

indirect cost rate may utilize a minimum flat rate of 10% Only available if entity receives less than $35 million in

federal funding per year Must keep documentation of this decision on file

40

21

Pass-through entities required to either:Honor the indirect cost rate negotiated by a

Indirect Cost Rates

Honor the indirect cost rate negotiated by a subrecipient at the federal level Negotiate a rate with the subrecipient in accordance

with federal guidelines Provide a minimum flat rate

41

Big picture changes:Greater flexibility in time and


Greater flexibility in time and effort reporting Focuses on internal controls

that should be in place to justify salaries and wages, and provides latitude in meeting h d dthose standards

Personnel activity reports encouraged but no longer required

42

22

Records supporting salaries and wages must:Be supported by a system of internal control which


Be supported by a system of internal control which provides reasonable assurance that charges are accurate, allowable, and properly allocated Be incorporated into the entity’s official records Reasonably reflect the total activity for which the

employee is compensated, not exceeding 100% of employee is compensated, not exceeding 100% of compensated activities

43

Records supporting salaries and wages must:Comply with the established accounting policies and


Comply with the established accounting policies and practices of the entity Support the distribution of the employee’s salary or

wages among specific activities or cost objectives

44

23

Budget estimates determined before services are performed:


are performed: Do NOT qualify as support for payroll costs May be used for interim accounting purposes under

certain circumstances if trued up later

45

Use of percentages and estimates:Records may reflect distribution of time as a


Records may reflect distribution of time as a percentage as opposed to by hours Rules acknowledge that some estimates are

necessary to allocate time between teaching, research, service and administration in an academic setting

46

24

If records meet the requirements described above entities will not be required to provide


above, entities will not be required to provide any additional support or documentation for the work performed

If records do NOT meet the requirements described above, the federal government may

i l ti it t tifi ti require personal activity reports, certifications, or equivalent documentation

47

For non-exempt employees, records indicating the total number of hours worked each day are


the total number of hours worked each day are still required pursuant to Department of Labor regulations

The regulations encourage cognizant agencies to approve alternative proposals based on

t il t f outcomes or milestones for program performance. If approved, these would be an acceptable alternative for the time and effort reporting requirements.

48

25

In an effort to encourage entities to have family friendly policies the following costs are

Dependent Care Costs for Conferences

family-friendly policies, the following costs are allowable: For hosts of conferences, the cost of identifying (but

not providing) locally available child-care resources Temporary dependent care costs that result directly

from travel to conferences

49

The annual and final fiscal reports or vouchers requesting payment under a federal award

Required Certifications

requesting payment under a federal award must include a certification

Certification must be signed by an official that can legally bind the organization

50

26

“By signing this report, I certify to the best of my knowledge and belief that the report is true,

Certification Language

knowledge and belief that the report is true, complete, and accurate, and the expenditures, disbursements and cash receipts are for the purposes and objectives set forth in the terms and conditions of the Federal award. I am aware that any false, fictitious, or fraudulent information, or the omission of any material fact, may subject me to

i i l i il d i i t ti lti f f d criminal, civil or administrative penalties for fraud, false statements, false claims or otherwise. (U.S. Code Title 18, Section 1001, and Title 31, Sections 3729-3730 and 3801-3812).”

51

Section 200.407 of the Super Circular provides one location that entities can consult for all

Other Requirements

one location that entities can consult for all circumstances in which prior approval from the federal awarding agency is required.

Increases the threshold to $50 million from $25 million for filing a cost-accounting disclosure t t t f l b th f di statement for approval by the funding agency

52

27

For fiscal years beginning on or after January 1, 2016 financing costs associated with patents

Other Requirements

2016, financing costs associated with patents and computer software are allowable

Note that the cost principles included in Subpart E do not include cost principles for hospitals. OMB has indicated that these will be

dd d t l t d tadded at a later date.

53

Questions

54

28

Changes to Administrative Requirements

Procurement Requirements

Administrative Requirements – Key Changes

Contractor vs. Subrecipient Determination

Pass-Through Entity Responsibilities

Internal Control

Property StandardsProperty Standards

Interest Earned on Advances

Personally Identifiable Information

56

29

The Super Circular defines five methods of procurement to be used:


procurement to be used: Micro purchases – less than $3,000 (or $2,000 for

construction subject to Davis Bacon) Small purchases – $3,000 to $150,000 (the Simplified

Acquisition Threshold) Sealed bid purchases – Over $150 000; preferred for Sealed bid purchases Over $150,000; preferred for

construction

57

The Super Circular defines five methods of procurement to be used:


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

58

30

All five procurement types must comply with the Procurement Standards in section 200 318:

All 5 Procurement Type Compliance

the Procurement Standards in section 200.318: (1) the purchase complies with the non-Federal

entity’s documented procedures in place, (2) purchases are necessary, (3) open competition (to the extent required by each

method) method), (4) conflict of interest policy and (5) proper documentation for the purchases.

Purchase orders may be awarded without soliciting competitive quotations if costs are

Micro Purchases

soliciting competitive quotations if costs are considered reasonable by the entity

To the extent possible, purchases must be distributed equitably among qualified suppliers

60

31

Price or rate quotations must be obtained from an adequate number of qualified sources

Small Purchases

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

61

Bids are publicly solicited

Sealed Bid Purchases

Firm, fixed price contract awarded to lowest responsible bidder

Invitation for bids must be publicly solicited providing sufficient response time before the bid openingbid opening

Invitation must include necessary specifications for the bidder to properly respond

62

32

Bids are opened at the time and place prescribed in the invitation for bids

Sealed Bid Purchases

prescribed in the invitation for bids

Any and all bids may be rejected if there is a sound documented reason

63

Complete, adequate, and realistic specification or purchase description is

Conditions Necessary for Sealed Bid Purchases

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 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

64

33

Used when conditions are not appropriate for sealed bids

Competitive Proposal Purchases

sealed bids

Requests for proposals are publicized and identify evaluation factors

Proposals solicited from an adequate number of qualified sourcesof qualified sources

Must use written method for conducting technical evaluations of the proposals received

65

Contracts awarded to the responsible firm whose proposal is

Competitive Proposal Purchases

responsible firm whose proposal is most advantageous to the program, with price and other factors considered

For architectural and engineering i it i t bl t services, it is acceptable to

evaluate competitors’ qualifications, select the most qualified, and then negotiate a fair and reasonable price

66

34

Only permitted when one or more of the following circumstances apply:

Noncompetitive purchases

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 proposalsf li i i f b f i i After solicitation of a number of sources, competition

is determined inadequate

67

The Procurement “Claw”

68

35

The Federal government will provide a grace period after the effective date for non federal

Grace Period

period after the effective date for non-federal entities to comply with the procurement standards For one full fiscal year after the effective date of the

Super Circular. For the non-Federal entity’s first full fiscal year that For the non Federal entity s first full fiscal year that

begins on or after December 26, 2014, the non-Federal entity must document whether it is in compliance with the old or new standard, and must meet the documented standard.

For example, the first full fiscal year for a non-Federal entity with a June 30th year end would be the year

Grace Period

entity with a June 30th year end would be the year ending June 30, 2016. 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 the super circular.

36

The Super Circular procurement standards do not apply to procurements made in indirect

Methods of Procurement and Indirect Costs

not apply to procurements made in indirect cost areas. They apply to procurements for goods and services that are directly charged to a Federal award. Example: Super Circular procurement would not have

to be followed when hiring a plumber to fix a broken g ppipe in the headquarters building

The term “contractor” replaces the term “vendor” going forward

Contractor vs. Subrecipient

vendor going forward

The Super Circular provides guidance to differentiate between contractor and subrecipient

Must look to substance of the award, not Must look to substance of the award, not merely titles used

72

37

A subaward is for the purpose of carrying out a portion of the Federal Award

Subrecipient

portion of the Federal Award

Creates a Federal assistance relationship with the subrecipient

73

Determines who is eligible to receive assistance

Characteristics of a Subrecipient

Has its performance measured against objectives of a federal program

Has a responsibility for programmatic decision making

M t dh t f d l i tMust adhere to federal program requirements

Uses funds to carry out a program for a public purpose

74

38

A contract is for the purpose of obtaining goods and services for entity’s own use

Contractor

goods and services for entity s own use

Creates a procurement relationship with the contractor

75

Provides goods/services within normal business operations

Characteristics of a Contractor

operations

Provides similar goods/services to many purchasers

Normally operates in a competitive environment

Provides goods/services ancillary to program

Not subject to federal compliance requirements

76

39

The Super circular requires that pass-through entities clearly communicate that an award is


entities clearly communicate that an award is federal in origin and specifies data elements that pass-through entities must provide to subrecipients.

77

Data to communicate to subrecipients:Subrecipient name


Subrecipient name Subrecipient DUNS number Federal Award Identification Number (FAIN) Federal Award Date Subaward Period of Performance Start and End Date Amount of Federal Awards Obligated by This Action

78

40

Data to communicate to subrecipients:Total Federal Awards Obligated to Subrecipient


Total Federal Awards Obligated to Subrecipient Total Amount of Federal Award Federal award project description Federal Award Date Name of Federal Awarding Agencyg g y Name of Pass-Through Entity Contact Name For Awarding Official

79

Data to communicate to subrecipients:CFDA Number and Name


CFDA Number and Name Identification of Whether the Award is R&D Indirect Cost Rate for The Award (including if the de

minimis rate is used)

80

41

The Super Circular requires entities to perform risk assessment procedures over subrecipients


risk assessment procedures over subrecipients to determine the appropriate level of subrecipient monitoring necessary

81

Pass-through entities must monitor subrecipients by:


by: Reviewing financial and programmatic reports

required by the pass-through entity Ensuring timely and appropriate action is taken to

resolve all deficiencies pertaining to the federal award identified through audits and on-site reviews Issuing a management decision for audit findings

pertaining to the federal award

82

42

Pass-through entities must monitor subrecipients by:


by: Provide training to subrecipients as necessary Performing on-site reviews as necessary Arranging for agreed-upon procedures engagements

as necessaryif h h b i i h Si l di Verify that each subrecipient has a Single Audit

performed if required to do so

83

The Super Circular explicitly requires that entities establish and maintain effective internal control

Internal Control

establish and maintain effective internal control that provides assurance that an entity is managing federal awards in compliance with federal statutes, regulations, and terms and conditions of federal awards

M h li it th t t l t d Much more explicit than current grant-related requirements

84

43

The Super Circular states that an entity’s internal controls “should” be in compliance with:

Internal Control

controls should be in compliance with: GAO’s Standards for Internal Controls in the Federal

Government (Green Book) COSO’s Internal Control Integrated Framework

COFAR’s Q&A document issued in August 2014 clarifies that “should” in this context means these frameworks are best practices, not a prescriptive requirement

85

Computers are considered to be supplies (not equipment) if acquisition cost is below the lesser

Property Standards

equipment) if acquisition cost is below the lesser of $5,000 or the client’s capitalization threshold

Equipment no longer needed for federal award with fair market value < $5,000 may be retained, sold or disposed of with no further

bli ti t th f d l di obligation to the federal awarding agency

86

44

For equipment no longer needed for federal award with fair market value > $5 000 the entity

Property Standards

award with fair market value > $5,000, the entity must request disposition instructions from the federal awarding agency

If no disposition instructions within 120 days, entity may sell or dispose of the equipment

Federal agency is entitled to its proportional share of fair market value or sales proceeds

87

Threshold below which interest earnings may be retained increased from $250 to $500

Interest Earned on Advances

retained increased from $250 to $500

All required interest earning remittances must be remitted annually to specific Department of Health and Human Services address Previously, entities were required to remit this interest

“ tl ” t h f d l di “promptly” to each federal awarding agency

88

45

Super Circular defines protected PII first name or first initial and

Personally Identifiable Information (PII)

PII—first name or first initial and last name in combination with: Social security number Passport number Credit card number Clearances Bank numbers

89

Specifies protected PII—first name or first initial in last name in combination with:


in last name in combination with: Biometrics Date or place of birth Mother’s maiden name Criminal, medical and financial records Educational transcripts

90

46

Requires entities to take reasonable steps to safeguard protected PII


safeguard protected PII

Requires that auditee certify that there is no protected PII in submitted Single Audit reporting package

91

Questions

92

47

Action StepsAction Steps

Determine that your procurement procedures are in compliance with the Super Circular

Action Steps to Prepare for Implementation of Super Circular

are in compliance with the Super Circular

Determine that your time and effort reporting system is in compliance with the Super Circular

Evaluate whether you will request an indirect cost rate extension or use the 10% de minimis raterate

Using the new criteria in the Super Circular, make contractor vs. subrecipient determinations

94

48

Determine whether you are providing subrecipients the required information and that


subrecipients the required information and that you are performing required monitoring steps

Evaluate your internal control structure—does it measure up to COSO and/or the Green Book?

Determine that your financial reporting system Determine that your financial reporting system tracks and captures all necessary data for federal awards

95

Evaluate property purchased with federal funds will you dispose of any of it given the


funds—will you dispose of any of it given the new guidelines?

Ensure required certifications are in place for annual and final reports and identify certifying official

Evaluate the impact of the changes to Single Audit requirements, and determine the status of prior year audit findings

96

49

Verify that your Single Audit report will meet the latest FAC requirements for finding numbering


latest FAC requirements for finding numbering and text searchability

Determine that you have appropriate internal controls in place to safeguard PII

97

Questions

98

1

FINANCIALANDADMINISTRATIVE

SERVICESSERVICES

AuditReportDeskReviews

MissouriDepartmentofElementaryandSecondaryEducationMay5,2015

Preliminary Review

PreliminaryReviewI d d t A dit ’ R t IndependentAuditor’sReport Scopeoftheaudit ConductedinaccordancewithauditingstandardsgenerallyacceptedintheUSA

Theappropriateopinionparagraphforthebasisofaccounting

l S d FinancialStatementsandNotes Government‐wideFS FundFinancialStatements(General,SpecialRevenue,DebtService,andCapitalProjects)

2

Preliminary Review cont.

FinancialStatementsandNotescont. Indication of fraud or significant event in the notes Indicationoffraudorsignificanteventinthenotes GASB54compliance

ReportonInternalControlOverFinancialReportingandComplianceandothermattersbasedonanAuditofFinancialStatementsPerformedinAccordancewithGovernmentAuditingStandards

ReportonCompliancewithStateRequirements ScheduleofSelectedStatistics

Preliminary Review cont.

SingleAudit(ifapplicable) Report on Compliance with Requirements Applicable to ReportonCompliancewithRequirementsApplicabletoEachMajorProgramandonInternalControlOverComplianceinAccordancewithOMBCircularA‐133

ScheduleofExpendituresofFederalAwards ScheduleofFindingsandQuestionedCosts Iffindings,thenacorrectiveactionplanmustbesubmittedsubmitted

Other Auditreportiscomplete(signedanddatedbyfirm)

3

Selection Process for Desk Reviews

About25reportsareselectedfordeskreviewl d h l Unusualitemsnotedinthepreliminaryreviewput

thereportonthelistasacandidateforreview.Theseitemscouldinclude:NewCPAfirm UnusuallanguageintheOpinionorStateComplianceRReport

Accrualsincashbasisstatements BudgettoActualmissingforDSandCapProj.fundsNoGASB54MissingaStatement

Overview of Desk Review

Thedeskreviewisamorein‐depthtechnicalreview of the audit report itselfreviewoftheauditreportitself.

ThechecklistsforthedeskreviewswereadaptedfromtheAICPAPeerReviewchecklists.

Eachdistrict(notcharter)selectedreceivesthe“AuditReport”checklistreview.

