The document provides an overview of single audit fundamentals and what auditors look for in a single audit. It discusses statutory authority, roles of various organizations, and OMB's single audit policies. It outlines requirements for audit procurement, preparation of the Schedule of Expenditures of Federal Awards (SEFA), audit fieldwork procedures, and use of the OMB Compliance Supplement to identify key compliance requirements. The document also addresses audit reporting, report submission, audit follow-up, and alternative compliance examination engagements allowed under the SLFRF program.

1. AUDIT READINESS—WHAT
ARE THE AUDITORS LOOKING
FOR?
Collaborating, Innovating,
Transforming: 2023 Economic
Development Conference for the
EDA Denver Region
April 11, 2023
Presented by Bob Lloyd

2. SINGLE AUDIT
FUNDAMENTALS
• Statutory Authority
--- Inspector General Act of 1978 (as
amended)
--- Single Audit Act of 1964 (as amended)
• Roles
--- Office of Management and Budget (OMB)
--- Federal Inspectors General
--- Federal Awarding Agencies
--- Government Accountability Office (GAO)
--- Recipient and Subrecipient Management
--- “Community of Independent Auditors”
• Relationship to Other Audit Requirements
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3. OMB’S
SINGLE
AUDIT
POLICIES
• Subpart F, 2 CFR 200
• Appendix X, 2 CFR 200
--- Data Collection Form (SF-SAC)
• Appendix XI, 2 CFR 200
--- Annual Compliance Supplement
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4. AUDIT
PROCUREMENT
• 2 CFR 200.509
• Subject to 2 CFR 200.317-327
--- Purchase Thresholds (2 CFR 200.320)
--- Requirements for Proposals
• Stated Criteria for Selection
• Requirement to Obtain Most Recent
Peer Review Report
• Resulting Contract (2 CFR 200,
Appendix II)
--- Division of Responsibility
--- Assigned Personnel
--- Stipulations on Required Additional
Work
--- Stipulations on Access to Workpapers
• Allowability of Cost (2 CFR 200.425)
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5. PREPARATION
OF THE SEFA
• 2 CFR 200.510(b)
• Management Responsibility
• Award Coverage (2 CFR 200.502)
• Assistance Listing Numbers
(Formerly CFDA Numbers)
• Recognition of Expenditure
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6. AUDIT
FIELD
WORK
• Applicable Auditing Standards
--- Generally Accepted Government
Auditing Standards (GAO)
--- Generally Accepted Auditing
Standards (AICPA)
• Financial Statements
• Major Program Determination
--- Dollar Size
--- Assessment of Risk (2 CFR 200.519)
• Internal Control (2 CFR 200.514(c))
--- Possible Multiple Control Scenarios
--- Pre-pandemic vs. Pandemic-related
• Compliance
--- Role of the Compliance Supplement
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7. OMB’S
COMPLIANCE
SUPPLEMENT
• Supplement to What?
• Placeholder at 2 CFR 200, Appendix XI
• Annual Issuance by OMB (with Input
from Federal Awarding Agencies
• 2022 Version
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8. THE
SUPPLEMENT’S
PARTS AND
HOW THEY FIT
TOGETHER
• Part 2—Matrix of Compliance
Requirements
• Part 3—Compliance Requirements
• Part 4—Agency Program
Requirements
• Part 5—Clusters of Programs
• Part 6—Internal Control
• Guidance for Auditing Programs Not
Included in the Supplement
• Appendices
--- Revisions to Appendix VI—Other
Audit Advisories (COVID-19 Related)
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9. THE MATRIX
AND THE KEY
COMPLIANCE
REQUIREMENTS
• By Assistance Listing (CFDA)
Number
• Federal Agencies and Pass-
through Entities Must Provide
Numbers in Award Agreements (2
CFR 200.211; 2 CFR 200.332(a))
• Twelve Administrative Topics
(Actually More)
• Federal Agencies Select Six to be
Used for Their Programs Listed
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10. USING THE
SUPPLEMENT
FOR AUDIT
READINESS
• Components of the Part 3 Listings
--- Compliance Requirement with
Citations to Laws and Regulations
--- Audit Objectives
--- Suggested Audit Procedures
----- What Steps Should the Auditor
Take?
