1. Federal Schedule Webinar Presented in Conjunction with ODJFS January 11, 2012 Rhonda Kline, CPA Accounting & Auditing Division

2. Agenda What is a Federal Schedule? Auditee Responsibilities Reporting JFS programs Federal Schedule Completeness Common Federal Schedule Errors Impact of Errors on County Audit

3. What is a Federal Schedule? Schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements Required by Circular A133 §_.310(b)

4. What is a Federal Schedule? Often referred to as: –SFAE Schedule of Federal Awards Expenditures –SEFA Schedule of Expenditures of Federal Awards –Federal Schedule

5. Federal Schedule Auditee Responsibilities (Circular A133 §_.310) 1.List individual Federal programs by Federal agency For Federal programs included in a cluster of programs, list individual Federal programs within a cluster of programs 2.Awards received as a subrecipient include: –Name of the pass-through entity –Identifying number assigned by the pass-through entity subgrant agreement number for JFS programs

6. Federal Schedule Auditee Responsibilities (Circular A133 §_.310) 3.Provide total Federal awards expended for each individual program and the CFDA number  ARRA (Stimulus) expenditures are listed separately within the program 4.Include notes that describe the significant accounting policies used in preparing the Federal Schedule

7. Federal Schedule Auditee Responsibilities (Circular A133 §_.310) 5.Pass through entities should identify in the Federal Schedule the total amount provided to subrecipients from each program 6.Include in the Federal Schedule or notes value of Federal awards expended in the form of:  Noncash assistance  Loans or loan guarantees outstanding at year end

8. Federal Schedule & Footnote Examples

9. Federal Schedule Opinion OMB Circular A133 §___.500(b) The auditor shall determine whether the financial statements of the auditee are presented fairly in all material respects in conformity with generally accepted accounting principles. The auditor shall also determine whether the schedule of expenditures of Federal awards is presented fairly in all material respects in relation to the auditee's financial statements taken as a whole.

10. Federal Schedule Opinion Different than Federal Program Compliance Opinion Part of Financial Statement Opinion letter or A133 compliance letter

11. Reporting JFS Programs Not all awards received by a County JFS are Federal Review funding to determine source: –Federal –State –Local Only Federal expenditures are reported on the Federal Schedule

12. Reporting JFS Programs Struggle – –Determining the Federal Expenditures by program –Complex nature of the FTE / RMS process for program expenditure allocation –CFIS / QuIC+ Systems –Where to report? State or local level

13. Reporting JFS Programs AOS Resources http://www.auditor.state.oh.us/services/lgs /publications/AuditorsForms/AuditForms /faccrs.htm County Job & Family Services FACCRs and Related Information is located at the bottom of the page.

14. Reporting JFS Programs AOS Resources County Job & Family Services FACCRs and Related Information –County Job and Family Services FACCRs  Federal Award Compliance Control Records (program testing procedures)  2011 updates in progress –ODJFS List of Programs & Applicable Requirements –County JFS SFAE Testing Spreadsheet

15. Reporting JFS Programs AOS Resources County Job and Family Services FACCRs: 1.Draft Program Testing Procedures  FACCRs developed for nine largest JFS programs reported at the County level beginning in 2009. Updated annually.  WIA FACCR not included as it has been reported by the counties for several years. It is located with other AOS FACCRs. 2.Used by AOS and IPAs auditing major programs  Auditors must modify as necessary  Auditor of State’s Office is not responsible for the accuracy or the completeness of the FACCR shells.

16. Reporting JFS Programs AOS Resources County Job and Family Services FACCRs (cont): 3.Document / Test Controls and Compliance over applicable OMB Circular A-133 Compliance Requirements FACCR format being revised for 2011 into two files: 1.Guidance 2.Testing Procedures

17. Reporting JFS Programs AOS Resources County Job and Family Services FACCR format: –Introduction Part I – OMB Compliance Supplement Information Part 2 – Other Program Information –Section for each OMB Compliance Requirement (14) Audit Objectives OMB Compliance Requirement Compliance Requirements – ODJFS Program Specific AOS Additional Testing Considerations, where applicable

18. Reporting JFS Programs AOS Resources County Job and Family Services FACCR format: –Section for each OMB Compliance Requirement (14) Document control procedures that address the specific compliance requirement Control procedures Testing –Determines level of substantive testing necessary Suggested audit procedures – Compliance (Substantive Tests) Testing results determine program compliance opinion