Eachcharterselectedreceivesthe“Not‐for‐Profit”checklistreview.

4

Overview of Desk Review cont.

Eachdistrict/charterselectedwithasingleauditreceives the “Single Audit” checklist reviewreceivesthe SingleAudit checklistreview.

Oncethechecklistsarecompleted,aletterissenttotheCPAFirmtoadvisethemoftheresultsofthedeskreview.

Ideally,thisprocessshouldbecompletedbyJune30sothatsuggestionstotheauditorscanbeincorporatedintotheirnextyear’sauditreports.

Audit Report Checklist

Fewchangestothedeskreviewprocessbeginning with the FY14 auditsbeginningwiththeFY14audits

NoteDisclosures Accrualdisclosuresarelistedinthechecklist Cashbasisreportsthatdonotincludeadisclosurewon’tbemarkasanerror

l d h d l h l l Includeenoughdisclosuresthereportsusersclearlyunderstandthefinancialstatements

5

Audit Report Checklist cont.

Separatesectionsjustliketheauditreport: Independent Auditor’s Report IndependentAuditor sReport SupplementaryInformationintheAuditor’sReport SEFAinIndependentAuditor’sReport FinancialStatementPresentationManagementDiscussion&Analysis BudgetaryComparisonSchedulesg y pNoteDisclosures ReportingonInternalControlandCompliance ViewsofResponsibleOfficials


#20e.Measurementfocusandbasisofaccounting applied to the government wideaccountingappliedtothegovernment‐widepresentationsandthefundfinancialstatements.(pg.6)

#20f.Thegovernment’spolicyregardingwhetheritconsidersrestrictedorunrestrictedamo nts to ha e been spent hen anamountstohavebeenspentwhenanexpenditureisincurredforpurposesforwhichbothrestrictedandunrestrictedfundbalanceisavailable.(pg.6)

6


#21c.Depositspoliciesregardingcustodialcredit risk and foreign currency risk or acreditriskandforeigncurrencyrisk,orastatementthattheentityhasnosuchpolicies.(pg.6)

#22c.Investmentrisksdisclosures:(pg.7) Investmentpoliciesrelatedtorisk Creditqualityratingofinvestments(ifapplicable) Custodialcreditriskforinvestments Interestrateriskofdebtinstruments


#23.Beginningandendofyearcapitalassetsbalances separated between historical cost andbalancesseparatedbetweenhistoricalcostandaccumulateddepreciation.(pg.7)

Beg.Inc.Dec.EndingCapitalBal.Bal.Assets$1,000$250$500$750 #29f.Riskmanagementandrelatedfinancingactivitiesand/orpublicentityriskpool(pg.9)

7


#29g.Descriptionofterminationbenefitarrangements significant methods andarrangements,significantmethodsandassumptionsusedtodetermineterminationbenefitsexpenseandliabilities,and,ifnotidentifiableonthefaceofthefinancialstatements,thecostsofterminationbenefitsinthe period obligated (pg 9)theperiodobligated.(pg.9)

Single Audit Checklist

#3d.Notesdescribingsignificantaccountingpolicies in preparing the SEFA (pg 5)policiesinpreparingtheSEFA(pg.5)

#7b.Doesthesummaryofauditor’sresultssectionoftheSFQCcontainastatementthatsignificantdeficienciesormaterialweaknesses,orboth,ininternalcontrolweredisclosedbythea dit of financial statements if applicableauditoffinancialstatements,ifapplicable.(pg.8)

8

Single Audit Checklist cont.

#10.Doestheauditfindingdetailinclude:(pg 10)(pg.10) Referencenumber FederalprogramandspecificfederalawardidentificationincludingCFDAtitleandnumber

FederalawardnumberandyearN f f d lNameoffederalagency

Ifapplicable,nameofpass‐throughentity Appropriateelements Viewoftheresponsibleofficials

Single Audit Checklist Draft-FY16

UpdatingthischecklistfornewOMNIregulationsregulations Addingnewregulations References

9

Charter Schools Checklist

#11a.&12b.Grossamountsofrevenues&expenses (including those for special events thatexpenses(includingthoseforspecialeventsthatareongoingandmajoractivities),andinvestmentrevenuesarereportedeitherinthefootnotesoronthefaceofthefinancialstatements.(pg.7)

Auditor Correspondence

TallyuptheresultsofthechecklistC b d d Combinedistrictsperauditor

Issuealetternotifyingauditorofresults Ideally,thisprocessshouldbecompletedbyJune30sothatsuggestionstotheauditorscanbeincorporatedintotheirnextyear’sauditreports.

10

Questions

Contact

ToniWade,[email protected] 751 9437

Contact

573‐751‐9437

Preliminary Review Checklist District_________________ Fiscal year 2014

1 Revised 03/2014

Independent Auditor’s Report

Y N N/A

1. Includes a statement describing the scope of the audit?

2. Includes a statement that the audit was conducted in accordance with auditing standards generally accepted in the USA and the standards applicable to financial audits contained in GAS issued by the Comptroller General of the US?

3. Includes an opinion as to whether the FS present fairly, in all material respects, the financial position of the district for the period then ended in conformity with accounting principles generally accepted in the USA? (GAAP reports only)

4. Includes a paragraph that (1) states the basis of presentation and refers to the

note to the FS that describes the basis and (2) states that the basis of

presentation is an OCBOA? (OCBOA reports only)

5. Includes a paragraph that expresses the auditor’s opinion on whether the FS are

presented fairly, in all material respects, in conformity with the basis of

accounting described? (OCBOA reports only)

Financial Statements and Notes to the Financial Statements

1. Includes government‐wide financial statements?

▪ Statement of Net Assets/Financial Position

▪ Statement of Activities

2. Includes fund statements for the General, Special Revenue, Debt Service, and

Capital Projects funds?

▪ Balance Sheet

▪ Statement of Revenues, Expenditures, and Changes in Fund Balances

▪ Budget to Actuals (not applicable to charter schools)

3. Financial statements or notes do not indicate deficit balances or overdrafts?

4. Notes to the Financial Statements do not indicate fraud, embezzlement, or

other significant event?

5. Financial statements and notes comply with GASB 54? (Not applicable to

charters)


2 Revised 03/2014

Y N N/A

Includes Report on Internal Control Over Financial Reporting and Compliance and

other matters based on an Audit of Financial Statements Performed in Accordance

with Government Auditing Standards?

Single Audit

1. Includes Report on Compliance with Requirements Applicable to Each Major

Program and on Internal Control Over Compliance in Accordance with OMB

Circular A‐133?

2. Includes Schedule of Expenditures of Federal Awards and Summary of Auditor’s

Results?

3. If federal findings or questioned costs, was a corrective action plan submitted?

Report on Compliance with State Requirements

1. Includes the auditor’s opinion regarding the district’s conformance to the

budgetary and disbursement requirements of Chapter 67, RSMo? (not

applicable to charter schools)

2. Includes the auditor’s opinion regarding the attendance and transportation

records?

3. Includes the current version of the Schedule of Selected Statistics?

Other

1. If a charter school, a single entity report completed on a July 1 to June 30 fiscal

year?

2. Audit report was signed and dated by CPA firm and appears to be complete? (if

not, considered a draft report)

Review Date ____________ Reviewer __________________________

Comments_____________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________


3 Revised 03/2014

______________________________________________________________________________

______________________________________________________________________________

Recommendation Accept Reject

Date District Contacted _________________

1

DESE School Audit Report Checklist‐FY14 Updated for New Clarified Standards Independent Auditor’s Report Yes No N/A 1. Does the report have a title that includes the word

“independent” to clearly indicate that it is the report of an independent auditor? [AU-C700.24 and .A18]

2. Does the introductory paragraph of the report: a. Identify the entity whose financial statements have been

audited and state that the financial statements have been audited?

b. Identify the title of each statement that the financial statements comprise, which may be achieved by referencing the table of contents? [AU-C 700.25 and .A22-.A23; AAG-SLV 14.14]

c. Specify the date or period covered by each financial statement that the financial statements comprise? [AU-C 700.25 and .A20-.A23]

3. Does the report describe management’s responsibility for the preparation and fair presentation of the financial statements, including an explanation that management is responsible for:

a. The preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework?

b. The design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error? [AU-C 700.27 and .A24; AAG-SLV 14.18]

4. Does the report include a section with the heading “Auditor’s Responsibility” and state that the responsibility of the auditor is to express an opinion on the financial statements based on the audit? [AU-C 700.29-.30; AAG-SLV 14.19]

5. Does the report state that the audit was conducted in accordance with GAAS and identify the United States of America as the country of origin? [AU-C 700.31 and .A27-.28; AAG-SLV 14.20]

6. Does the report state that GAAS requires the auditor to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements? [AU-C 700.31 and .A27-.28]

7. Does the auditor’s report describe an audit by stating that: a. An audit involves performing procedures to obtain audit

evidence about the amounts and disclosures in the financial statements?

b. Procedures selected depend on the auditor’s judgment,

2

including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error?

c. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control, and accordingly, no such opinion is expressed?

d. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management, as well as the overall presentation of the financial statements? [AU-C 700.32]

8. Does the audit’s report state whether the auditor believes that the audit evidence the auditor has obtained is sufficient and appropriate to provide a basis for the auditor’s opinion (s)? [AU-C 700.33]

9. When expressing unmodified opinion(s) on the government’s basic financial statements, does the auditor’s opinion state the financial statements present fairly, in all material respects, in accordance with the applicable financial reporting framework and its origin? [AU-C700.19-.20, .35 and .A29; AAG-SLV 14.04, and .22]

10. If the auditor addresses other reporting responsibilities in the auditor’s report on the financial statements in addition to the auditor’s responsibility under GAAS to report on the financial statements, are those other reporting responsibilities addressed in a separate section titled “Other Reporting Required by Government Auditing Standards”? [AU-C 700.37 and .A32-.A33; AAG-SLV 14.23]

Supplementary information: 11. For supplementary information (SI): a. If the entity presented SI with the financial statements did

the auditor report on the SI in either (1) an other-matter paragraph following the opinion paragraph in the auditor’s report on the financial statements or (2) in a separate report on the SI? [AU-C 725.09]

b. Does the other-matter paragraph on SI or the separate report include the following as applicable:

i. A statement that the audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements?

ii. A statement that the SI is presented for purposes of additional analysis and is not a required part of the basic financial statements?

iii. A statement that the SI is the responsibility of management and was derived from, and relates

3

directly to, the underlying accounting and other records used to prepare the basic financial statements?

iv. A statement that the SI has been subjected to the auditing procedures applied in the auditor of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves and other additional procedures, in accordance with the applicable accounting framework?

v. A statement that, in the auditor’s opinion, the SI is fairly stated, in all material respects, in relation to the basic financial statements as a whole (when an unmodified opinion has been issued on the basic financial statements and the auditor has concluded the SI is fairly stated, in all material respects, in relation to the basic financial statements as a whole)?

vi. A statement that, in the auditor’s opinion, except for the effects on the SI of [refer to the paragraph in the auditor’s report explaining the qualification on the basic financial statements], such information is fairly stated, in all material respects, in relation to the basic financial statements as a whole (when an qualified opinion has been issued on the basic financial statements and the qualification has an effect on the SI)?

12. If a component unit is material to an opinion unit is not required to have an audit in accordance with GAS, has the auditor’s responsibility section of the report on the financial statements been modified to indicate the portion of the entity that was not audited in accordance with GAS? (If it is not evident from the financial statements to which opinion unit the component unit relates, the auditor should consider identifying the opinion unit in addition to the name of the component unit.) [AAG-SLV 4.75-.76]

13. Iftheauditorganizationreportstheseinternalcontrolandcompliancemattersinaseparatereportfromthereportonthefinancialstatements,didtheauditorganization:

a. Includeareferencetotheseparatereportsinthereportonthefinancialstatements?[GASpar.5.08]

b. IncludeastatementthatthereportsoninternalcontrolandcomplianceareanintegralpartofaGAGASauditandimportantinassessingtheresultsoftheaudit?[GASpar.5.09]

SEFA in Independent Auditor’s Report:

4

14. Isthereportonthescheduleofexpendituresincludedin(a)another‐matterparagraphpresentedinaccordancewithAU‐Csection706,Emphasis‐of‐MatterParagraphsandOther‐MatterParagraphsintheIndependentAuditor’sReportor(b)aseparatereportontheschedule?(SeparatereportingcanbeaccomplishedbyeitherincludingthereportinginthereportoncompliancewithrequirementsapplicabletoeachmajorprogramandoninternalcontrolovercomplianceinaccordancewiththeOmniCircularorbyreportinginaseparatestand‐alonereport).[AAG‐SLA7.18,13.11‐.12]

a. Ifinother‐mattersparagraph,anidentificationoftheSEFAasaccompanyingsupplementaryinformationbydescriptivetitleorbypagenumberreference.

b. AstatementthattheauditwasconductedforthepurposeofforminganopiniononthebasicfinancialstatementsandthattheSEFArequiredbytheOmniCircularispresentedforthepurposesofadditionalanalysisandisnotarequiredpartofthebasicfinancialstatements.

c. AnopiniononwhethertheSEFAisfairlystated,inallmaterialrespects,inrelationtothefinancialstatementstakenasawhole.

With Regard to Financial Statement Presentation for Content: 15. Theauditor'sevaluationofwhetherthefinancial

statementsachievefairpresentationinaccordancewiththeapplicablefinancialreportingframeworkrequiresconsiderationoftheoverallpresentation,structureandcontentofthefinancialstatementsandwhethertheyincludetherelatednotes,representstheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.[AU‐C800.A11]

16. Arethefinancialstatementssuitablytitled?[AU‐C800.15]

17. Ifthegovernmentalentitypresentationincludescomponentunits,dothepresentationsmeetthefollowingrequirements,whereapplicable:[GASB2600]

a. Componentunitsthatarefiduciaryinnaturehavebeenproperlyexcludedfromthegovernment‐widepresentationandonlyincludedinthefundfinancialstatements.[GASB2600.107]

b. Condensedfinancialstatementsformajorcomponentunitsinthecomponentunitscolumn(s)(Major

5

componentunitsmaybepresentedinoneofthefollowingthreemanners:(1)separatecolumnsintheentity‐widestatements;(2)combiningstatementsafterthebasicfundstatementsbeforethefootnotes;or(3)condensedfinancialstatementsinthefootnotes.)[GASB2300.107dand2600.108–.111]

Management’sDiscussionandAnalysis: 18. IsManagement’sDiscussionandAnalysis(MD&A)

included?(NotrequiredforspecialpurposefinancialstatementsbyGASBbuthighlyrecommendedbyDESE)[GASB34par.8andGASBCod.Sec.2200.106]

BudgetaryComparisonSchedules/Statements: 19. Doesthepresentationincludethefollowingbudgetary

information,whereapplicable:[GASB2200.181–.183and2400.102–.104]

a. Theoriginalbudget,finalbudget,andactualbalancesfortheauditperiod.[GASB2200.182and2400.102]

b. IfthebudgetaryinformationisdifferentfromGAAPorthebasisofpresentationinthebasicfinancialstatements,accompanyinginformationthatreconcilesbudgetaryinformationtoGAAP/OCBOAinformation(eitherinascheduleorinthenotestoRSI).[GASB2200.183and2400.103and.109–.119]

With Regard to Note Disclosures: (If accrual basis report a letter will be issued for the errors. If cash basis report no letter will be issued for errors since these are disclosures required for accrual basis reporting.)

