Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Coping with Federal Grant Oversight: Lloyd

8 views

Published on

This presentation was delivered at NADO's 2018 Annual Training Conference, held in Charlotte, NC on October 13-16. For more information, visit: https://www.nado.org/events/2018-annual-training-conference/

Published in: Government & Nonprofit
  • Be the first to comment

  • Be the first to like this

Coping with Federal Grant Oversight: Lloyd

  1. 1. Coping with Federal Grant Oversight NADO Annual Training Conference October 15, 2018 Presented by Bob Lloyd 1
  2. 2. Here’s Looking at You, Kid! • Monitoring --- Federal agencies—prime recipients --- Pass-through entities—subrecipients --- Pass-through entities—contractors • Auditing --- Federal audits --- Non-federal audits 2
  3. 3. Scope of Reviews • Financial • Compliance • Economy and efficiency • Program results • Records retention and access (2 CFR 200.333)— All “records pertinent to a Federal award” 3
  4. 4. Federal Monitoring • Permissive (2 CFR 200.328(e))— Federal agency “may make site visits as warranted by program needs.” • Absence of specific standards • Impact of Government Performance and Results Act (GPRA) • Federal site visit checklist examples --- FTA --- HUD --- DOJ • Desk reviews 4
  5. 5. Pass-through Entity Monitoring • What to expect (2 CFR 200.331 d-f) • Pass-through entity must monitor activities of subrecipients as necessary to ensure compliance and performance --- Review of financial and performance reports --- Correction of identified deficiencies --- Issuance of management decisions on relevant audit findings --- Verify single audit compliance through use of the Federal Audit Clearinghouse 5
  6. 6. Pass-through Entity Monitoring • Optional steps --- Provide training and technical assistance --- Perform on-site reviews --- Arrange agreed-upon procedures audits of entities that are not required to arrange for a single audit • Contract administration (2 CFR 200.318(b)) 6
  7. 7. Auditing • Auditing Standards --- Generally Accepted Government Auditing Standards (GAGAS) aka “the Yellow Book.” --- Generally Accepted Auditing Standards (GAAS) --- Attestation Standards • Key Elements --- Independence --- Qualifications --- Due Professional Care --- Quality Control 7
  8. 8. Federal Audit Policy Affecting Grants • Federal Audits --- Authority ----- Budget and Accounting Act of 1921 ----- Inspector General Act of 1978 --- Offices of Inspectors General ----- Required reliance on non-federal audits --- Independent auditors under contract to OIG’s --- Government Accountability Office • Non-federal Audits --- Single Audit Act of 1984 --- Subpart F, 2 CFR 200 (supersedes OMB Circular A-133) 8
  9. 9. Federal Audits • Setting audit priorities --- Vulnerability --- Requirement of statute or regulation --- Management request or emphasis --- Newness, changed conditions --- Dollar magnitude --- Prior audit experience --- Extent of federal participation --- Availability of audit resources --- Availability of other audit reports • www.ignet.gov --- Annual audit plans --- Semi-annual reports to Congress --- Audit report archives 9
  10. 10. State Audits • Independent State Auditors • CPA’s under contract to State Auditors • General reliance on GAAS and GAGAS 10
  11. 11. Single Audits • Scope --- Accuracy of financial statements and Schedule of Expenditures of Federal Awards (SEFA) --- Evaluation of internal controls over financial reporting, assets, and compliance --- Compliance with laws, regulations, and award terms that could have a direct and material effect on federal claims 11
  12. 12. Single Audits • Auditor’s determination of major programs --- Dollar size (2 CFR 200.518) --- Audit risk (2 CFR 200.519) • Audit testing --- Importance of the OMB Compliance Supplement --- The “Cliff’s Notes of Grant Administration” --- 12 required compliance areas --- Suggestions for testing methods 12
  13. 13. Cost Allowability • Federal audits--2 CFR 200.503(d) --- “Full cost” borne by federal agency • Non-federal audits—2 CFR 200.425 --- No “back door” single audits 13
  14. 14. Resolution Activities • Communication during field work • Meaningful discussion at exit conference • Written response to draft report • Full text of response in final report • Self-directed corrective action plan 14
  15. 15. Results of Oversight • Monitoring reports --- Findings --- Concerns • Audit reports --- Opinions --- Reports --- Standards for findings • Management letters 15
  16. 16. Types of Findings • Fraud • Illegal acts • Noncompliance • Internal control --- Material weakness --- Significant deficiency 16
  17. 17. Questioned Costs • Unallowable (2 CFR 200.403, 2 CFR 200.420- 475) • Unreasonable (2 CFR 200.404) • Unapproved (when required) (2 CFR 200.407) • Unsupported (2 CFR 200.403) --- Audit standards of evidence 17
  18. 18. Attributes of Findings • Federal program and award identification • Criteria • Condition found • Cause • Asserted effect • Questioned costs, if any • Perspective • Repeat finding • Recommendation • Views of management 18
  19. 19. Follow-up and Resolution • Management decisions (PL 100-504, 2 CFR 200.521) • Corrective action plans (2 CFR 200.511(c)) • Summary schedule of prior audit findings (2 CFR 200.511(b)) 19
  20. 20. Your Response • Are they correct? • If yes, concur or partially concur • Don’t wait for a management decision • “Lead the parade” to fix the problem • Formulate your own corrective action plan • Focus on the cause 20
  21. 21. Your Response • Are they wrong? • Substandard conduct of review --- Departure from standards • Sample size --- Isolated incident vs. systemic problem • “Deconstructing” findings • Faulty interpretation --- Multiple valid interpretations --- Silence 21
  22. 22. Your Response—On Non-compliance • Good faith effort/Reasonable belief • Procedural vs. substantive • Mitigating facts and circumstances • Little or no harm to awarding agency • No past adverse impact on program or beneficiaries • Potential future adverse impact on program or beneficiaries 22
  23. 23. Your Response—On Internal Control • Changes to policies and procedures • Reinforcement of existing policies and procedures • Training • Sanctions • Remedies related to “lower tier” organizations 23
  24. 24. Questions • Now • Later --- Bob Lloyd --- consultlloyd@aol.com --- Telephone: (864) 235-8680 --- Fax: (864) 235-1465 24

×