----- Possible Documentation to be
Examined
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11. GENERAL
REQUIREMENTS
FROM PART 3
OF THE
SUPPLEMENT
• Activities Allowed or Unallowed
--- “Eligible Activities”
• Allowable Costs/Cost Principles
--- General tests
--- Allowability of Selected Items
--- Indirect Cost Recovery
• Cash Management
--- Timely Drawdown and Disbursement
--- Size of Drawdowns
--- Interest Issues
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12. COMPLIANCE
REQUIREMENTS
(CONTINUED)
• Eligibility (Recipients, Subrecipients,
Beneficiaries)
• Equipment Management
--- Property Records
--- Timely Inventory
• Real Property Management
• Matching/Cost Sharing
• Level of Effort (Maintenance of Effort)
• Earmarking
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13. COMPLIANCE
REQUIREMENTS
(CONTINUED)
• Performance Period
--- Pre-award Costs
• Procurement
--- Noncompetitive Transactions
--- Minimum Records
--- Cost or Price Analysis
• Suspension and Debarment
• Program Income
--- Received
--- Expended on Allowable Cost
--- FIFO
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14. COMPLIANCE
REQUIREMENTS
(CONTINUED)
• Reporting
--- Financial
--- Performance
--- FFATA Reporting
• Subrecipient Monitoring
--- UEI Numbers
--- Mandatory Steps (2 CFR 200.332(d-e))
--- Subrecipient audits (2 CFR 200.332(f))
• Special Tests and Provisions
--- Federal Agency Priority Matters
• Auditors Judgment
--- Federal Agency Risk Alerts
--- OMB Designation of “High Risk” Programs
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15. CAUTIONS—
APPLICABILITY
OF COMPLIANCE
REQUIREMENTS
• KEY—What’s in Your Award
Document?
• KEY—What Was in Effect at the
Time of the Transaction
• OMB Revisions to 2 CFR 200
(Effective 11/12/20)
• The Role of Federal “Guidance”
--- OMB Flexibilities Memoranda
--- OMB FAQ’s on 2 CFR (5/4/21)
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16. THE AUDIT
REPORT
• 2 CFR 200.515
• Opinion on Financial Statements and
the SEFA
• Report on Internal Control
• Report on Compliance for Major
Programs
--- Opinion on Compliance for Major
Programs
• Schedule of Findings and Questioned
Costs
--- Known and Likely Questioned Costs
--- Audit Finding Detail
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17. REPORT
SUBMISSION
• 2 CFR 200.512
• To Federal Audit Clearinghouse (FAC)
• Normal Requirement
--- Within 9 months Following FYE or
Within 30 Days of Report Delivery
• OMB Pandemic Flexibilities—
Extensions Phased Out
• Federal Desk and Quality Control
Reviews
• Required Use of the FAC (2 CFR
200.512(b))
--- Pass-through Entity Verification of
Subrecipient Single Audit Compliance (2
CFR 200.332(f))
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18. AUDIT
FOLLOW-UP
• 2 CFR 200.511 and 2 CFR 200.521
• Summary Schedule of Prior Audit
Findings
• Schedule of Findings and Questioned
Costs
• Corrective Act Plan for Current Year
Findings
• Management Decisions
--- Deadline: 6 Months Following FAC
Acceptance of Reporting Package
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19. ALTERNATIVE
COMPLIANCE
EXAMINATION
ENGAGEMENTS
UNDER SLFRF
• OMB Approved Burden Reduction
Measure
• Eligible Organizations
--- Non-entitlement Units (NEU)
--- Total SLFRF Award < $10 Million
--- Other Federal Awards < $750,000
• GAO Standards Direct Auditors to
Follow AICPA Statements on
Standards for Attestation
Engagements
• Compliance Testing Involves: (1)
Activities Allowed or Unallowed and
(2) Allowable Cost/Cost Principles
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20. A FEW
PARTING
“SHOTS”
• Expect some continuing confusion—not just
about COVID-10 funding
• Interpreting the requirements—Who are you
going to call?
--- Appendix III of the Compliance Supplement
• Advice on testing procedures—Who is the auditor
going to call?
--- National Single Audit Staff (listed in Compliance
Supplement)
• Study and monitor the “atmosphere”
--- Federal Inspectors General website
(www.ignet.gov)
--- Pandemic Recovery Accountability Committee
(www.prac.gov)
--- Federal Audit Clearinghouse website
(harvester.census.gov.facweb)
• “Coming ‘soon’ to a town near you…
--- The 2023 OMB Compliance Supplement
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21. QUESTIONS
• Now
• Later
--- Bob Lloyd
(864) 235-8680
Consultlloyd@aol.com
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