Summary of Significant Accounting Policies Disclosures: 20. Arethedisclosuresadequateregardingthefollowing

significantaccountingpolicies:

a. Adescriptionofthegovernment‐widefinancialstatements,notingthatneitherfiduciaryfundsnorcomponentunitsthatarefiduciaryinnatureareincluded?[GASB34par.115(GASBCod.Sec.2300.106a)]

b. Adescriptionofcomponentunits,theirrelationshipstotheprimarygovernment,howtheyarereported(blendedordiscretelypresented)andthecriteriaforincludingcomponentunits,howtoobtainseparatefinancialstatementsforindividualcomponentunits,andtheeffectofcomponentunitswithdifferingfiscalyears?[GASB14par.61(GASBcod.Sec.2300.106aand2600.120)]

c. Definitionoftheprimarygovernmentandcomponentunitsthatmakeupthegovernmentalreportingentity

6

andthecriteriausedtodeterminethescopeofthereportingentity.[GASB2300.106aand2600.120]

d. Adescriptionoftheactivitiesaccountedforinthecolumnsformajorfunds,internalservicefunds,andfiduciaryfundtypespresentedinthebasicfinancialstatements.[GASB2300.106a(3)and1300.125]

e. Measurementfocusandbasisofaccountingappliedtothegovernment‐widepresentationsandthefundfinancialstatements.[GASB63par.8(GASBcod.Sec.2300.106a)]

f. Thegovernment’spolicyregardingwhetheritconsidersrestrictedorunrestrictedamountstohavebeenspentwhenanexpenditureisincurredforpurposesforwhichbothrestrictedandunrestrictedfundbalanceisavailable[GASB1800.155and.160c]

g. Thegovernment’spolicyregardingwhethercommitted,assigned,orunassignedamountsareconsideredtohavebeenspentwhenanexpenditureisincurredforpurposesforwhichamountsinanyofthoseunrestrictedfundbalanceclassificationscouldbeused.[GASB1800.155and.160c]

DepositsandInvestmentsDisclosures: 21. Arethefollowingdisclosuresadequateregarding

depositsandinvestments:

a. Disclosuresthatdistinguishbetweentheprimarygovernment,includingblendedcomponentunits,anditsdiscretelypresentedcomponentunits,ifpresented.Alsodiscussionoftheconcentrationofrisk.[GASBC20.104]

b. Legalorcontractualprovisionsaffectingdeposits,includinginterest‐earninginvestmentcontracts,suchasnonnegotiablecertificatesofdeposit,andanysignificantviolationsduringtheperiod.[GASBC20.106]

c. Depositpoliciesregardingcustodialcreditriskandforeigncurrencyrisk,orastatementthattheentityhasnosuchpolicies.[GASBC20.109–.110]

d. Ifapplicable,theamountofanydepositsatperiodendexposedtocustodialcreditrisk,andwhethersuchbalancesareuninsuredorexposedbaseduponhowthedepositcollateralisheld.[GASBC20.107]

7

22. Investments a. Legalorcontractualprovisionsaffectinginvestments,

includinganysignificantviolationsduringtheperiod.[GASBI50.124–.125]

b. Investmentdisclosuresorganizedbyinvestmenttype[GASBI50.123]

c. Thefollowingdisclosuresofinvestmentrisks:[GASBI50.126–.133]

—Investmentpoliciesrelatedtorisk—Creditqualityratingsofinvestmentswhere

applicable—Custodialcreditriskforinvestments—Concentration(5percentormore)riskofcertain

investments—Interestrateriskofdebtinstruments—Foreigncurrencyriskofinvestments

CapitalAssetsDisclosures: 23. Arethefollowingdisclosuresadequateregardingcapital

assets,ifapplicable:

a. Dothenotesdisclosethefollowinginformationaboutcapitalassets(includingintangibleassets),dividedintomajorclassesofcapitalassetsaswellasbetweenassetsassociatedwithgovernmentalactivitiesandthoseassociatedwithbusiness‐typeactivities,andbetweenassetsthatarenotbeingdepreciatedandthosethatarebeingdepreciated:[GASB34par.116(GASBcod.Sec.2300.111)]

—Beginningandend‐of‐yearbalancesseparatedbetweenhistoricalcostandaccumulateddepreciation

—Reportingperiodadditionsandsalesordispositions

—Reportingperioddepreciationexpense,withdisclosureoftheamountschargedtoeachofthefunctionsinthestatementofactivities

b. Themethodormethodsusedtocomputedepreciationforeachmajorclassofdepreciableasset.[GASB63par.8(GASB2300.106)]

c. Policiesforcapitalizingassetsandforestimatingtheusefullivesofthoseassets,andifapplicable,adescriptionofthemodifiedapproachforinfrastructure[GASB2300.106a(7),1400.102and.104].

Long‐TermLiabilitiesDisclosures:

8

24. Arethefollowingdisclosuresadequateregardingnotespayable,bondspayable,revenueorbondanticipationnotes,capitalleasespayable,andotherlong‐termliabilities,ifapplicable:[GASB34par.116(GASBcod.Sec.2300.111)]

a. Beginning‐andend‐of‐yearbalancesbytypeofliability. b. Increasesanddecreasesseparatelypresented. c. Theportionsofeachtypethatareduewithinoneyearof

thestatementdate.

25. Debtservicerequirementstomaturityincludingprincipalandinterestrequirementstomaturity,presentedseparatelyforeachofthefivesubsequentyearsandinfiveyearincrementsthereafter.[GASB38par.10(GASB2300.106mand1500.118)]

InterfundBalancesandTransfersDisclosures: 26. Arethefollowingdisclosuresadequateregarding

interfundbalancesandactivity,ifapplicable:

Forinterfundbalances:[GASB38par.14(GASBcod.Sec.2300.120)]

a. Amountsduefromotherfundsbyindividualmajorfund,nonmajorgovernmentalfundsintheaggregate,nonmajorenterprisefundsintheaggregate,internalservicefundsintheaggregate,andfiduciaryfundtype

b. Thepurposeofinterfundbalances c. Interfundbalancesthatarenotexpectedtoberepaid

withinoneyearfromthedateofthefinancialstatements

27. Forinterfundtransfersandactivity:[GASB38par.14(GASBcod.Sec.2300.121)]

a. Amountsduefromotherfundsbyindividualmajorfund,nonmajorgovernmentalfundsintheaggregate,nonmajorenterprisefundsintheaggregate,internalservicefundsintheaggregate,andfiduciaryfundtype.

b. Ageneraldescriptionoftheprinciplepurposesoftheinterfundtransfers.

c. Foreachmajorcomponentunit,thenatureandamountofany significanttransactionswithotherdiscretelypresentedcomponentunitsorwiththeprimarygovernment

EquityandReconciliationDisclosureRequirements: 28. Iftheinformationisnotapparentfromthefaceofthe

financialstatements,dothenotesdisclosethefollowingtotheextentapplicable,detailedexplanationsofthereconciliationsbetweenthefundandgovernment‐widefinancialstatements?[GASB1800.141–.146,2300.107cc,2200.119–.121,.154,

9

.158;AAG‐SLV10.08–.18and10.23] OtherDisclosureRequirements: 29. Ifmaterial,arethepresentationsappropriateandare

disclosuresadequateregardingthefollowingotherdisclosurerequirements:

a. Accountingchanges[CTA06] b. Annualpensioncost,netpensionobligationandother

pensionactivities,andotherplanandfundingdisclosuresforemployerreporting[GASB2300.106g,2300.107n,P20](Districtswiththeirownplans)

c. ForperiodsbeginningafterJune15,2007orforwhichGASB‐50,PensionDisclosures,hasbeenearlyimplemented,thelegalorcontractualmaximumcontributionsrates,fundingpolicydisclosures,andforsole‐andagent‐definedbenefitpensionplansthefundedstatusoftheplanasofthemostrecentactuarialvaluation[GASB50](DistrictsparticipatinginPSRSandPEERS)

d. Annualotherpostemploymentbenefits(OPEB)costs,netOPEBobligation(ifGASB45,AccountingandFinancialReportingbyEmployersforPostemploymentBenefitsOtherThanPensions,hasbeenimplemented),andotherplanandfundingdisclosuresforemployerreporting[GASB2300.107oandP50.105–.107]

e. Detailofthegovernment’spropertytaxcalendar,includingthelien,levy,dueandcollectiondates[GASBP70.109]

f. Riskmanagementandrelatedfinancingactivities[GASB2300.107aandC50.145–.146]and/orpublicentityriskpools[GASBPo20]

g. Descriptionofterminationbenefitarrangements,significantmethodsandassumptionsusedtodetermineterminationbenefitexpensesandliabilities,and,ifnotidentifiableonthefaceofthefinancialstatements,thecostsofterminationbenefitsintheperiodobligated[GASB2300.107hhandT25.114–.117]

h. Commitmentsunderoperatingleases[GASB2300.106jandL.20.124–.125]

WithRegardtoReportingonInternalControlandCompliancewithLaws,Regulations,andProvisionsofContractsorGrantAgreements:

30. Didtheauditor’sreportsoninternalcontrolandcomplianceandothermattersbaseduponanauditoffinancialstatementsperformedinaccordancewithGovernmentAuditingStandardsincludeallrequired

10

elementsasfollows?[AAG‐SLA4.54]

a. Astatementthattheauditorhasauditedthefinancialstatementsoftheauditeeandareferencetotheauditor’sreportontheentity’sfinancialstatementsand,ifapplicable,adescriptionofanydeparturesfromthestandardreport.[AAG‐SLA4.54b]

b. AstatementthattheauditwasconductedinaccordancewithGAASandanidentificationoftheUnitedStatesasthecountryoforiginofthosestandardsandwiththestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandardsissuedbytheComptrollerGeneraloftheUnitedStates.Note:IfthefinancialstatementsincludeorganizationalunitsthatwerenotrequiredtohaveaGASaudit,theauditorshouldconsidermodifyingthisscopestatement.

c. Astatementthatinplanningandperformingtheaudit,theauditorconsideredtheauditee’sinternalcontroloverfinancialreportingtodeterminetheauditingproceduresforthepurposeofexpressinganopiniononthefinancialstatements,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheauditee’sinternalcontrol;andaccordingly,doesnotexpressanopinionontheeffectivenessoftheauditee’sinternalcontrol?

d. Thedefinitionofcontroldeficiencyandsignificantdeficiencyand,ifapplicable,astatementthatdeficiencieswereidentifiedthatareconsideredtobesignificantdeficiencies.

e. Astatementthattheconsiderationofinternalcontrolwouldnotnecessarilydiscloseallmattersininternalcontroloverfinancialreportingthatmightbesignificantdeficienciesormaterialweaknesses.

f. Ifsignificantdeficienciesarenoted,astatementthatcertaindeficiencieswereidentifiedthattheauditorconsiderstobesignificantdeficiencies.

g. Ifapplicable,adescriptionofthesignificantdeficienciesidentified(includingtheviewsofresponsibleofficialsandtheirplannedcorrectiveaction)orreferencetoaseparatescheduleinwhichthesignificantdeficiencies,views,andplannedcorrectiveactionaredescribed.

h. Thedefinitionofamaterialweakness i. Ifnosignificantdeficienciesareidentified,astatement

thatnomaterialweaknesseswerenoted;or,ifsignificant

11

deficienciesarenoted,astatementaboutwhethertheauditorbelievesanyofthesignificantdeficienciesarematerialweaknesses.

j. Astatementthataspartofobtainingreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement,theauditorhasperformedtestsoftheentity’scompliancewithcertainprovisionsoflaws,regulations,contracts,andgrantagreements(noncompliancewithwhichcouldhaveadirectandmaterialeffectonthedeterminationoffinancialstatementamounts).

k. Astatementthattheobjectiveofthefinancialstatementauditisnottoprovideanopiniononcompliancewiththoseprovisions,and,accordingly,theauditordoesnotexpresssuchanopinion.

Note:Ifsufficientworkisperformed,GASpermits,butdoesnotrequire,auditorstoexpressanopiniononcompliance.Ifanopinionisexpressed,thestatementshouldbemodifiedaccordingly.

l. AstatementthatnoteswhethertheresultsoftestsdisclosedinstancesofnoncomplianceorothermattersthatarerequiredtobereportedunderGovernmentAuditingStandardsand,iftheyare,describesthematters(includingtheviewsofresponsibleofficialsandtheirplannedcorrectiveaction)orreferstotheseparatescheduleinwhichthenoncompliance,views,andplannedcorrectiveactionaredescribed.

m. Astatementthattheauditordidnotaudittheentity’sresponseandexpressesnoopiniononitiftheentity’sresponses(viewsofresponsibleofficialsandcorrectiveactionplan)tothefindingsareincludedinthereportortheseparatescheduleoffindings.

n. Astatementthatothermatters(thatis,(1)deficienciesininternalcontrolthatarenotsignificantdeficienciesand(2)immaterialviolationsofprovisionsofcontractsorgrantagreementsandimmaterialabuse,otherthanthosethatareclearlyinconsequential)werecommunicatedtotheentityinamanagementletter,ifamanagementletterwasissued.

o. Aseparateparagraphattheendofthereportindicatingthereportisintendedsolelyfortheinformationanduseofmanagementaswellasthosechargedwithgovernance,anyotherswithintheentity,and,ifapplicable,legislativeorregulatorybodiesandisnot

12

intendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.

p. Themanualorprintedsignatureoftheauditorganization

q. Thedateoftheauditor’sreportNote:BecausethereportoninternalcontroloverfinancialreportingandoncompliancerelatestotheauditofthefinancialstatementsandisbasedontheGAASauditproceduresperformed,itshouldcarrythesamedateastheauditor’sreportonthefinancialstatements.

WithRegardtoReportingViewsofResponsibleOfficials: 31. Forreportedfindingsrelatedtointernalcontrol

deficienciesorfraud,illegalacts,violationsofprovisionsofcontractsorgrantagreements,orabuse,didtheauditorganizationobtainandreporttheviewsofresponsibleofficialsaswellasplannedcorrectiveaction?[GAS4.33;AAG‐SLA4.63]

32. Iftheauditedentityrefusestoprovidecommentsorisunabletoprovidecommentswithinareasonableperiodoftime,doestheauditor’sreportstatethattheauditedentitydidnotprovidecomments?[GAS4.33‐.39;AAG‐SLA4.63‐.66]

Note:ThischecklistisderivedprimarilyfromthepronouncementsoftheGASBandtheAICPA.Fordetailedinformationconcerningtheserequirements,thereviewermaywishtoconsulttheauthoritativeliteratureoftheabovenotedorganizationsaswellastheAICPAPracticeAids,ChecklistsandIllustrativeFinancialStatementsforStateandLocalGovernments,andAuditingGovernmentalFinancialStatements:ProgramsandOtherPracticeAids.All“No”answersmustbethoroughlyexplained.

