Single Audits & The Recovery Act 3/27/2017 11:29 PM Single Audits & The Recovery Act Gilbert Tran Senior Technical Manager Office of Management & Budget © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Topics Recovery Act and Its Impact & Coverage in Single Audits 2009 Compliance Supplement Appendix VII Addendum # 1 Single Audit Internal Control Project Single Audits & the Recovery Act ---AGA PDC Conference OMB Guidance (2/18 & 4/3) Direct agencies to perform risk assessment on all programs receiving Recovery funds to determine whether they should be listed as “high-risk” for Single Audit purpose. Agencies use past single audits on their programs to make assessment. Require that all Recovery programs and Recovery funds under existing programs to be separately identified for financial and audit reporting (on the Schedule of Expenditures for Federal Awards and the Data Collection Form). The requirements extend to subrecipients. All single audits will be displayed on the Federal Audit Clearinghouse public website 2009 Compliance Supplement, Appendix VII (5/09) Require that a type A program receiving Recovery dollars should be listed as a “high risk” program for single audit purpose and should be included as a major program to be reviewed. (Type A program is program that is material in dollar expenditures for a particular grantee --$300 k or 3% of total Federal awards expenditures for grantees with $300K - $100 Million Federal expenditures) Require that any cluster with a new Recovery program should be considered as a new program and would not qualify as “a low risk Type A program.” Include a guide to auditors performing single audits to highlight the new requirements for Recovery funds. Appendix VII Addendum (planned for July 2009) Add more instructions regarding the testing of internal controls and new reporting requirement for Recovery programs. Encourage auditors to report the result of its internal control review early to recipient’s management List the new clusters with Recovery programs Add compliance requirements for 20+ Recovery programs including the Department of Education’s State Fiscal Stabilization Fund ($150 Billion budget) Evaluating alternatives to provide auditors some relief in light of the expanded scope for Recovery programs. $787,000,000,000 11

“Spending Stimulus take Money” “We’re going to operate in a transparent fashion so that taxpayers know this money is not being wasted on a bunch of boondoggles” President Obama, Washington Post, June 12, 2009

OMB Guidance -- 02/18, 04/03, 06/22 Agency use SA for program risk assessment Agency use SA for program monitor Separate ARRA CFDA, separate reporting on SEFA and DCF (including subrecipients) Federal Audit Clearinghouse to display all single audits New Appendix VII of 2009 Compliance Supplement - 05/06 highlights audit requirements for ARRA programs Addendum to the CS -- 08/05 More detail requirements on ARRA programs Guidance on Internal Control Review New Cluster Listing ARRA program compliance requirements in Part 4 11

Key Guidance in Appendix VII relates to: • CFDA Numbers / Identifying Recovery Act programs • Effect of Expenditures of Recovery Act Awards on Major Program Determination • Award Terms and Conditions and Compliance Requirements • Schedule of Expenditures of Federal Awards (SEFA)

New Appendix VII of 2009 Compliance Supplement - 05/06 highlights audit requirements for ARRA programs Require that a type A program receiving Recovery dollars should be listed as a “high risk” program for single audit purpose and should be included as a major program to be reviewed Require that any cluster with a new Recovery program should be considered as a new program and would not qualify as “a low risk Type A program.” Include a guide to auditors performing single audits to highlight the new requirements for Recovery funds. Single Audits & the Recovery Act ---AGA PDC Conference OMB Guidance (2/18 & 4/3) Direct agencies to perform risk assessment on all programs receiving Recovery funds to determine whether they should be listed as “high-risk” for Single Audit purpose. Agencies use past single audits on their programs to make assessment. Require that all Recovery programs and Recovery funds under existing programs to be separately identified for financial and audit reporting (on the Schedule of Expenditures for Federal Awards and the Data Collection Form). The requirements extend to subrecipients. All single audits will be displayed on the Federal Audit Clearinghouse public website 2009 Compliance Supplement, Appendix VII (5/09) Require that a type A program receiving Recovery dollars should be listed as a “high risk” program for single audit purpose and should be included as a major program to be reviewed. (Type A program is program that is material in dollar expenditures for a particular grantee --$300 k or 3% of total Federal awards expenditures for grantees with $300K - $100 Million Federal expenditures) Require that any cluster with a new Recovery program should be considered as a new program and would not qualify as “a low risk Type A program.” Include a guide to auditors performing single audits to highlight the new requirements for Recovery funds. Appendix VII Addendum (planned for July 2009) Add more instructions regarding the testing of internal controls and new reporting requirement for Recovery programs. Encourage auditors to report the result of its internal control review early to recipient’s management List the new clusters with Recovery programs Add compliance requirements for 20+ Recovery programs including the Department of Education’s State Fiscal Stabilization Fund ($150 Billion budget) Evaluating alternatives to provide auditors some relief in light of the expanded scope for Recovery programs. 11

Addendum #1 to CS -- 08/05 Overview—Purpose of the addendum Part 2 matrix for added programs (41 new ARRA programs) Part 3 additions to-- (A) Allowable Activities, (D)Davis-Bacon, (I) Procurement, (L) Reporting , (M) Subrecipient Monitoring, (N) Special Tests and Provisions Part 4- Program additions (43 programs including 14 clusters) CFDA 84.394, 84.397 HHS Programs Part 5- Updated and New clusters Part 6- Internal Control   11

Single Audit Pilot Project Early Communication on Internal Controls of ARRA programs Timely & useful information for management and Federal agencies on ARRA Programs Early corrections & Resolution of deficiencies Volunteer States and selected ARRA Programs Selected areas of internal controls Timeframe and Status