Federal auditors may perform all or part of the work required under this part if they comply fully with the requirements of this part. WebAccording to subpart F part 200 of the Office of Management and Budget (OMB) Uniform Guidance (aka CFR): A Non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part.. 200.519 Criteria for Federal program risk. (a) An audit conducted in accordance with this part must be in lieu of any financial audit of Federal awards which a non-Federal entity is required to undergo under any other Federal statute or regulation. When the auditor is aware that the Federal agency, pass-through entity, or auditee is contesting an audit finding, the auditor must contact the parties contesting the audit finding for guidance prior to destruction of the audit documentation and reports. citations and headings A federal government website managed by the (h) Electronic filing. Choosing an item from Required components of an audit include such things as financial statements and records, expenditures, and internal controls. With no significant here. (b) Data collection. As a The payments received for goods or services provided as a contractor are not Federal awards. It is intended to provide assurance to the Federal Government that a non-federal entity has adequate internal controls in place, and is generally in compliance with program requirements. (h) For-profit subrecipient. (a) Determining Federal awards expended. Navigate by entering citations or phrases (iv) Develop a baseline, metrics, and targets to track, over time, the effectiveness of the Federal agency's process to follow-up on audit findings and on the effectiveness of Single Audits in improving non-Federal entity accountability and their use by Federal awarding agencies in making award decisions. For example, during the first and last years that an auditee participates in a Federal program, the risk may be higher due to start-up or closeout of program activities and staff. Exceed $10 billion but less than or equal to $20 billion. Factors to be considered in evaluating each proposal for audit services include the responsiveness to the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of peer and external quality control reviews, and price. Building on the Single Audit Act of 1984, the 1996 amendments laid out updated audit requirements for organizations and people who receive Federal awards. (e) Federally Funded Research and Development Centers (FFRDC). In making this determination, the auditor must consider whether the requirements in 200.519(c), the results of audit follow-up, or any changes in personnel or systems affecting the program indicate significantly increased risk and preclude the program from being low risk. (2) Federal agencies, with the concurrence of OMB, may identify Federal programs that are higher risk. Web(b) Single audit. A non-Federal entity expending more than $50 million a year in Federal awards must have a cognizant agency for audit. (4) A statement of cause that identifies the reason or explanation for the condition or the factors responsible for the difference between the situation that exists (condition) and the required or desired state (criteria), which may also serve as a basis for recommendations for corrective action. WebA Single Audit is an audit of compliance with compliance requirements defined by the Office of Management and Budget every year in the OMB Compliance Supplement. (2) The auditee must prepare the financial statement(s) for the Federal program that includes, at a minimum, a schedule of expenditures of Federal awards for the program and notes that describe the significant accounting policies used in preparing the schedule, a summary schedule of prior audit findings consistent with the requirements of 200.511(b), and a corrective action plan consistent with the requirements of 200.511(c). Major inadequacies or repetitive substandard performance by auditors must be referred to appropriate state licensing agencies and professional bodies for disciplinary action. However, the auditee is responsible for ensuring compliance for procurement transactions which are structured such that the contractor is responsible for program compliance or the contractor's records must be reviewed to determine program compliance. [78 FR 78608, Dec. 26, 2013, as amended at 79 FR 75887, Dec. 19, 2014; 85 FR 49572, Aug. 13, 2020]. When advised of deficiencies, the auditee must work with the auditor to take corrective action. (h) Medicare. (5) The possible asserted effect to provide sufficient information to the auditee and Federal agency, or pass-through entity in the case of a subrecipient, to permit them to determine the cause and effect to facilitate prompt and proper corrective action. (2) All Type B programs identified as high-risk under step three (paragraph (d) of this section). Nothing in this part must preclude electronic submissions to the FAC in such manner as may be approved by OMB. b. > Agencies In response to requests by a Federal agency or pass-through entity, auditees must submit a copy of any management letters issued by the auditor. Prior to issuing the management decision, the Federal agency or pass-through entity may request additional information or documentation from the auditee, including a request for auditor assurance related to the documentation, as a way of mitigating disallowed costs. In The corrective action plan and summary schedule of prior audit findings must include findings relating to the financial statements which are required to be reported in accordance with GAGAS. Audits to determine efficiency and economy. However, free rent received as part of a Federal award to carry out a Federal program must be included in determining Federal awards expended and subject to audit under this part. guide. (f) Percentage of coverage rule. HHS/ACF (viii) Coordinate the audit work and reporting responsibilities among auditors to achieve the most cost-effective audit. The cumulative balance of Federal awards for endowment funds that are federally restricted are considered Federal awards expended in each audit period in which the funds are still restricted. When information, such as the Assistance Listings title and number or Federal award identification number, is not available, the auditor must provide the best information available to describe the Federal award. When an auditee expends Federal awards under only one Federal program (excluding R&D) and the Federal program's statutes, regulations, or the terms and conditions of the Federal award do not require a financial statement audit of the auditee, the auditee may elect to have a program-specific audit conducted in accordance with 200.507. (c) Pass-through entity. WebThe single audit is generally conducted by an independent certified public accountant or state auditor and is intended to assess whether the recipient spends federal funds properly. The auditor must follow-up on prior audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit findings prepared by the auditee in accordance with 200.511(b), and report, as a current year audit finding, when the auditor concludes that the summary