DESE Single Audit Report Checklist CoDist # For use with Single Audit reports

Yes No N/A

1

A‐133ComplianceReport:

1. Doesthereportoncompliancewithrequirementsapplicabletoeachmajorprogramandinternalcontrolovercompliancecontaintherequiredelements,asfollows:[AAG‐SLA13.31]

a. AstatementthattheauditorhasauditedthecomplianceoftheauditeewiththetypesofcompliancerequirementsdescribedintheOMBCircularA‐133ComplianceSupplement(ComplianceSupplement)thatcouldhaveadirectandmaterialeffectoneachofitsmajorprograms.

b. Atitlethatincludesthewordindependent

c. Identificationoftheperiodcoveredbythereport

d. Astatementthatcompliancewiththerequirementsoflaws,regulations,contracts,andgrantsapplicabletoeachoftheauditee’smajorfederalprogramsistheresponsibilityoftheauditee’smanagement,andthattheauditor’sresponsibilityistoexpressanopinionontheauditee’scompliancebasedontheaudit

e. AstatementthattheauditofcompliancewasconductedinaccordancewithGAASandanidentificationoftheUnitedStatesasthecountryoforiginofthosestandards(forexample,auditingstandardsgenerallyacceptedintheUnitedStatesorU.S.GAAS),thestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandardsissuedbytheComptrollerGeneraloftheUnitedStates,andCircularA‐133

f. AStatementthatthosestandardsandCircularA‐133requirethattheauditorplanandperformtheaudittoobtainreasonableassuranceaboutwhethernoncompliancewiththetypesofcompliancerequirementsthatcouldhaveadirectandmaterialeffectonamajorfederalprogramoccurred

g. Astatementthatanauditincludesexamining,onatestbasis,evidenceabouttheauditee’scompliancewiththoserequirementsandperformingsuchotherproceduresastheauditorconsiderednecessaryinthecircumstances

h. Astatementthattheauditorbelievesthattheauditprovidesareasonablebasisfortheauditor’sopinion

i. Astatementthattheauditdoesnotprovidealegaldeterminationoftheauditee’scompliancewiththoserequirements


Yes No N/A

2

j. Ifinstancesofnoncompliancearenotedthatresultinanopinionmodification,areferencetoadescriptionintheaccompanyingscheduleoffindingsandquestionedcosts,including

thereferencenumber(s)ofthefinding(s); anidentificationofthetypes(s)of

compliancerequirementsandrelatedmajorprogram(s);and

astatementthatcompliancewithsuchrequirementsisnecessary,intheauditor’sopinion,fortheauditeetocomplywiththerequirementsapplicabletotheprogram(s)

k. Anopiniononwhethertheauditeecomplied,inallmaterialrespects,withthetypesofcompliancerequirementsthatareapplicabletoeachofitsmajorfederalprogramsfortheyearended

l. Ifapplicable,astatementthattheresultsoftheauditingproceduresdisclosedinstancesofnoncompliancethataretobereportedinaccordancewithCircularA‐133andareferencetothescheduleoffindingsandquestionedcostsinwhichtheyaredescribed

ReportonInternalControlOverCompliance:

m. Astatementthattheauditee’smanagementisresponsibleforestablishingandmaintainingeffectiveinternalcontrolovercompliancewiththerequirementsoflaws,regulations,contracts,andgrantsapplicabletofederalprograms

n. Astatementthatinplanningandperformingtheaudit,theauditorconsideredtheauditee’sinternalcontrolovercompliancewiththetypesofrequirementsthatcouldhaveadirectandmaterialeffectonamajorfederalprogram,todeterminetheauditingproceduresforthepurposeofexpressinganopiniononcompliancebutnotforthepurposeofexpressinganopinionontheeffectivenessofinternalcontrolovercompliance

o. Astatementthattheauditor’sconsiderationofinternalcontrolovercompliancewasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliancethatmightbedeficiencies,significantdeficiencies,ormaterialweaknesses.Ifmaterialweaknessesininternalcontrolovercompliancehave


Yes No N/A

3

beenidentified,thisstatementisrevisedtoindicatethattheauditor’sconsiderationofinternalcontrolovercompliancewasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliancethatmightbesignificantdeficienciesormaterialweaknesses,andtherefore,therecanbenoassurancethatalldeficiencies,significantdeficiencies,ormaterialweaknessesininternalcontrolovercompliancehavebeenidentified.

p. Thedefinitionsofdeficiencyininternalcontrolovercomplianceandmaterialweaknessesininternalcontrolovercompliance.Ifapplicable,astatementthatdeficienciesininternalcontrolovercompliancewereidentifiedthatareconsideredtobematerialweaknessesandadescriptionofthematerialweaknessesininternalcontrolovercomplianceorareferencetotheaccompanyingscheduleoffindingsandquestionedcosts,includingthereferencenumber(s)ofthefinding(s).

q. Ifsignificantdeficienciesininternalcontrolovercompliancewereidentified,thedefinitionofsignificantdeficiencyininternalcontrolovercompliance,astatementthatdeficienciesininternalcontrolovercompliancewereidentifiedthatareconsideredtobesignificantdeficiencies,andadescriptionofthesignificantdeficienciesininternalcontrolovercomplianceorareferencetotheaccompanyingscheduleoffindingsandquestionedcosts,includingthereferencenumber(s)ofthefinding(s)

r. Ifnomaterialweaknessesininternalcontrolovercompliancewereidentified,astatementtheauditordidnotidentifyanydeficienciesininternalcontrolovercompliancethatareconsideredtobematerialweaknesses

s. Ifnosignificantdeficienciesareidentified,astatementthattheauditor’sconsiderationoftheinternalcontrolovercompliancewouldnotnecessarilydiscloseallmattersininternalcontrolthatmightbesignificantdeficienciesormaterialweaknesses;ifsignificantdeficienciesareidentified,astatementthattheauditor’sconsiderationoftheinternalcontrolovercompliancewouldnotnecessarilydiscloseallmattersintheinternalcontrolthatmightbesignificant


Yes No N/A

4

deficienciesormaterialweaknesses,andastatementthatcertaindeficiencieswereidentifiedthatareconsideredtobesignificantdeficiencies,andifapplicable,materialweaknesses

t. Iftheauditorincludestheauditee’sresponsestothefindingsandquestionedcostsinthereport,astatementthattheauditordidnotaudittheauditee’sresponses,andaccordinglyexpressesnoopiniononit

u. Aseparateparagraphattheendofthereportstatingthatthereportisintendedsolelyfortheinformationanduseofthosechargedwithgovernance,otherswithintheentity,federalawardingagencies,and(ifapplicable)pass‐throughentitiesandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties

v. Themanualorprintedsignatureoftheauditor’sfirm

w. Thecityandstatewheretheauditorpractices

x. Thedateoftheauditor’sreport

Note:Theauditor’sreportoncomplianceandinternalcontrolovercomplianceshouldgenerallybedatedthesamedateasthatoftheotherauditreports,butmaycarryalaterdatewhenA‐133complianceauditworkisperformedsubsequenttotheworkonthefinancialstatements.WhentheSEFAisreportedonintheauditor’sreportinthereportoncomplianceandinternalcontrolovercompliance,thereportingontheSEFAshouldbedatedthesamedateasthereportonthefinancialstatementsandthereforetheauditorcandualdatethereportasappropriate.[AAG‐SLV13.31]

2. Iftherearefindingsreportedinthefederalawardssectionofthescheduleoffindingsandquestionedcosts,hastheauditorconsideredtheneedtomodifythereport(qualified,adverse,ordisclaimer)oncomplianceandoninternalcontrolovercompliance?[AAG‐SLA13.43]

WithRegardtotheScheduleofExpendituresofFederalAwards:

3. Includes:

a. Federalprogrambyfederalagency,includingindividualprogramwithinacluster,andeitherindividualawardsorawardsbysubdivisionfor


Yes No N/A

5

researchanddevelopmentawards b. Totalfederalawardsexpendedforeachindividual

federalprogramandCatalogofFederalDomesticAssistance(CFDA)numberorotheridentifyingnumberwhentheCFDAnumberisnotavailable.

c. Ifapplicable,pass‐throughentitynameandidentifyingnumberassignedbythepass‐throughentity

d. Notesdescribingsignificantaccountingpoliciesinpreparingtheschedule

e. Ifapplicableandtotheextentpractical,amountsprovidedtosubrecipientsforeachfederalprogram

f. Valueofanyfederalawardsexpendedintheformofnoncashassistance

WithRegardtoDeterminationofMajorProgram:

4. DidtheTypeAprograms,thefederalprograms(orappropriatelyclusteredprograms)withexpendituresoffederalawardsduringtheauditperiodexceedingthelargerof:[A‐133.520(b);AAG‐SLA9.05]

$300,000or3percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedweremorethanorequalto$300,000andlessthanorequalto$100million);$3millionor0.3percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedweremorethan$100millionandlessthanorequalto$10billion);or$30millionor0.15percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedexceeded$10billion),

thatwerenotidentifiedasmajorprogramsmeetallofthefollowingconditions:[A‐133.520(c)(l);AAG‐SLA8l12‐.14]

a. Perreviewofthetwopriorauditreports,auditedasamajorprograminatleastoneofthetwomostrecentauditperiods[AAG‐SLA8.12](ThefactthataTypeAprogramwasnotTypeAintheprevioustwoyearsisnotrelevant.IftheTypeAprogramwasnotaudited


Yes No N/A

6

inthetwomostrecentauditperiods,withoutregardtobeingTypeAorBduringthoseperiodsorisanewprogram,itcannotbeconsideredlowriskand,therefore,mustbeauditedinthecurrentperiod.AuditorjudgmentcannotoverridetherequirementthatmajorprogramsshouldincludeeveryTypeAprogramthat(a)wasnotauditedinoneofthetwoprioryearsor(b)hadauditfindingsindicatedinA‐133.510(a)(1),(2)and(5).)

b. Perreviewofthetwopriorauditreports,freeofauditfindingsunderA‐133‐510(a)inthelastauditperiod.

(Auditfindingsunder§.510(a)–(1)Reportableconditionsininternalcontrolovermajorprograms.(2)Materialnoncompliancewiththeprovisionsoflaws,regulations,contracts,orgrantagreementsrelatedtoamajorprogram.(3)Knownquestionedcostswhicharegreaterthan$10,000foratypeofcompliancerequirementforamajorprogram.(4)Knownquestionedcostswhicharegreaterthan$10,000foraFederalprogramwhichisnotauditedasamajorprogram.(5)Thecircumstancesconcerningwhytheauditor’sreportoncomplianceformajorprogramsisotherthananunmodifiedopinion,unlesssuchcircumstancesareotherwisereportedasauditfindingsinthescheduleoffindingsandquestionedcostsforFederalawards.(6)KnownfraudaffectingaFederalaward,unlesssuchfraudisotherwisereportedasanauditfindinginthescheduleoffindingsandquestionedcostsforFederalawards.(7)Instanceswheretheresultsofauditfollow‐upproceduresdisclosedthatthesummaryscheduleofpriorauditfindingspreparedbytheauditeeinaccordancewith§.315(b)materiallymisrepresentsthestatusofanypriorauditfindings.)

c. Notrequestedbyfederalagencytobeexcludedfromconsiderationasalow‐riskprogram

5. Iftheentitywasconsideredalow‐riskauditee,werethefollowingconditionsmetforeachoftheprecedingtwoyears:[A‐133.530;AAG‐SLA8.26]


Yes No N/A

7

a. Annualsingleauditswereperformedontheentitybeingauditedor,ifabiennialaudit,priorapprovalwasobtainedfromthecognizantoroversightagency.Inorderforanauditeetomeetthecriteriaofalow‐riskauditeeinthecurrentyear,thepriortwoyears’auditsmusthavemettherequirementsofCircularA‐133,includingreportsubmissiontotheFederalAuditClearinghouse.

Note:Anentitydoesnotmeetthecriteriaforalowriskauditeeifitwasincludedinthesingleauditofadifferententityforeitherofthepriortwoyears’audits.

b. Theauditor’sopiniononthefinancialstatementsandtheScheduleofExpendituresofFederalAwardswereunmodifiedoranyqualificationwaswaivedbythecognizantoroversightagency.

Note:Forauditsofstateandlocalgovernments,theauditor’sopiniononeachopinionunitmustbeunmodified.

c. Therewerenodeficienciesininternalcontrol,whichwereidentifiedasmaterialweaknessesundertherequirementsofGovernmentAuditingStandardsunlessawaiverwasobtainedfromthecognizantoroversightagency.

d. Noneofthefederalprogramshadauditfindingsfromanyofthefollowingineitheroftheprecedingtwoyears(or,inthecaseofbiennialaudits,precedingtwoauditperiods)inwhichtheywereclassifiedatTypeAprograms:

Materialweaknessesininternalcontrol

overcompliance. Noncompliancewiththeprovisionsof

laws,regulations,contracts,orgrantagreements,whichhaveamaterialeffectonaTypeAprogram.

KnownorlikelyquestionedcoststhatexceedfivepercentofthetotalfederalawardsexpendedforaTypeAprogramduringtheyear.

WithRegardtotheScheduleofFindingsandQuestionedCosts:

6. DoestheScheduleofFindingsandQuestionedCosts


Yes No N/A

8

(SFQC)include:[AAG‐SLA13.38]

a. Asummaryoftheauditor’sresults?

b. FindingsrelatedtothefinancialstatementsthatarerequiredtobereportinginaccordancewithGAS?

c. Findingsandquestionedcostsforfederalawards?

7. Doesthesummaryofauditor’sresultssectionoftheSFQCcontainalloftherequiredinformationasfollows:[AAG‐SLA13.39]

a. Thetypeofreporttheauditorissuedonthefinancialstatementsoftheauditee(thatis,unmodified,qualified,adverse,ordisclaimer)

b. Whereapplicable,astatementthatsignificantdeficienciesormaterialweaknesses,orboth,ininternalcontrolweredisclosedbytheauditoffinancialstatements

c. Astatementonwhethertheauditdisclosedanynoncompliancethatismaterialtothefinancialstatements

d. Whereapplicable,astatementthatsignificantdeficienciesandmaterialweaknessesininternalcontrolovermajorprogramsweredisclosedbytheaudit

e. Thetypeofreporttheauditorissuedoncomplianceformajorprograms(thatis,unmodified,qualified,adverse,ordisclaimer)

f. AstatementonwhethertheauditdisclosedanyauditfindingsthattheauditorisrequiredtoreportunderCircularA‐133

g. Anidentificationofmajorprograms

h. ThedollarthresholdusedtodistinguishbetweenTypeAandTypeBprograms

i. Astatementastowhethertheauditeequalifiedasalow‐riskauditee[AAG‐SLA13.39a]

8. DoestheSFQCincludeasectiondisclosingfindingsrelatingtothefinancialstatementauditthatarerequiredtobereportedbyGovernmentAuditingStandardsincludingthefollowing:[A‐133.505(d)(2);AAG‐SLA12.44‐.34]

a. Significantdeficienciesininternalcontroloverfinancialreporting;

b. Allinstancesoffraudandillegalactsunlessclearlyinconsequential,exceptforfraudandillegalacts


Yes No N/A

9

involvingfederalawardsthataresubjecttoA‐133reporting,andthatarenotmaterialtothefinancialstatements;

c. Materialviolationsofprovisionsofcontractsandgrantagreements;and

d. Materialabuse

9. DoestheSFQCincludeasectiondisclosingfindingsandquestionedcostsrelatingtothecomplianceauditofmajorprogramsthatarerequiredtobereportedbyA‐133includingthefollowing:[A‐133.505(d)(3);AAG‐SLA12.35‐.38]

a. SignificantdeficienciesandmaterialweaknessesininternalcontrolovermajorprogramsinrelationtoatypeofcompliancerequirementforamajorprogramoranauditobjectiveidentifiedintheOMBComplianceSupplement;

b. Knownquestionedcoststhataregreaterthan$10,000andknownquestionedcostswhenlikelyquestionedcostsaregreaterthan$10,000foratypeofcompliancerequirementforamajorprogram,includinginformationtoprovideproperperspectiveforjudgingtheprevalenceandconsequencesofthequestionedcosts;

c. Knownquestionedcoststhataregreaterthan$10,000forprogramsthatarenotauditedasmajorprogramsforwhichtheauditorbecomesaware;

d. Ifapplicable,thecircumstancesconcerningwhytheauditor’sreportoncomplianceformajorprogramsisotherthananunmodifiedopinion,unlesssuchcircumstancesareotherwisereportedasauditfindingsintheSFQC;

e. Knowfraudaffectingafederalaward,ifnototherwisereportedasanauditfinding?(AnauditfindingisnotrequiredifthefraudwasreportedoutsidetheentityasrequiredbyGAS)[A‐133sec.510(a);AAG‐SLA13.42]

f. Instancesofmaterialrepresentationbytheauditeeofthestatusofanypriorauditfindings?[A‐133sec510(a);AAG‐SLA13.42and.50]

g. Abuseinvolvingfederalawardsthatismaterialtoamajorprogram?[AAG‐SLA13.43]

WithRegardtoAuditFindings:


Yes No N/A

10

10. Doestheauditfindingdetailinclude:

a. Areferencenumber?

b. FederalprogramandspecificfederalawardidentificationincludingtheCFDAtitleandnumber,federalawardnumberandyear,nameofthefederalagency,andifapplicablethenameofthepass‐throughentity[A‐133.510(b)(1);AAG‐SLA13.44a]

c. Theappropriateelements,includingcriteria(includingastatutory,regulatory,orothercitation),condition,questionedcosts,perspective,cause,possibleassertedeffect,recommendations,andviewsofresponsibleofficialstotheextentpractical[A‐133.510(b);AAG‐SLA13.44]

11. Dothefindingsreporttheviewsofresponsible,officialsconcerningthefindings,conclusions,andrecommendations,aswellasplannedcorrectiveactionsasrequiredbyGAS,orrefertothecorrectiveactionplan,dependingonthestatusofthedevelopmentofthecorrectiveactionplanatthetimetheauditor’sreportsarereleased?[AAG‐SLA13.41and.49]

a. Iftheauditee’scommentsopposethereport’sfindings,conclusions,orrecommendations,andarenotintheauditor’sopinion,valid‐oriftheplannedcorrectiveactionsdonoadequatelyaddresstheauditor’srecommendations‐doethefederalawardssectionofthescheduleoffindingsandquestionedcostsstatetheauditor’sreasonsfordisagreeingwiththecommentsorplannedcorrectiveaction?

