Presented by

Raaj Kurapati

and

Charlene Hart

Introduction

The Single Audit Act Amendments of 1996 was enacted to streamline and improve the effectiveness of audits of federal awards and to reduce the audit burden on states, local governments, and not-for profit entities.

The Act requires the audits to be conducted by an independent auditor.

Introduction The Act gives the Director of OMB the

authority to develop government-wide guidelines and policy on performing audits to comply with the act.

The OMB issued Circular A-133 to establish audit guidelines and policy for a uniform system of auditing expenditures of federal awards.

Individual federal departments and agencies have adopted Circular A-133 in regulation.

Administrative Requirements Administrative requirements that apply

to most programs arise from two sources:The “Uniform Administrative Requirements

for Grants and Cooperative Agreements to State and Local Governments” (also knows as the “A-102 Common Rule”) and 2 CFR part 215

Administrative Requirements

The “Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations” and the agencies’ codification of OMB Circular A-110

Administrative Requirements OMB A-21 – Cost Principles for

Educational Institutions (2 CFR part 220)All institutions of higher education are

subject to the cost principles contained in OMB Circular A-21, which incorporates the four Cost Accounting Standards Board (CASB) and the Disclosure Statement (DS-2) requirements as described in OMB Circular A-21, sections C.10 through C.14 and Appendices A and B.

Administrative Requirements OMB Circular A-133 describes the non-

Federal entity’s responsibilities for managing Federal assistance programs (§___.300) and the auditor’s responsibility with respect to the scope of audit (§___.500). Auditors are required to follow the provisions of OMB Circular A-133 and this Supplement.

A-133 Compliance Supplement A-133 Compliance Supplement

Updated annually.Serves to identify existing types of

compliance requirements that the federal government expects to be considered as part of an audit in accordance with the Single Audit Act Amendments of 1996 and Circular A-133.

The Circulars and Supplements can be located at

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

A-133 Compliance Supplement The compliance supplement provides a

source of information to understand the federal program’s objectives, procedures and types of compliance requirements.

Internal Controls

Circular A-133 defines Internal Controls over Federal Programs as:Internal control pertaining to the compliance

requirements for federal programs means a process – effected by an entity’s management and other personnel – designed to provide reasonable assurance regarding the achievement of three objects for federal programs.

Internal Controls

1. Transactions are properly recorded and accounted for to:a. Permit the preparation of reliable financial

statements and federal reports.

b. Maintain accountability over assets; and

c. Demonstrate compliance with laws, regulations, and other compliance requirements.

Internal Controls

2. Transactions are executed in compliance with:a. Laws, regulations, and the provisions of contracts

or grant agreements that could have a direct and material effect on a federal program; and

b. Any other laws and regulations that are identified in the compliance supplement.

3. Funds, property, and other assets are safeguarded against loss from unauthorized use or disposition.

OMB CIRCULAR A-13314 Types of Compliance Requirements Activities Allowed or Unallowed Allowable Costs/Cost Principles Cash Management Davis-Bacon Act Eligibility Equipment and Real Property

Management Matching, Level of Effort, Earmarking

OMB CIRCULAR A-13314 Types of Compliance Requirements Period of Availability of Federal Funds Procurement and Suspension and

Debarment Program Income Real Property Acquisition/Relocation

Assistance Reporting

OMB CIRCULAR A-13314 Types of Compliance Requirements Subrecipient Monitoring Special Tests and Provisions

American Recovery and Reinvestment Act (ARRA) The ARRA Act of 2009 was enacted in

February 2009 and was designed to stimulate the U.S. economy.

The total cost of the spending in the ARRA is $787 billion dollars, a significant portion of which will become subject to single audit requirements.

American Recovery and Reinvestment Act (ARRA) Has significant implications for audits

performed under OMB Circular A-133 OMB Circular A-133 provides additional

guidance for ARRA requirements that relate to the following sections:Activities Allowed or UnallowedDavis-Bacon ActProcurement and Suspension and DebarmentReportingSubrecipient MonitoringSpecial Tests and Provisions

American Recovery and Reinvestment Act (ARRA) Additional considerations of ARRA funds

Recipients and subrecipient of ARRA funds are subject to significant additional compliance requirements.

One significant requirement is that ARRA funds are to be segregated and tracked separately from non-ARRA funds and the segregation will have to carry through to the Schedule of Expenditure of Federal Awards (SEFA) and the Data Collection Form.

American Recovery and Reinvestment Act (ARRA) Another additional compliance

requirement relates to the reporting of expenditures of ARRA funds by recipients and certain subrecipients.

American Recovery and Reinvestment Act (ARRA) Oversight of ARRA funding

The inspectors general across government are expected to audit the programs, grants and projects funded under the ARRA. They are also charged with performing quality control reviews of single audits performed on recipients that have expended ARRA funds.○ These reviews are expected for 2010 and

2011 single audits. Results likely will be make public.

Q & A Time