19. Reporting JFS Programs AOS Resources Auditors opine on program compliance in the A133 Report: Independent Accountants’ Report on Compliance with Requirements Applicable to Each Major Federal Program and on Internal Control Over Compliance Required by OMB Circular A-133

20. OMB Compliance Requirements Activities Allowed or Unallowed Allowable Costs / Costs Principles Cash Management Davis-Bacon Act Eligibility Equipment & Real Property Management Period of Availability of Federal Funds Procurement and Suspension and Debarment Program Income Real Property Acquisition and Relocation Assistance Reporting Subsequent Monitoring Special Tests and Provisions

21. Reporting JFS Programs AOS Resources ODJFS List of Programs & Applicable Requirements Lists the nine larger JFS programs Indicates where testing for each OMB Compliance Requirement will be performed (see next slide) –State level –County level Please note: State Region will still perform some State compliance testing at the local level.

22. Reporting JFS Programs AOS Resources ODJFS List of Programs & Applicable Requirements For some programs the eligibility is determined and benefits are paid by the State. For these programs Counties will report the administrative expenditures only. Example programs: –Medicaid - SCHIP –SNAP (Food Assistance) - Adoption Assistance –Child Support Enforcement –Child Care Block Grant Key to reporting: If county writes the check, the county reports the expenditures

23. Reporting JFS Programs AOS Resources County JFS SFAE Testing Spreadsheet Combined effort between AOS & ODJFS Auditors guide for testing SFAE Programs may vary by county Could be additional programs not listed on spreadsheet Does not include info for WIA programs

24. Reporting JFS Programs AOS Resources SFAE Testing Spreadsheet Example  Example is for 2010 audits  File dated 4/27/11  Updates for 2011 are in progress

25. Federal Schedule Completeness Very Important!!!!! Federal Schedule is the starting point for determining which programs must be tested

26. Federal Schedule Completeness Don’t rely on the auditors to “fix” the Federal Schedule –Nobody knows your grants better than you –Nobody knows your systems better than you –Nobody will do as good or thorough of a job than you In addition, auditors likely won’t know if there are grants: not on the Schedule but should be on the Schedule but shouldn’t be

27. Federal Schedule Completeness Determining what programs need tested –Major program determination –Risk-based approach –Circular A-133 §_.520

28. Federal Schedule Completeness Determining what percentage of coverage is necessary (50 % / 25%) –Criteria for a low-risk auditee –Circular A-133 §_.530

29. Common Federal Schedule Errors Programs not included ARRA (Stimulus) not reported separately Incomplete notes State or local expenditures reported as federal No support for amounts reported Inaccurate: –Amounts –Program names –CFDA #’s –Pass through #’s –Clustering of programs

30. Impact of Errors Errors could result in: Programs being tested that shouldn’t have been wasting time and JFS / County $$$$ Programs not being tested that should be tested auditors will be required to test if program meets criteria in Circular A133 §_.520

31. Impact of Errors If a material Federal Schedule error is noted subsequent year……… Determine if reissuance of the report is necessary.

32. Impact of Errors If a material Federal Schedule error is noted subsequent year: √If reissuance is not necessary, add footnote to current year Notes to the Federal Awards Expenditures Schedule (see footnote I in AOS report example).  Example: Job and Family Services Agency adjustments made in 2010 retroactive to October 1, 2009 between Federal programs.  2010 adjustments impacted the 2009 prior year Schedule expenditures reported and tested.

33. Impact of Errors If a material Federal Schedule error is noted subsequent year: √If reissuance is necessary: Correct the error in the Schedule Describe revisions in the notes to the Federal Schedule Auditors would : –Determine if additional testing is required –Add note in report that opines on the fair presentation of the Federal Schedule & dual date the report –Amend Summary of Auditors Results (Schedule of Findings, Section 1), if necessary »Such as to list an additional major program –Revise the opinion paragraph on compliance, if necessary

34. Completeness & Accuracy Saves Time Saves Money

35. Thank you for your time!!

36. 88 East Broad Street Columbus, Ohio 43215 Phone: (800) 282-0370 Fax: (614) 466-4490 E-mail: contactus@auditor.state.oh.us www.auditor.state.oh.us