schedule of prior audit findings materially misrepresents the status of any prior audit finding. Although the Single Auditrequirement applies to most of the CARES Act funds and programs, you should review the Assistance Listing, available at A Federal agency that conducts or arranges for additional audits must, consistent with other applicable Federal statutes and regulations, arrange for funding the full cost of such additional audits. A cluster of programs is treated as one program and the value of Federal awards expended under a loan program is determined as described in 200.502. Any biennial audit must cover both years within the biennial period. (iii) Oversee training for the Federal awarding agency's program management personnel related to the single audit process. As part of audit follow-up, the Federal awarding agency must: (i) Issue a management decision as prescribed in 200.521; (ii) Monitor the recipient taking appropriate and timely corrective action; (iii) Use cooperative audit resolution mechanisms (see the definition of cooperative audit resolution in 200.1 of this part) to improve Federal program outcomes through better audit resolution, follow-up, and corrective action; and. Generally, the activity pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: expenditure/expense transactions associated with awards including grants, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, cooperative agreements, and direct appropriations; the disbursement of funds to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property; the receipt of surplus property; the receipt or use of program income; the distribution or use of food commodities; the disbursement of amounts entitling the non-Federal entity to an interest subsidy; and the period when insurance is in force. formatting. Each audit finding in the schedule of findings and questioned costs must include a reference number in the format meeting the requirements of the data collection form submission required by 200.512(b) to allow for easy referencing of the audit findings during follow-up. (ii) Obtain or conduct quality control reviews on selected audits made by non-Federal auditors, and provide the results to other interested organizations. The auditor's determination of whether a deficiency in internal control is a significant deficiency or a material weakness for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program identified in the Compliance Supplement. This depends on the type of Federal financial assistance being provided by the Federal agency through the CARES Act. Web 200.501 Audit requirements. (d) Other sections of this part may apply. A non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with 200.514 except when it elects to have a program-specific audit conducted in accordance with paragraph (c) of this section. Basis for determining Federal awards expended. U.S. Department of Health & Human Services The auditor must determine whether the financial statements of the auditee are presented fairly in all material respects in accordance with generally accepted accounting principles. However, the auditor must report a significant deficiency or material weakness in accordance with 200.516, assess the related control risk at the. (a) Financial statements. Loans, the proceeds of which were received and expended in prior years, are not considered Federal awards expended under this part when the Federal statutes, regulations, and the terms and conditions of Federal awards pertaining to such loans impose no continuing compliance requirements other than to repay the loans. It is not an official legal edition of the CFR. (3) The phase of a Federal program in its life cycle at the auditee may indicate risk. 2) The Single Audit requirement applies to non-federal entities. B. The auditor's report(s) must state that the audit was conducted in accordance with this part and include the following: (a) Financial statements. (a) Auditor procurement. WebThe Single Audit provides the Federal government with assurance that these recipients comply with such directives by having an independent external source (the CPA) report Except for audit follow-up, the auditor is not required under this part to perform audit procedures for such a Federal program; therefore, the auditor will normally not find questioned costs for a program that is not audited as a major program. WebSingle Audit Determination. (7) Information to provide proper perspective for judging the prevalence and consequences of the audit findings, such as whether the audit findings represent an isolated instance or a systemic problem. Does the Single Audit requirement apply to CARES Act funding? WebQ-10. This content is from the eCFR and may include recent changes applied to the CFR. (3) Findings and questioned costs for Federal awards which must include audit findings as defined in 200.516(a). Medicare payments to a non-Federal entity for providing patient care services to Medicare-eligible individuals are not considered Federal awards expended under this part. The auditee, after consultation with its auditor, should promptly respond to such a request by informing the Federal awarding agency whether the program would otherwise be audited as a major program using the risk-based audit approach described in 200.518 and, if not, the estimated incremental cost. SEFA vs. SF-SAC). All audits of state and local government reporting entities. The auditee must electronically submit to the FAC the data collection form described in paragraph (b) of this section and the reporting package described in paragraph (c) of this section. Single Audit Requirements. [78 FR 78608, Dec. 26, 2013, as amended at 85 FR 49570, Aug. 13, 2020]. A pass-through entity may use the provisions of this paragraph for a subrecipient. The auditor's report(s) must state that the audit was conducted in accordance with this part and include the following: (i) An opinion (or disclaimer of opinion) as to whether the financial statement(s) of the Federal program is presented fairly in all material respects in accordance with the stated accounting policies; (ii) A report on internal control related to the Federal program, which must describe the scope of testing of internal control and the results of the tests; (iii) A report on compliance which includes an opinion (or disclaimer of opinion) as to whether the auditee complied with laws, regulations, and the terms and conditions of Federal awards which could have a direct and material effect on the Federal program; and. (c) Corrective action plan. including individuals with disabilities. full text search results (c) Program-specific audit election. For example, requirements that may be applicable under the FAR or CAS and the terms and conditions of a cost-reimbursement contract may include additional applicable audits to be conducted or arranged for by Federal agencies. 200 Independence Avenue, S.W. Where there have been changes to the compliance requirements and the changes are not reflected in the compliance supplement, the auditor must determine the current compliance requirements and modify the audit procedures accordingly.