FederalAuditClearinghouse:

12. Hastheauditeesubmittedtheauditreporttotheclearinghouse?

DESE Single Audit Report Checklist CoDist # For use with Single Audit reports DRAFT

Yes No N/A

1

OMNIComplianceReport:

1. Doesthereportoncompliancewithrequirementsapplicabletoeachmajorprogramandinternalcontrolovercompliancecontaintherequiredelements,asfollows:

b. Atitlethatincludesthewordindependent

c. Identificationoftheperiodcoveredbythereport

d. Anopinion(ordisclaimerofopinion)astowhetherthefinancialstatementsarepresentedfairlyinallmaterialrespectsinaccordancewithgenerallyacceptedaccountingprinciplesandanopinion(ordisclaimerofopinion)astowhetherthescheduleofexpendituresofFederalawardsisfairlystatedinallmaterialrespectsinrelationtothefinancialstatementsasawhole.(§200.515(a))

e. AreportoninternalcontroloverfinancialreportingandcompliancewithFederalstatutes,regulations,andthetermsandconditionsoftheFederalaward,noncompliancewithwhichcouldhaveamaterialeffectonthefinancialstatements.Thisreportmustdescribethescopeoftestingofinternalcontrolandcomplianceandtheresultsofthetests,and,whereapplicable,itwillrefertotheseparatescheduleoffindingsandquestionedcosts.(§200.515(b))

f. InadditiontotherequirementsofGAGAS,theauditormustdeterminewhethertheauditeehascompliedwithFederalstatutes,regulations,andthetermsandconditionsofFederalawardsthatmayhaveadirectandmaterialeffectoneachofitsmajorprograms.(§200.514(d)(1))

g. Astatementthatanauditincludesexamining,onatestbasis,evidenceabouttheauditee’scompliancewiththoserequirementsandperformingsuchotherproceduresastheauditorconsiderednecessaryinthecircumstances

h. Astatementthattheauditorbelievesthattheauditprovidesareasonablebasisfortheauditor’sopinion

i. Astatementthattheauditdoesnotprovidealegaldeterminationoftheauditee’scompliancewiththoserequirements

j. Ifinstancesofnoncompliancearenotedthatresultinanopinionmodification,areferencetoadescription


Yes No N/A

2

intheaccompanyingscheduleoffindingsandquestionedcosts,including

thereferencenumber(s)ofthefinding(s); anidentificationofthetypes(s)of

compliancerequirementsandrelatedmajorprogram(s);and

astatementthatcompliancewithsuchrequirementsisnecessary,intheauditor’sopinion,fortheauditeetocomplywiththerequirementsapplicabletotheprogram(s)

k. Anopiniononwhethertheauditeecomplied,inallmaterialrespects,withthetypesofcompliancerequirementsthatareapplicabletoeachofitsmajorfederalprogramsfortheyearended

l. Ifapplicable,astatementthattheresultsoftheauditingproceduresdisclosedinstancesofnoncompliancethataretobereportedinaccordancewith§200.516Auditfindings,andareferencetothescheduleoffindingsandquestionedcostsinwhichtheyaredescribed

ReportonInternalControlOverCompliance:

m. Astatementthattheauditee’smanagementisresponsibleforestablishingandmaintainingeffectiveinternalcontrolovercompliancewiththerequirementsoflaws,regulations,contracts,andgrantsapplicabletofederalprograms

n. Astatementthatinplanningandperformingtheaudit,theauditorconsideredtheauditee’sinternalcontrolovercompliancewiththetypesofrequirementsthatcouldhaveadirectandmaterialeffectonamajorfederalprogram,todeterminetheauditingproceduresforthepurposeofexpressinganopiniononcompliancebutnotforthepurposeofexpressinganopinionontheeffectivenessofinternalcontrolovercompliance

o. Astatementthattheauditor’sconsiderationofinternalcontrolovercompliancewasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliancethatmightbedeficiencies,significantdeficiencies,ormaterialweaknesses.Ifmaterialweaknessesininternalcontrolovercompliancehavebeenidentified,thisstatementisrevisedtoindicatethattheauditor’sconsiderationofinternalcontrol


Yes No N/A

3

overcompliancewasnotdesignedtoidentifyalldeficienciesininternalcontrolovercompliancethatmightbesignificantdeficienciesormaterialweaknesses,andtherefore,therecanbenoassurancethatalldeficiencies,significantdeficiencies,ormaterialweaknessesininternalcontrolovercompliancehavebeenidentified.

p. Thedefinitionsofdeficiencyininternalcontrolovercomplianceandmaterialweaknessesininternalcontrolovercompliance.Ifapplicable,astatementthatdeficienciesininternalcontrolovercompliancewereidentifiedthatareconsideredtobematerialweaknessesandadescriptionofthematerialweaknessesininternalcontrolovercomplianceorareferencetotheaccompanyingscheduleoffindingsandquestionedcosts,includingthereferencenumber(s)ofthefinding(s).

q. Ifsignificantdeficienciesininternalcontrolovercompliancewereidentified,thedefinitionofsignificantdeficiencyininternalcontrolovercompliance,astatementthatdeficienciesininternalcontrolovercompliancewereidentifiedthatareconsideredtobesignificantdeficiencies,andadescriptionofthesignificantdeficienciesininternalcontrolovercomplianceorareferencetotheaccompanyingscheduleoffindingsandquestionedcosts,includingthereferencenumber(s)ofthefinding(s)

r. Ifnomaterialweaknessesininternalcontrolovercompliancewereidentified,astatementtheauditordidnotidentifyanydeficienciesininternalcontrolovercompliancethatareconsideredtobematerialweaknesses

s. Ifnosignificantdeficienciesareidentified,astatementthattheauditor’sconsiderationoftheinternalcontrolovercompliancewouldnotnecessarilydiscloseallmattersininternalcontrolthatmightbesignificantdeficienciesormaterialweaknesses;ifsignificantdeficienciesareidentified,astatementthattheauditor’sconsiderationoftheinternalcontrolovercompliancewouldnotnecessarilydiscloseallmattersintheinternalcontrolthatmightbesignificantdeficienciesormaterialweaknesses,andastatementthatcertaindeficiencieswereidentifiedthatare


Yes No N/A

4

consideredtobesignificantdeficiencies,andifapplicable,materialweaknesses

t. Iftheauditorincludestheauditee’sresponsestothefindingsandquestionedcostsinthereport,astatementthattheauditordidnotaudittheauditee’sresponses,andaccordinglyexpressesnoopiniononit

u. Aseparateparagraphattheendofthereportstatingthatthereportisintendedsolelyfortheinformationanduseofthosechargedwithgovernance,otherswithintheentity,federalawardingagencies,and(ifapplicable)pass‐throughentitiesandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties

v. Themanualorprintedsignatureoftheauditor’sfirm

w. Thecityandstatewheretheauditorpractices

x. Thedateoftheauditor’sreport

Note:Theauditor’sreportoncomplianceandinternalcontrolovercomplianceshouldgenerallybedatedthesamedateasthatoftheotherauditreports,butmaycarryalaterdatewhenA‐133complianceauditworkisperformedsubsequenttotheworkonthefinancialstatements.WhentheSEFAisreportedonintheauditor’sreportinthereportoncomplianceandinternalcontrolovercompliance,thereportingontheSEFAshouldbedatedthesamedateasthereportonthefinancialstatementsandthereforetheauditorcandualdatethereportasappropriate.[AAG‐SLV13.31]

2. Iftherearefindingsreportedinthefederalawardssectionofthescheduleoffindingsandquestionedcosts,hastheauditorconsideredtheneedtomodifythereport(qualified,adverse,ordisclaimer)oncomplianceandoninternalcontrolovercompliance?[AAG‐SLA13.43]

WithRegardtotheScheduleofExpendituresofFederalAwards:

3. Includes:

a. Federalprogrambyfederalagency,includingindividualprogramwithinacluster,andeitherindividualawardsorawardsbysubdivisionforresearchanddevelopmentawards

b. Totalfederalawardsexpendedforeachindividual


Yes No N/A

5

federalprogramandCatalogofFederalDomesticAssistance(CFDA)numberorotheridentifyingnumberwhentheCFDAnumberisnotavailable.

c. Ifapplicable,pass‐throughentitynameandidentifyingnumberassignedbythepass‐throughentity

d. Notesdescribingsignificantaccountingpoliciesinpreparingtheschedule

e. Ifapplicableandtotheextentpractical,amountsprovidedtosubrecipientsforeachfederalprogram

f. Valueofanyfederalawardsexpendedintheformofnoncashassistance

WithRegardtoDeterminationofMajorProgram:

4. DidtheTypeAprograms,thefederalprograms(orappropriatelyclusteredprograms)withexpendituresoffederalawardsduringtheauditperiodexceedingthelargerof:§200.518

$300,000or3percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedweremorethanorequalto$300,000andlessthanorequalto$100million);$3millionor0.3percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedweremorethan$100millionandlessthanorequalto$10billion);or$30millionor0.15percentoftotalfederalawardsexpended(whentotalfederalawardsexpendedexceeded$10billion),

thatwerenotidentifiedasmajorprogramsmeetallofthefollowingconditions:

a. TheauditormustidentifyTypeAprogramswhicharelow‐risk.Inmakingthisdetermination,theauditormustconsiderwhethertheOversightexercisedbyFederalagenciesandpass‐throughentities,theresultsofauditfollow‐up,oranychangesinpersonnelorsystemsaffectingtheprogramindicatesignificantlyincreasedriskandprecludetheprogramfrombeinglowrisk.ForaTypeAprogramtobeconsideredlow‐


Yes No N/A

6

risk,itmusthavebeenauditedasamajorprograminatleastoneofthetwomostrecentauditand,inthemostrecentauditperiod,theprogrammusthavenothad:(i)Internalcontroldeficiencieswhichwereidentifiedasmaterialweaknesses(ii)Amodifiedopinionontheprogramintheauditor’sreportonmajorprograms(iii)KnownorlikelyquestionedcoststhatexceedfivepercentofthetotalFederalawardsexpendedfortheprogram.(reviewlasttwoauditsreceived)(§200.518(c)(1))

c. Federalagenciesandpass‐throughentitiesmayprovideauditorsguidanceabouttheriskofaparticularFederalprogramandtheauditormustconsiderthisguidanceindeterminingmajorprogramsinauditsnotyetcompleted.(Notrequestedbyfederalorpass‐throughagencytobeexcludedfromconsiderationasalow‐riskprogram)(§200.518(h))

5. Iftheentitywasconsideredalow‐riskauditee,werethefollowingconditionsmetforeachoftheprecedingtwoyears:[A‐133.530;AAG‐SLA8.26]

a. SingleauditswereperformedonanannualbasisinaccordancewiththeprovisionsofthisSubpart,includingsubmittingthedatacollectionformandthereportingpackagetotheFACwithinthetimeframespecifiedearlierof30calendarsafterreceiptoftheauditor’sreportorninemonthsaftertheendoftheauditperiod.(§200.520(a))

Note:Anon‐Federalentitythathasbiennialauditsdoesnotqualifyasalow‐riskauditee.

b. Theauditor’sopiniononwhetherthefinancialstatementswerepreparedinaccordancewithGAAP,orabasisofaccountingrequiredbystatelaw,andtheauditor’sinrelationtoopiniononthescheduleofexpendituresofFederalawardswereunmodified.(§200.520(b))

Note:Forauditsofstateandlocalgovernments,theauditor’sopiniononeachopinionunitmustbeunmodified.

c. Therewerenodeficienciesininternalcontrol,whichwereidentifiedasmaterialweaknessesundertherequirementsofGeneralAcceptedGovernment


Yes No N/A

7

AuditingStandardsunlessawaiverwasobtainedfromthecognizantoroversightagency.(§200.520(c))

d. Theauditordidnotreportasubstantialdoubtabouttheauditee’sabilitytocontinueasagoingconcern.(§200.520(d))

e. Noneofthefederalprogramshadauditfindingsfromanyofthefollowingineitheroftheprecedingtwoyears(or,inthecaseofbiennialaudits,precedingtwoauditperiods)inwhichtheywereclassifiedatTypeAprograms:

(1)Internalcontroldeficienciesthatwereidentifiedasmaterialweaknessesintheauditor’sreportoninternalcontrolformajorprograms(2)Amodifiedopiniononamajorprogramintheauditor’sreportonmajorprograms(3)KnownorlikelyquestionedcoststhatexceededfivepercentofthetotalFederalawardsexpendedforaTypeAprogramduringtheauditperiod(§200.520(e))

WithRegardtotheScheduleofFindingsandQuestionedCosts:

6. DoestheScheduleofFindingsandQuestionedCosts(SFQC)include:(§200.515(d))

a. Asummaryoftheauditor’sresults?

b. FindingsrelatedtothefinancialstatementswhicharerequiredtobereportedinaccordancewithGAGAS?

c. FindingsandquestionedcostsforFederalawards?

