Uniform Guidance Discussion SPARC Presentation Uniform Guidance Discussion

Overview of Single Audit Selection Federal programs are either Type A or Type B. Type A or B determination performed at statewide level and based on amount of federal expenditures in a given fiscal year. Type A are higher expenditure programs Must be audited at least once every 3 years. Exceptions: Prior year findings; significant changes in personnel or systems. Type B programs selected based on risk assessment criteria. No 3 year requirement.

Planning and Fieldwork Summary Starting point for planning is the annual Compliance Supplement issued by the Office of Management and Budget (OMB). We cross-reference to the previous year’s Supplement to determine if any requirement changes. Not all requirements are tested – only those deemed material. Materiality is based on SEFA expenditures.

Planning and Fieldwork Summary (continued) We conduct risk-assessment meetings as part of planning and throughout fieldwork. We maintain internal control narratives for all compliance requirements. These are updated annually by the client. We verify that each control identified has been placed in operation during the fiscal year.

Planning and Fieldwork Summary (continued) Once controls have been identified and verified, we design our test procedures. For most requirements, we test via sampling procedures. Sample sizes are based on the risk of material noncompliance. Sizes increased if noncompliance identified. We design dual-purpose tests of controls and compliance as much as possible for efficiency.

For-Profit Subrecipients Question received: What is required under Uniform Guidance - how does this differ from other types of subrecipients? Expectations for flow down requirements and related monitoring for-profit subrecipients.

For-Profit Subrecipients 2016 Compliance Supplement: M. SUBRECIPIENT MONITORING Compliance Requirements Ensure Accountability of For-Profit Subrecipients For-profit subrecipients are accountable to the PTE for the use of the Federal funds provided PTE is responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients for the subaward.

For-Profit Subrecipients 2016 Compliance Supplement: M. SUBRECIPIENT MONITORING Compliance Requirements Ensure Accountability of For-Profit Subrecipients The agreement with the for-profit subrecipient must describe applicable compliance requirements  and the for-profit subrecipient's compliance responsibility. Methods to ensure compliance for Federal awards made to for-profit subrecipients may include pre-award audits, monitoring during the agreement , and post-award audits.

For-Profit Subrecipients Difference from other Subrecipients? For-profit subrecipients not required to have single audit Same as other Subrecipients Must describe applicable compliance requirements Monitor during agreement Evaluate risk See Handout #1

For-Profit Subrecipients Applicable compliance requirements flow down to subrecipients Monitoring involves judgment Applicable requirements (complexity) Risk assessment Amount or percentage passed through Types and level of monitoring could vary

Subrecipient Risk Assessment Question received: Expectations for reliance on the Federal Audit Clearing House (FAC) for single audit status/confirmation, as prescribed by Uniform Guidance, for subrecipient risk assessment

Subrecipient Risk Assessment 2016 Compliance Supplement: M. SUBRECIPIENT MONITORING Compliance Requirements Evaluate Risk – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward (2 CFR section 200.331(b)). The results of previous audits including whether or not the subrecipient receives single audit in accordance with 2 CFR part 200, subpart F, and the extent to which the same or similar subaward has been audited as a major program;

Subrecipient Risk Assessment Federal Audit Clearinghouse (FAC) Search for single audits submitted to FAC Maintain a public database of completed audits General audit information Findings information (Yes/No indicators) Agency information CFDA, EIN, DUNS CPA information Pass-through information Review single audit reports for results and details. Note: Single audit results – only one factor of risk assessment

Time and Effort Reporting Alternatives Reference Handout #2 for complete listing of requirements from Part 5 of the Compliance Supplement. Internal control system must provide assurance charges are accurate, allowable, and properly allocated. Part 5 wording is broad and gives institutions latitude to design a system that works best for its individual needs.

Time and Effort Reporting Alternatives (continued) Note that the entity’s policies for T&E reporting alternatives are binding, as the entity must comply with its own policies. Payroll/Project Certifications: Acceptable internal control? We would need to know more details, but a certification with independent review (i.e. by supervisor) appears to be a well designed control.