7. Doesthesummaryofauditor’sresultssectionoftheSFQCcontainalloftherequiredinformationasfollows:(§200.515(d)(1))

a. Thetypeofreporttheauditorissuedonthefinancialstatementsoftheauditee(unmodified,qualified,adverse,ordisclaimer)

b. Whereapplicable,astatementthatsignificantdeficienciesormaterialweaknesses,orboth,ininternalcontrolweredisclosedbytheauditoffinancialstatements

c. Astatementonwhethertheauditdisclosedanynoncompliancethatismaterialtothefinancialstatements


Yes No N/A

8

d. Whereapplicable,astatementthatsignificantdeficienciesandmaterialweaknessesininternalcontrolovermajorprogramsweredisclosedbytheaudit

e. Thetypeofreporttheauditorissuedoncomplianceformajorprograms(unmodified,qualified,adverse,ordisclaimer)

f. Astatementonwhethertheauditdisclosedanyauditfindingsthattheauditorisrequiredtoreportunder§200.516AuditFindings

g. Anidentificationofmajorprograms

h. ThedollarthresholdusedtodistinguishbetweenTypeAandTypeBprograms

i. Astatementastowhethertheauditeequalifiedasalow‐riskauditeeunder§200.520Criteriaforalowriskauditee.

8. TheSFQCincludeasectiondisclosingfindingsrelatingtothefinancialstatementauditthatarerequiredtobereportedbyGAGAS.(§200.515(d)(2))

9. TheSFQCincludeasectiondisclosingfindingsandquestionedcostsforFederalawardswhichmuchincludeauditfindingsasdefinedin§200.516(a)AuditFindings.(§200.515(d)(3))

a. Auditfindings(e.g.,internalcontrolfindings,compliancefindings,questionedcosts,orfraud)thatrelatetothesameissueshouldbepresentedasasingleauditfinding.Wherepractical,auditfindingsshouldbeorganizedbyFederalagencyorpass‐throughentity.

b. AuditfindingsthatrelatetoboththefinancialstatementsandFederalawards,asreportedunderparagraphs(d)(2)and(d)(3)ofthissection,respectively,shouldbereportedinbothsectionsoftheschedule.However,thereportinginonesectionoftheschedulemaybeinsummaryformwithareferencetoadetailedreportingintheothersectionoftheschedule.

WithRegardtoAuditFindings:

10. Doestheauditfindingdetailinclude:(§200.516)

a. Areferencenumber?


Yes No N/A

9

b. FederalprogramandspecificFederalawardidentificationincludingtheCFDAtitleandnumber,Federalawardidentificationnumberandyear,nameofFederalagency,andnameoftheapplicablepass‐throughentity.

c. Theappropriateelements,includingcriteria(includingastatutory,regulatory,orothercitation),condition,questionedcosts,cause,possibleassertedeffect,perspective,recommendations,repeatfinding,andviewsofresponsibleofficialstotheextentpractical

FederalAuditClearinghouse:

12. Hastheauditeesubmittedtheauditreporttotheclearinghousewithintherequiredtimeframeearlierof30calendarsafterreceiptoftheauditor’sreportorninemonthsaftertheendoftheauditperiod?(§200.512)

1

Charter School Audit Checklist-FY14 Using NFP Financial Statement Presentation With Regard to the Auditor’s Report: Yes No N/A 1. Does the report appropriately include the basic

elements required under professional standards and is appropriate language used for modifying the report in the circumstances described in such standards? Consider the following: [AU 508.08–.1 and 623]

a. A title that includes the word independent [AU 508.08a]

b. The report covers all periods for which financial statements are presented [AU 508.08 and .65]

c. A reference to the country of origin of the accounting principles used to prepare the financial statements [AU 508.08h]

d. A reference to the country of origin of the auditing standards the auditor followed in performing the audit [AU 508.08d]

e. A consistency explanatory paragraph to the auditor’s report for a change in reporting entity not resulting from a transaction or event [AU 420.08]

2. If the audit organization reports these internal control and compliance matters in a separate report from the report on the financial statements, did the audit organization include:

a. a reference to the separate reports in the report on the financial statements? [GAS par. 5.08]

b. a statement that the reports on internal control and compliance are an integral part of a GAGAS audit and important in assessing the results of the audit? [GAS par. 5.09]

3. Has the auditor reported on the Schedule of Expenditures of Federal Awards by including the following: [AAG-SLA 12.12–.15]

a. An identification of the SEFA as accompanying supplementary information by descriptive title or by page number reference in the document

b. A statement that the audit was conducted for

2

the purpose of forming an opinion on the basic financial statements and that the SEFA required by Circular A-133 is presented for the purposes of additional analysis and is not a required part of the basic financial statements

c. An opinion on whether the SEFA is fairly stated, in all material respects, in relation to the financial statements taken as a whole.

With Regard to Financial Statements and Notes: General 4. Is the accounting appropriate and are the basic

financial statement disclosures adequate? Consider the following:

a. The financial statements are suitably titled. [AU 623.02, .05, .07, .24]

b. Has the Internal Revenue codes section under which the organization is exempt been disclosed? [Generally accepted]

c. The disclosures are adequate concerning significant accounting policies, including a description of the nature of each fund, if applicable (for instance, general, plant, endowment, unrestricted, temporarily restricted, and permanently restricted). [Paragraphs 3–6 of FASB ASC 235-10-50; for OCBOA, AU 623.09–.10 and 9623.90–.95]

d. Disclosures for accounting changes are made. [FASB ASC 250, Accounting Changes and Error Corrections]

e. The basic financial statements should focus on the entity as a whole and consist of a statement of financial position (or balance sheet), statement of activities (or statement of revenues and expense) in which the amount of the change in net assets articulates to the statement of financial position, and a statement of cash flows, and accompanying notes. [FASB ASC 958-205; FASB ASC 958-210, FASB ASC 958-225; FASB ASC 958-230]

f. Net assets and changes in net assets should be classified as permanently restricted, (b) temporarily restricted, and/or (c) unrestricted, based on donor imposed restrictions or relevant law, or both. [FASB ASC 958-225; FASB ASC glossary term donor imposed restrictions]

g. Information is provided about the nature and amounts of different types of permanent

3

restrictions and temporary restrictions. [FASB ASC 958-210-45-9]

h. Required disclosures about risks and uncertainties are made regarding the nature of operations, the use of estimates, certain significant estimates, and current vulnerabilities due to certain concentrations. [FASB ASC 275-10-50]

i. Adjustments of financial statements related to prior periods were made. [FASB ASC 250-10; Paragraphs 12–18 of FASB ASC 270-10-45]

j. The potential impact of new accounting pronouncements (issued but not yet effective) on the entity and disclosures relating to same was stated, if applicable. [AU 9410.13–.18]

5. Is a description of the organization’s activities, including each major class of programs, disclosed?[FASB ASC 958-205-50-1; FASB ASC 958-720-45-5; FASB ASC 958-720-50-1]

6. Is the accounting and reporting adequate concerning employee benefit, postemployment, and postretirement benefit plans and obligations? [FASB ASC 958-715] Consider the following:

a. Defined benefit pension plans [FASB ASC 715-20; FASB ASC 715-30; FASB ASC 715-80]

b. Defined contribution pension plans [FASB ASC 715-70]

c. Other pension, profit sharing, or other employee benefit plans [FASB ASC 718, Compensation—Stock Compensation]

d. Postemployment benefits (after employment but before retirement) [FASB ASC 712, Compensation—Nonretirement Postemployment Benefits]

General: 7. Does the statement of financial position report

total assets, liabilities, and net assets as well as separate amounts for each of the three classes of net assets with captions used to describe their meaning as explained in FASB ASC 958-210? [AAG-NPO 3.03, 3.05, 11.03, 11.14] A117

8. Are amounts in the Statement of Financial Position properly presented? Consider the following:

a. The reporting of the amounts of the entity’s

4

total assets, liabilities, and net assets is presented. [Paragraphs 1–3 of FASB ASC 958-210-45]

b. Cash and other assets received with a long-term donor imposed restrictions are classified separately from those assets that are unrestricted and available for current use. [Paragraphs 5-6 of FASB ASC 958-210-45]

c. The statement provides information about liquidity by one or more of the following: (a) sequencing assets according to their nearness to cash and liabilities according to their nearness to maturity, (b) classifying assets and liabilities as current and noncurrent [FASB ASC 210-10], or (c) footnote disclosure about the liquidity or maturity of assets and liabilities, including restrictions on the use of particular assets. [FASB ASC 958-210-50-1]

Cash and Investments: 9. Is the accounting appropriate and are the

disclosures adequate for cash and investments? Consider the following:

a. Restricted cash including compensating balances [subpoint a of FASB ASC 210-10-45-4; FASB ASC 958-210-45-7]

b. Cash or other assets with a donor-imposed restriction for a long-term purpose [FASB ASC 958-210-45-6; FASB ASC 958-210-50]

c. Bank overdrafts reclassified to and presented separately in current liabilities [Generally Accepted]

d. Held checks (for instance, those written before but not released until after the balance sheet date) reclassified to accounts payable [Generally Accepted]

e. Investments, including derivative instruments and hedging activities [FASB ASC 958-320; FASB ASC 958-325; FASB ASC 815, Derivatives and Hedging; FASB ASC 320, Investments—Debt and Equity Securities; FASB ASC 323, Investments—Equity Method and Joint Ventures; FASB ASC 325, Investments—Other]

10. Are the disclosures adequate concerning transfers of assets to a recipient, where the entity specifies itself or its affiliate as the beneficiary? [FASB ASC 958-20-50-1; FASB ASC 958-605-50-6] Consider the following:

5

a. The identity of the recipient organization to which the transfer was made

b. The terms under which the amounts will be distributed to the resource provider or its affiliate

c. The aggregate amount recognized in the statement of financial position for these transfers and whether that amount is recorded as an interest in the net assets of the recipient organization

Fixed Assets and Other Noncurrent Assets: 11. Is the accounting appropriate and are

disclosures adequate concerning fixed assets? Consider the following:

a. Purchased fixed assets [Paragraphs 1–4 of FASB ASC 958-360-50]

b. Donated fixed assets [FASB ASC 958-360-30-1; Paragraphs 1–4 of FASB ASC 958-360-50]

c. Capitalization policy [Paragraphs 1–2 of FASB ASC 958-360-50]

d. Accounting for depreciation, including disclosures of depreciation policy for inexhaustible assets [Paragraphs 1–7 of FASB ASC 958-360-35-7; Paragraphs 1–2 of FASB ASC 958-360-45; Paragraphs 1–2 of FASB ASC 958-360-50]

e. Major classes of depreciable assets f. Accumulated depreciation, as well as a general

description of the method used in computing depreciation

g. Capitalized interest [FASB ASC 958-835-20] h. Restrictions on use or disposal imposed by

donor [Paragraphs 1–4 of FASB ASC 958-360-50]

i. Sales-type, direct financing, leveraged, and operating leases of lessors [FASB ASC 840, Leases]

Notes Payable and Other Debt: 12. Is the accounting appropriate and are

disclosures adequate concerning notes payable and other debt? Consider the following:

a. Maturities and rates b. Obligations under capital leases [FASB ASC

840-30]

c. Liabilities associated with exit or disposal of long-lived assets[Paragraphs15–49 of FASB

6

ASC 360-10-35] d. Other liabilities and deferred credits, including

environmental remediation liabilities, employees’ compensation for future absences, special termination benefits to employees, and deferred revenue and support [Paragraphs 1–3 of FASB ASC 710-10-25-1; FASB ASC 710-10-50-1; Paragraphs 6–8 of FASB ASC 710-10-25; FASB ASC 410-30; FASB ASC 712-10; FASB ASC 430-10]

Statement of Activities General: 13. Does the Statement of Activities properly report

net assets and changes in net assets? Consider the following:

a. The amount of change in net assets for the period using a descriptive term such as change in net assets or change in equity[FASBASC958‐205‐05‐7;FASBASC958‐225‐45‐2]

b. The amount of change in permanently restricted, temporarily restricted, and unrestricted net assets [FASB ASC 958-225-45-1]

c. Events (for example, expiration of donor imposed restrictions) that simultaneously increase one class of net assets and decrease another (reclassifications) presented as separate items [FASB ASC 958-225-45-3]

Revenues and Contributions: 14. Is the accounting appropriate and are

disclosures adequate concerning revenues and contributions received? Consider the following:

a. Revenues should be reported as increases in unrestricted net assets unless the use of the assets received is limited by donor imposed restrictions. [FASB ASC 958-225-45-5]

b. Contributions received should be classified as permanently restricted, temporarily restricted, and unrestricted based upon donor-imposed restrictions and/or relevant law. [Paragraphs 3–6 of FASB ASC 958-605-45; Paragraphs 1–2 of FASB ASC 958-360-50; FASB ASC 958-605-50-2]

c. Gross amounts of revenues (including those for special events that are ongoing and major activities), and investment revenues are reported either in the footnotes or on the face of

7

the financial statements. [Paragraphs 14–17 of FASB ASC 958-225-45; FASB ASC 958-720-05-4; FASB ASC 958-225-45-17]

Expenses: 15. Is the accounting appropriate and are

disclosures adequate concerning expenses (including those for special events that are ongoing and major activities)? Consider the following:

a. Expenses are reported as decreases in unrestricted net assets. [FASB ASC 958-225-45-7]

b. Gross amounts of expenses (including those for special events that are ongoing and major activities), and investment expenses, are reported either in the footnotes or on the face of the financial statements. [Paragraphs 14–17 of FASB ASC 958-225-45; FASB ASC 958-720-05-4; FASB ASC 958-320-45-4]

c. Depreciation is reported. [FASB ASC 360-10; FASB ASC 958-360]

d. Deferred compensation agreements are reported. [FASB ASC 710; FASB ASC 712, Compensation—Nonretirement Postemployment Benefits; FASB ASC 715, Compensation—Retirement Benefits; FASB ASC 958-715]

e. Operating leases and rent expense of lessees are reported. [FASB ASC 840-20-25-1; Paragraphs 1–3 of FASB ASC 840-20-50; FASB ASC 840-10-50-2]

16. Are expenses reported by their functional classification (such as major classes of program services and supporting activities) either on the face of the statement of activities or in the notes to the financial statements? [FASB ASC 958-720-45-2; FASB ASC 958-720-05-4; FASB ASC 958-205-45-6]

Other Gains and Losses: 17. Is the accounting appropriate and are the

disclosures adequate for other gains and loss items included in the Statement of Activities? Consider the following:

a. Gains and losses on investments are reported as increases or decreases in unrestricted net assets, unless their use is temporarily or permanently restricted by explicit donor

8

stipulations or by law. [FASB ASC 958-225-45-8]

b. Third-party reimbursements of costs for services provided are reported. [AAG-NPO 5.07-.19]

c. Investment income and gains and losses are reported. [Paragraphs 14–15 of FASB ASC 958-225-45; FASB ASC 958-320-50-1;Paragraphs 1–3 of FASB ASC 958-320-45]

d. Donated services, materials, and facilities are reported. [FASB ASC 958-605-25-16; FASB ASC 958-605-55-28; FASB ASC 958-605-50-1; Paragraphs 23–24 of FASB ASC 958-605-55]

e. Costs of start-up activities are reported. [FASB ASC 720-15]

f. Grants to other organizations are reported. [FASB ASC 958-205-45-6]

g. Extraordinary items are reported. [FASB ASC 225-20]

Statement of Cash Flows: 18. Is the Statement of Cash Flows properly

prepared and presented? Consider the following:

a. Cash provided or used by investing, financing and operating activities is disclosed. [FASB ASC 958-230; FASB ASC 230-10-45]

b. Amounts received with long-term donor stipulations in cash flows from financing activities are disclosed. [FASB ASC 958-230-55-3]

c. The net effect of cash flows on cash and cash equivalents during the period in a manner that reconciles beginning and ending cash and cash equivalents is disclosed; also, do the amounts of cash and cash equivalents agree with the amounts on the statement of financial position? [FASB ASC 230-10-45-24]

d. Reconciliation between changes in net assets/net equity and net cash flow from operating activities is disclosed. [FASB ASC 230-10-45-29]

e. If the indirect method of reporting net cash flows from operating activities was used, the amounts of interest and income taxes paid were disclosed. [FASB ASC 230-10-50-2]

f. Cash equivalents are limited to short-term,

9

highly liquid investments that are both readily convertible to known amounts of cash and of an original maturity of three months or fewer, and the organization’s policy for determining which items are treated as cash equivalents is disclosed. [FASB ASC glossary term cash equivalents; Paragraphs 5–6 of FASB ASC 230-10-45; FASB ASC 230-10-50-1]

g. The components of the cash flow statement are shown at “gross” and not “net” amounts. [Paragraphs 7–9 of FASB ASC 230-10-45]

h. If the organization’s tax-exempt status is in question by the IRS, the organization considered the potential loss or expense for financial reporting and disclosure. [FASB ASC 958-450-25-1]

i. If the organization incurs income tax expense, the notes to the financial statements disclose the amount of the unrelated business income tax and describe the nature of the activities that generated the unrelated business income tax. [subpoint c of FASB ASC 958-720-50-1]

With Regard to Reporting on Internal Control and on Compliance with Laws, Regulations, and Provisions of Contracts or Grant Agreements:

19. If the audit organization issued a management letter, did the reports on internal control and compliance refer to that management letter? [GAS par. 5.09; AAG-SLA 4.35–.36]

20. Did the auditor’s reports on internal control and compliance and other matters based upon an audit of financial statements performed in accordance with Government Auditing Standards include all required elements as follows? [AAG-SLA 4.25–.26]

a. A statement that the auditor has audited the financial statements of the auditee and a reference to the auditor’s report on the entity’s financial statements and, if applicable, a description of any departures from the standard report

b. A statement that the audit was conducted in accordance with GAAS and an identification of the United States as the country of origin of those standards and with the standards applicable to financial audits contained in Government Auditing Standards issued by the

10

Comptroller General of the United States Note: If the financial statements include organizational units that were not required to have a GAS audit, the auditor should consider modifying this scope statement.

c. A statement that in planning and performing the audit, the auditor considered the entity’s internal control over financial reporting in order to determine the auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide an opinion on internal control over financial reporting, and accordingly, does not express an opinion on the effectiveness of internal control over financial reporting

d. The definition of control deficiency and significant deficiency and, if applicable, a statement that deficiencies were identified that are considered to be significant deficiencies

e. A statement that the consideration of internal control would not necessarily disclose all matters in internal control over financial reporting that might be significant deficiencies or material weaknesses

f. If significant deficiencies are noted, a statement that certain deficiencies were identified that the auditor considers to be significant deficiencies

g. If applicable, a description of the significant deficiencies identified (including the views of responsible officials and their planned corrective action) or reference to a separate schedule in which the significant deficiencies, views, and planned corrective action are described.

h. The definition of a material weakness i. If no significant deficiencies are identified, a

statement that no material weaknesses were noted; or, if significant deficiencies are noted, a statement that the auditor’s consideration of internal control would not necessarily identify all deficiencies that might be significant deficiencies and a statement about whether the auditor believes any of the significant deficiencies are material weaknesses

j. A statement that as part of obtaining reasonable assurance about whether the financial statements are free of material misstatement,

11

the auditor has performed tests of the entity’s compliance with certain provisions of laws, regulations, contracts, and grant agreements (noncompliance with which could have a direct and material effect on the determination of financial statement amounts)

k. A statement that the objective of the financial statement audit is not to provide an opinion on compliance with those provisions, and, accordingly, the auditor does not express such an opinion Note: If sufficient work is performed, GAS permits, but does not require, auditors to express an opinion on compliance. If an opinion is expressed, the statement should be modified accordingly.

l. A statement that notes whether the results of tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and, if they are, describes the matters (including the views of responsible officials and their planned corrective action) or refers to the separate schedule in which the noncompliance, views, and planned corrective action are described

m. A statement that the auditor did not audit the entity’s response and expresses no opinion on it if the entity’s responses (views of responsible officials and corrective action plan) to the findings are included in the report or the separate schedule of findings

n. If applicable, a statement that other matters (that is, (1) deficiencies in internal control that are not significant deficiencies and (2) immaterial violations of provisions of contracts or grant agreements and immaterial abuse, other than those that are clearly inconsequential) were communicated to the entity in a management letter

o. A separate paragraph at the end of the report indicating the report is intended solely for the information and use of management as well as those charged with governance, any others within the entity, and, if applicable, legislative or regulatory bodies and is not intended to be and should not be used by anyone other than these specified parties

12

p. The manual or printed signature of the audit organization

q. The date of the auditor’s report Note: Because the report on internal control over financial reporting and on compliance relates to the audit of the financial statements and is based on the GAAS audit procedures performed, it should carry the same date as the auditor’s report on the financial statements.

With Regard to Reporting Views of Responsible Officials: 21. For reported findings related to internal control

deficiencies or fraud, illegal acts, violations of provisions of contracts or grant agreements, or abuse, did the audit organization obtain and report the views of responsible officials as well as planned corrective action? [GAS par. 5.32–.34; AAG-SLA 4.33–.34]

22. If the entity refuses to provide comments or is unable to do so in a timely manner, did the audit organization indicate such in their report? [GAS par. 5.38]

Note: This checklist is derived primarily from the pronouncements of the GASB and the AICPA. For detailed information concerning these requirements, the reviewer may wish to consult the authoritative literature of the above noted organizations as well as the AICPA Practice Aids, Checklists and Illustrative Financial Statements for State and Local Governments, and Auditing Governmental Financial Statements: Programs and Other Practice Aids. All “No” answers must be thoroughly explained.

1

FOOD AND NUTRITION SERVICES

Karen Wooton, Coordinator

Missouri Departmentof Elementary and Secondary Education

Agenda

CommunityEligibilityProvision(CEP)

2

SmartSnacks

ProfessionalStandards

2

Community Eligibility Provision (CEP)

AvailablenationwideJuly1,20143

Offerfreelunchesandbreakfaststoallenrolledstudentsforacycleof4years

Nocollectionoffreeandreducedpriceapplication

MealcostsinexcessofthetotalFederalreimbursementmustbecoveredbynon‐Federalsources

CEP in Missouri (2014-15)

75LocalEducationAgencies(LEAs)‐ 298buildings

4

buildings 50publicschooldistricts 21charterschools 4non‐publicschools

(64district‐wide)

3

CEP – eligibility criteria

MusthaveanIdentifiedStudentPercentage(ISP) of at least 40% as of April 1st of the school

5

(ISP)ofatleast40%asofApril1st oftheschoolyearpriortoimplementation

Identified Student Percentage 6

IdentifiedStudent % = X 100Identified

Student%=

#ofIdentifiedStudents

Total#ofenrolledstudentswithaccessto

NSLP/SBP

x100

4

Definition: Indentified Students

Studentscertifiedforfreemealswithoutanapplication

7

application

IncludesstudentsdirectlycertifiedthroughSNAP,TANF,FDPIR,andhomelessontheliaisonlist,income‐eligibleHeadStart,pre‐KEvenStart,migrant,runaways,non‐applicantsapprovedbylocalofficials,andfosterchildrencertifiedthroughmeansotherthananapplication

CEP Claiming Percentages 8

50identifiedstudentsand100enrolledstudents50% ISP=50%ISP

50%x1.6 =80%(freeclaimingpercentage) 100%‐ 80%=20%(paidclaimingpercentage)

If served 1500 meals in one monthIfserved1500mealsinonemonth1500x80%=1200freemeals1500x20%=300paidmeals

5

The Multiplier (1.6)

Intendedtoprovideanestimateofthetotalnumber of students eligible for free and reduced

9

numberofstudentseligibleforfreeandreducedmealsinaneligibleschool

USDAispermittedtochangethemultipliertoanumberbetween1.3and1.6

Schoolsmaykeepthesamemultiplierfortheentire4yearcycle

100% Free claiming

Whatistheindentifiedstudentpercentagethatl l ll l h f ?

10

resultsinclaimingallmealsatthefreerate?

62.5%

(62 5 x 1 6 = 100%)(62.5x1.6 =100%)

6

Indentified Student Determinations

Byindividualschools

11

Agroupofschools

EntireLEA

Preliminary Identified Student Data

VerificationReport

12

StudentsdirectlycertifiedthroughSNAP Alsoincludeextendedcategoricaleligibilitystudents

Studentsdirectlycertifiedthroughotherprograms TANF,FDPIR(alsoextendedcategoricaleligiblestudents) those documented as homeless migrantstudents),thosedocumentedashomeless,migrant,runaway,foster,HeadStart,Pre‐KEvanStart,ornon‐applicantapprovedbyLEA

(AsofthelastoperatingdayinOctober)

7

Notification Timeline

April15th ‐ ObtainschoollevelinformationEli ibl 40% d b

13

Eligible– 40%andabove Potentiallyeligible‐ greaterthan30%butlessthan40%

May1st – PublishlistofLEAsandschoolsonDESE FNS b i d USDA FNS b iDESE,FNSwebsiteandUSDA,FNSwebsite

Deadline

MustdecidebyJune30th (extendedtoAugust31st for the 2015 2016 SY)

14

31st forthe2015‐2016SY)

CompletetherequiredinformationonWebApplication

Intenttoparticipateformprovidedforsignature

8

Updating the Claiming Percentage

AnewISPmay beestablishedeachyear(donotneed to use unless higher than previously

15

needtouseunlesshigherthanpreviouslyestablished%)

Ifupdated,wouldneedtoproceedwiththedirectcertificationprocesstoprovideanewnumberasofApril1,2015

Benefits of Implementing CEP

Servefreelunchesandbreakfaststoallstudents

16

Reducedpaperworkforhouseholdsandschoolfoodservicebecausenohouseholdapplicationsarecollectedandprocessed

NoVerificationofapplications

Reducedchanceofovertidentificationandstigma

9

CEP Resources on Website

CEPparticipationlistf l h b l

17

Processforcompletingthewebapplication USDAmemos Samplemediarelease Samplelettertohouseholds Traditional vs CEP comparison tool Traditionalvs CEPcomparisontool CEPFederalreimbursementestimatortool CEP– dailymealcountform

Smart Snacks

USDAestablishednutritionstandardsforallfoods and beverages sold to students on the

18

foodsandbeveragessoldtostudentsontheschoolcampusduringtheschoolday.

Fromthemidnightbefore,to30minutesaftertheendoftheofficialschoolday.

EffectiveJuly1,2014

10

School Campus

All f h d h j i di i

19

Allareasofthepropertyunderthejurisdictionoftheschoolthatareaccessibletostudentsduringtheschoolday:

Includesschoolstores,snackbars,vendingmachines,alacarteincafeteria

Doesnotincludeareasexclusivelyusedbyfacultyandstaff,suchasteacher’slounges

Sale of Food

All f d ld t t d t th d i

20

AllfoodsoldtostudentsonthecampusduringtheschooldayissubjecttotheSmartSnackstandards.

Standardsdonotapplytofoodgiven tostudents

11

Foods Brought From Home

USDAdoesnotregulatefoodsbroughtfrom

21

g ghome. (Theruleonlyaffectsfoodsthataresoldontheschoolcampustostudentsduringtheschoolday.)

Does not apply to lunches brought from home. Doesnotapplytolunchesbroughtfromhome.

Doesnotapplytotreatsforbirthdaysbroughtfromhome.

Special Events

For special events such as celebrations holiday

22

Forspecialevents,suchascelebrations,holidayparties,etc.,thestandardsdonotapplyifsuchfoodisprovidedtothestudentsfreeofchargeor“contribution,”orthereisnoexchangeoftokensorticketsofanykind.

Theruleonlyappliestofoodsold tostudentsontheschoolcampusduringtheschoolday.

12

Fundraisers

Allfoodsthatmeettheregulatorystandardsmay be sold as fundraisers on the school campus

23

maybesoldasfundraisersontheschoolcampusduringtheschoolday

Thestandardsdonotapplytoitemssoldduringnon‐schoolhours,weekends,oroff‐campus

Fundraiser Exemptions for Missouri

Amaximumof5fundraisersthatdonotmeetthe regulatory standards per school building

24

theregulatorystandards,perschoolbuilding,perschoolyear,withadurationofonedayareallowed

Exemptfundraisersmaynotbesoldincompetitionwithschoolmealsinthefoodserviceareaduringthemealservice

13

Recordkeeping

FoodServicemustmaintainrecordsforallSmart Snack products sold under the nonprofit

25

SmartSnackproductssoldunderthenonprofitschoolfoodserviceaccount

SchoolDistrictsmustmaintainrecordsforallotherSmartSnackproductssold

Monitoring and Compliance

Monitoringforcomplianceispartoftheon‐siteAdministrative Review

26

AdministrativeReview

Ifviolationshaveoccurred,technicalassistanceandcorrectiveactionplanswillberequired

14

Smart Snack Resources on Website

SmartSnacksTrackingSheetd k Sh

27

ExemptFundraiserTrackingSheet SmartSnacksProductCalculator SmartSnacksProductNavigator USDAguidancememosandQ&A’s Smart Snacks Webinar SmartSnacksWebinar

Professional Standards

S A h bl h d f l

28

USDAhasestablishedminimumprofessionalstandardsforschoolnutritionprofessionalswhomanageandoperatetheNationalSchoolLunchandSchoolBreakfastPrograms.

ImplementationbeginsJuly1,2015(SY15‐16)

15

Requirements

bl h

29

Establishesminimumrequirements:HiringstandardsforNEWstatedirectorsHiringstandardsforNEWlocalfoodservicedirectors

AnnualtrainingstandardsforALLschoolnutritionlemployees

State Director-Nutrition Programs

Bachelor’sdegreewithanacademicmajorinareas including food and nutrition food service

30

areasincludingfoodandnutrition,foodservicemanagement,dietetics,familyandconsumersciences,nutritioneducation,culinaryarts,business,orarelatedfield

Hiringstandardsarefornewhiresonly

16

School Nutrition Program Directors

Hiringstandardsarebasedon3LEAsizecategories:

31

categories: 2,499orlessstudentenrollment 2,500‐9,999studentenrollment 10,000ormorestudentenrollment

Hiringstandardsarefornewhiresonly

Hiring Standards

ForsmallLEAs(≤2,499students):B h l ’ d ith ifi j OR

32

Bachelor’sdegreewithspecificmajor,OR Bachelor’sdegreewithanyacademicmajor,andaState‐recognizedcertificate,OR

Associate’sdegreewithspecificmajorandatleast1yearofexperience,OR

Highschooldiploma(orGED)and3yearsofexperience

ForverysmallLEAs(<500students): Stateagencyhasdiscretiontoapprovethehiringofadirectorthathasahighschooldiplomabutlessthan3yearsofexperience

17

Hiring Standards

Formid‐sizeLEAs(2,500‐9,999students):B h l ’ d i h ifi j OR

33

Bachelor’sdegreewithspecificmajor,ORBachelor’sdegreewithanyacademicmajor,andaState‐recognizedcertificate;OR

Bachelor’sdegreewithanyacademicmajorandatleast2yearsofexperience,OR

Associate’sdegreewithspecificmajorandatleast2yearsofexperience

Hiring Standards

ForlargeLEAs(10,000ormorestudents):B h l ’ d i h ifi j OR

34

Bachelor’sdegreewithspecificmajor,ORBachelor’sdegreewithanyacademicmajor,andaState‐recognizedcertificate;OR

Bachelor’sdegreewithanyacademicmajorandatleast5yearsexperienceinmanagementofprograms

18

Food Safety Certification

ForNewSchoolFoodAuthority(SFA)directorsin All LEAs:

35

inAllLEAs: Atleast8hoursoffoodsafetytrainingwithin5yearspriortothestartingdate,orcompletedwithin30daysofthestartingdate

Training Standards

SFAdirectors 8 hours ‐ SY 2015‐2016

36

8hours SY2015 2016 12hours‐ beginningSY2016‐2017

SFAmanagers 6hours‐ SY2015‐2016 10hours‐ beginningSY2016‐2017

SFAstaff 4hours‐ SY2015‐2016 6hours‐ beginningSY2016‐2017

Part‐timestaffworkinganaverageoflessthan20hrs/week 4hours‐ SY2015‐2016andbeyond

19

Training Standards - Flexibilities

A l h d 1 l l

37

AnemployeehiredJan.1orlatermustcompletehalfoftherequiredtraininghours

InSY2015‐2016:TrainingreceivedthreemonthspriortoJuly1,2015,countstowardthefirstyear’strainingrequirementsforallSFApersonnel

Missouri Training Opportunities

AnnualSummerWorkshops

38

Webinars

E‐LearningModules(inprocessofdevelopment)

20

SFA Oversight

Documentcompliancewiththehiringandtraining standards for SFA director manager and

39

trainingstandardsforSFAdirector,managerandstaff

DocumentationmustbeavailableforAdministrativeReview Technicalassistanceandcorrectiveactioncanbe

d t dd liusedtoaddressnoncompliance

ContactUs40 Co tact Us

MissouriDepartmentofElementaryandSecondaryEducationFoodandNutritionServices

P.O.Box480JeffersonCity,MO65102‐0480

The Department of Elementary and Secondary Education does not discriminate on the basis of race, color, religion, gender, national origin, age, or disability in its programs and activities. Inquiries related to Department programs and to the location of services, activities, and facilities that are accessible by persons with disabilities may be directed to the Jefferson State Office Building, Office of the General Counsel, Coordinator – Civil Rights Compliance (Title VI/Title IX/504/ADA/Age Act), 6th Floor, 205 Jefferson Street, P.O. Box 480, Jefferson City, MO 65102-0480; telephone number 573-526-4757 or TTY 800-735-2966; email [email protected].

Telephone:(573)751‐3526Web:http://dese.mo.gov/financial‐admin‐services/food‐

nutrition‐servicesEmail:[email protected]

1

Fraud and the Bottom LineProtecting Revenue from Theft

MSPCAMSPCA

2015 School Audit Conference

May 5, 2015

Grant me the serenity to accept the fraud I cannot prevent

The Fraud Serenity Prayer

cannot prevent

The controls to prevent the fraud I can,

And may my insurance policy cover the difference

2

62% of Companies experienced actual or attempted payment fraud in 20141

How Prevalent is Fraud?

attempted payment fraud in 2014

The typical organization loses 5% of its revenue to fraud each year2

More than 50% of companies experience a form of online banking fraud over a calendar year.3

1 AFP 2015 Payments and Fraud Control Survey2 ACFE 2014 Report to the Nations on Occupational Fraud and Abuse3 Guardian Analytics 2012 Business Banking Trust Study

1. Internal Fraud

• Operational Fraud

Types of Fraud

Operational Fraud

2. External Fraud

• Corporate Account Takeover

• Payment Fraud

3

Operational Fraud

Operational Fraud by Industry

IndustryNumber of

CasesPercentage of Survey

Median Loss

B ki & Fi i lBanking & FinancialServices

244 17.8% $200,000

Gov. & PublicAdministration

141 10.6% $64,000

Manufacturing 116 8.5% $250,000

Health Care 100 7.3% $175,000

Education 80 5.9% $58,000

Retail 77 5.6% $54,000

Insurance 62 4.5% $93,000

Other 52 3.8% $130,000

Oil and Gas 49 3.6% $450,000

4

Operational Fraud by Size of Company

©2014 Association of Certified Fraud Examiners, Inc.

Operational Fraud by Size of Company

©2014 Association of Certified Fraud Examiners, Inc.

5

Percentage of Cases

Asset Misappropriation………….. 85.4%

Types of Operational Fraud

pp p

Corruption……………………………… 36.8%

Financial Statement Fraud......... 4.8%

Median Loss

Financial Statement Fraud………. $1,000,000

Corruption………………………………. $200,000

Asset Misappropriation…………… $130,000

TypePercent of all

CasesMedian Loss

Asset Misappropriation

Billing 22.3% $100,000

Non-Cash Misappropriations 21.0% $95,000

Expense Reimbursements 13.8% $30,000

Cash on Hand 11.9% $18,000

Skimming 11.8% $40,000

Check Tampering 10.9% $120,000

Payroll 10.2% $50,000

Cash Larceny 8.9% $50,000

Cash Register Disbursements 2.8% $20,000

6

Asset Misappropriation

Education

TypeNumber of

CasesPercent of

Cases

Corruption 29 36.3%

Billing 27 33.8%

Expense Reimbursements 25 31.3%

Skimming 16 20.0%

Payroll 13 16 3%Payroll 13 16.3%

Cash on Hand 13 16.3%

Non-Cash 10 12.5%

Corruption and Billing Schemes

Shell

Legitimate

Company

Materials Order

gVendor

7

DeWitt Company – Sikeston, MO

One employee placed in charge of ordering

Corruption and Billing Schemes

One employee placed in charge of ordering materials from KT America

The owner of KT America inflated prices by an average of 3%, and split the additional funds with DeWitt’s purchasing employee.

DeWitt’s employee received an estimated $950 000 over 7 years through the kickback$950,000 over 7 years through the kickback scheme

Non-Cash Misappropriations

Employee steals supplies equipment orsupplies, equipment, or inventory from their employer

Employee steals or misuses customer information

8

Expense Reimbursements & Payroll

Expense Reimbursements PayrollEmployee’s expense report contains…

Personal Travel

Non-Existent Meals

Personal Item purchases

I fl t d i

Employee claims overtime hours not actually worked

Employee adds a non-existent (ghost) employee to the payrollInflated prices payroll

Check Tampering

Employee steals blank check stock and writes checks to th lf lithem self, an accomplice, or for personal purchases

Employee steals accounts payable check, alters payee, and deposits in their own account

9

The Perpetrators

PositionPercentage of

CasesMedian Loss

Median Months to Detect

Employee 42.0% $75,000 12

Manager 36.2% $130,000 18

Owner/Executive 18.6% $500,000 24

The Perpetrators

51.6% of perpetrators are between the ages of 31-45g

68% of perpetrators have been employed for 1-10 years

53.8% of perpetrators have a college degree

86.6% of perpetrators have never been charged or convicted of a fraud-related offense

10

The Perpetrators

The Average Perpetrator…

A 30+Age 30+

College Educated

Established and loyal Employee

Clean criminal and work historyhistory

Behavioral Red FlagsLiving Beyond Means

The Perpetrators

Present in 76 8% of casesg y

Financial Difficulties

Unusually close relationships with Vendors

Control Issues

“Wheeler-Dealer” Attitude

Divorce/Family problems

Irritable Suspicious Defensive

Present in 76.8% of cases

Irritable, Suspicious, Defensive

Addiction problems

Disgruntled with pay or authority level

Refusal to take vacation

11

As of the release of the 2014 ACFE Report to the Nations survey 58 4% of companies

The Average Result…

the Nations survey, 58.4% of companies surveyed had recovered $0.00 of stolen funds!

42.2%Tip

Detection Method

Mitigating Operational Fraud

77 4%

81.4%

Code of Conduct

External Audit

In Place Controls

2.6%

3.0%

4.2%

6.6%

6.8%

14.1%

16.0%

Surveillance/Monitoring

External Audit

Document Examination

Account Reconciliation

By Accident

Internal Audit

Management Review

45.4%

47.8%

47.8%

52.4%

54.1%

62.0%

62.6%

65.2%

70.0%

70.6%

77.4%

Anti-Fraud Policy

Fraud Training for Execs

Fraud Training for Employees

Employee Support Programs

Hotline

Independent Audit Committee

Mgt. Review

External Audit of ICOFR

Mgt. Cert. of F/S

Internal Audit

Code of Conduct

0.5%

0.8%

1.1%

2.2%

Other

Confession

IT Controls

Notified by Police

10.5%

19.9%

33.2%

33.5%

34.8%

38.6%

Rewards for Whistleblowers

Mandatory Vacation

Surprise Audits

Formal Fraud Risk …

Proactive Data Monitoring

Fraud Department

12

1. Do not rely solely on External Audits

Mitigating Operational Fraud

2. Implement appropriate internal controls

3. Perform random, internal audits and reviews

4. Provide employee and management training

5. Establish a reporting mechanism

6. Know your business and your employees

1. Corporate Account TakeoverInformation theft

External Fraud

• Information theft

• Online Banking Fraud

• Online attacks via viruses, trojans, phony websites, etc.

2. Payment Fraud• Counterfeit Checks

• Check washingCheck washing

• Fraudulent ACH Payments

13

Corporate Account Takeover

FBI Investigating Theft of $500,000 from NY School

District

Computer Crooks Steal $100,000 from Ill. Town

Cyber attackers empty business accounts in minutes

e-Banking Bandits Stole $465,000 From Calif. Escrow Firm

N.Y. Firm Faces Bankruptcy from $164,000 E-Banking Loss


Target VictimVictim

Initiate Funds

Transfer or sell Info

Install Malware

Log on to

Online Banking

Collect & Transmit

Data

14



15


Golden State Bridge – CA

$125 000 transferred via ACH over

Patco – Maine

$588 000 transferred over 5 nights$125,000 transferred via ACH over two nights

Account was hacked after an office manager visited a social networking site and accidentally downloaded malware.

CFO had purchased proper insurance after similar fraud

$588,000 transferred over 5 nights by malware

Only recovered $200,000

Little & King – New York

Hackers stole $164,000 over a insurance after similar fraud occurred 3 years earlier

$ ,holiday weekend

Owner couldn’t recover funds, and had to merge with another agency

1. Educate Employees

2 Be wary of unsolicited emails and attachments

Mitigating Corporate Account Takeover

2. Be wary of unsolicited emails and attachments

3. Install, maintain, and update spam filters, anti-virus software, and firewalls

4. Utilize banking products such as ACH Filter or ACH Positive Pay

5. Require dual approval for all funds transfers (ACH, Wires, etc) from different computersetc) from different computers

6. Dedicate one computer as online banking computer

7. Review insurance policies to ensure these fraud schemes are covered.

16

Payments Fraud

62% of companies surveyed experienced actual or attempted fraud

AFP Survey Highlights

or attempted fraud

77% of effected companies reported their checks were targeted

Average loss was $20,000

17

How Payment Fraud Occurs

Vendor CheckVendor Check$$$

Counterfeit$$$

Counterfeit$$$

Counterfeit$$$$$$$$$$$$


Vendor CheckVendor Check$$$

Altered Check$$$$$$

18



Payroll Check$$$

RTN$$$

RTN #Acct #

19

Wire fraud increased from 14% to 27% in 2014, becoming the 3rd most targeted form of payment

Wire Schemes

becoming the 3 most targeted form of payment fraud.

1. Reduce Check Writing

Mitigating Payments Fraud

2. Frequent reconciliation (daily if possible)

3. Be the Originator of ACH transactions

4. Separate Accounts (Operating, Payroll, etc)

5. Outsource payroll to a 3rd party

6. Utilize Positive Pay and ACH Filter products

20

Association of Certified Fraud Examiners (ACFE)

A i ti f Fi i l P f i l (AFP)

Resources

Association of Financial Professionals (AFP)

FBI Fraud Advisory for Business: Corporate Account Takeover

Internet Crime Complaint Center (IC3)

National Automated Clearing House Association g(NACHA)

Thank You!

Nate Bibens UMB Bank

AVP/Treasury Management Officer

417.885.3757

[email protected]

1150 E Battlefield1150 E. Battlefield

Springfield, MO 65807

1

FINANCIALANDADMINISTRATIVE

SERVICESSERVICES

NewOMNIforAuditors

MissouriDepartmentofElementaryandSecondaryEducationMay5,2015

Effective Dates for OMNI

D b 26 2014 Di G f ED December26,2014– DirectGrantsfromED

July1,2015– StateAdministeredPrograms

July1,2016– FY16AuditsJu y , 0 6 6 ud ts

2

Audit Requirements 200.501

C h h ld $500 000 Currentthreshold$500,000 NEW:threshold$750,000

Ifnosingleauditisrequired,recordsmustbemadeavailableforrevieworauditbyofficials.y

Auditees Responsibilities 200.508

h d d Procureorarrangetheauditrequired Prepareappropriatefinancialstatements Promptlyfollow‐upandtakecorrectiveactiononauditfindings(correctiveactionplanmustbeinaseparatedocument,notintheaudit§200.511)

Providetheauditorwithaccesstopersonnelandrecords

3

Report Submission 200.512

Datacollectionformandreportingpackagearedue to the Federal Audit Clearinghouse withinduetotheFederalAuditClearinghousewithintheearlierof30calendardaysafterreceiptofreportorninemonthsaftertheendofauditperiod

DataCollectionForm ReportingPackage Reportretentionrequiredfor3yearsfromdatesubmitted

Audit Reporting 200.515

Auditreport(s)muststatethattheauditwasconducted in accordance with §200 515 auditconductedinaccordancewith§200.515auditreporting

Andinclude: Anopiniononthefinancialstatements Areportoninternalcontroloverfinancialreportingandcompliancewithprovisionsoflaws,regulations,p p , g ,andawardagreements

Reportoncomplianceforeachmajorprogramandreportoninternalcontrolovercompliance

Scheduleoffindingsandquestionedcosts

4

Audit Finding 200.516

Significantdeficienciesandmaterialweaknessesand significant instances of abuseandsignificantinstancesofabuse

Materialnoncompliance Knownquestionedcostsgreaterthan$25,000foramajorprogramandnonmajorprogram

Reasonformodifiedopiniononmajorprogram

Audit Finding 200.516 cont.

l k l f d ff f d l d Knownorlikelyfraudaffectingafederalaward Auditfindingdetailandclarity Referencenumbers

5

Major Program Determination 200.518

RiskbasedapproachtodeterminewhichFederalprograms are major programsprogramsaremajorprograms. Processinparagraphs200.518(b)through(h)mustbefollowed.

(b)IdentifyTypeAprograms (c)IdentifyTypeAprogramswhicharelow‐risk(d) Id tif T B hi h hi h i k (d)IdentifyTypeBprogramswhicharehigh‐risk

(e)AuditormustauditallTypeAprogramnotidentifiedaslowriskandallTypeBprogramsidentifiedashighriskasmajorprograms

Major Program Determination 200.518

(f) Percentage of coverage rule (f)Percentageofcoveragerule Low‐riskauditee– 20% High‐riskauditee– 40%

(g)Documentationofrisk (h)Auditor’sjudgment

6

Criteria for Low Risk Auditee 200.520

S l d f d ll l d Singleauditsperformedannually,includingsubmissionofdatacollectionandreportingpackagetotheFederalAuditClearinghouse

Auditor’sopiniononthefinancialstatementsandSEFAwereunmodified

Nomaterialweaknessesininternalcontrolwereidentified

Criteria for Low Risk Auditee 200.520

A d d d Auditordidnotreportagoingconcern Noneofthefederalprogramshadauditfindingsinpriortwoauditperiods

7

Questions

Contact

ToniWade,[email protected] 751 9437

Contact

573‐751‐9437

Date post:	05-Sep-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

Tuesday, May 5 | Columbia - MOCPA home · 1 2015 Governmental Audit Quality Center (GAQC) Annual...

Documents