The Uniform Guidance for Federal Awards

Transcription

1 The Uniform Guidance for Federal Awards

2 Outline Background and Overview of Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (UG or Uniform Guidance) Overview of Auditor Responsibilities Overview of Auditee Responsibilities Resources 1

3 Understanding the Effective Dates is Key! Federal Agencies Non-federal Entities Implement policies and procedures by promulgating regulations to be effective December 26, 2014 Implement the new administrative requirements and cost principles for all new Federal awards made on or after December 26, 2014, and to incremental funding made after that date Audit Requirements Effective for audits of fiscal years beginning on or after December 26, 2014 Not permitted to early implement any of the audit provisions 2

4 Implementation Challenges It will take couple of years for a full implementation of UG requirements Additional efforts will be needed in early years of implementation by auditors and auditees Staff training needs for auditors and auditees will increase training Collaborative effort will be needed to enhance audit quality Applicability of administrative and cost principles is dependent on the adoption and implementation by a federal agency. Hence, a full adoption of UG is not uniform Means that a portion of award expenditures will be under the requirements of OMB Circular A-133 and some will be under UG 3

5 Status of Final Agency Adoption Federal Register Notices as of 01/14/2016 Agency Federal Register Notice Date Corporation for National and Community Service (CNCS) November 17, 2015 Department of Agriculture (USDA) February 16, 2016 Department of Commerce July 28, 2015 Department of Education November 2, 2015 Department of Energy September 24, 2015 Department of Health and Human Services 12/19/2014 (Interim) Department of Homeland Security (FEMA) October 2, 2015 Department of Labor December 30, 2015 Department of State June 2, 2015 Department of Transportation December 17, 2015 Department of Treasury January 27, 2016 Environmental Protection Agency (EPA) October 9, 2015 Housing and Urban Development (HUD) December 7, 2015 Institute of Museum and Library Services (IMLS) September 21, 2015 National Aeronautics and Space Administration (NASA) September 16, 2015 National Archives and Records Administration August 25, 2015 National Endowment for the Humanities (NEH) September 16, 2015 National Endowment for the Arts (NEA) June 29, 2015 National Science Foundation (NSF) November 27, 2015 Office of National Drug Control Policy (ONDCP) September 23, 2015 Small Business Administration January 11, 2016 Social Security Administration November 10, 2015 US Agency for International Development (USAID) September 17, 2015 Department of Veteran s Affairs (VA) December 1,

6 Basic Structure of Uniform Guidance Six (6) Subparts as follows: Subpart A: Acronyms and Definitions Subpart B: General Provisions Subpart C: Pre-Federal Award Requirements and Contents of Federal Awards Subpart D: Post Federal Award Requirements Subpart E: Cost Principles Subpart F: Audit Requirements Twelve (12) Appendices covering a variety of other items, including: Appendix X: Data Collection Form (available on FAC website) Appendix XI: Compliance Supplement (available on OMB website) 5

7 Summary of Basic Changes Non-federal entities expending $750,000 or more (previously $500,000) in federal awards during their fiscal year Must be performed annually (applicable to most auditees; for exceptions see ) Audit must be performed under GAGAS (Yellow Book) Reinforcement of responsibilities: Auditee Auditor Federal agency Pass-through entity 6

8 Understanding Key Terms Non-Federal Entities means: States Local governments (includes county, city, municipality, town, special district, school district, etc.) Indian tribes Institutions of higher education Not-for-profit organizations Federal Award means: Federal financial assistance (receives directly or indirectly) in the form of grants, co-operative agreements, non-cash contributions or donations of property (including donated surplus property, direct appropriations, food commodities, and other financial assistance Cost-reimbursement contract under FAR (receives directly or indirectly) Loans, loan guarantees, interest subsidies and insurance 7

9 Overview of Auditor Responsibilities Determine if financial statements fairly presented Report on Schedule of Expenditures of Federal Awards (SEFA) Understand and test internal control over compliance Determine whether auditee complied Follow-up on prior audit findings Report findings Complete and sign specified section of Data Collection Form 8

10 Low Risk Auditee Status Must meet all of the following for each of the two preceding years: Performance of annual single audits Timely filing of data collection form Unmodified opinion of financial statements in accordance with US GAAP or basis of accounting required by state law Unmodified opinion on SEFA and on compliance with major programs No going concern matter was reported by the auditor No material weakness in internal control Known or likely questioned costs must not exceed five (5)% of the total federal awards expended for a Type A program during the audit period 9

11 Major Program Determination Minimum threshold for Type A Program increased to $750,000 (from $300,000) Exclusion of large loan and loan guarantee programs (loans) that exceeds 4 times the largest non-loan program still applies, however, a program is considered to be a program providing loans only if the value of the awards expended for loans within that program is 50% or more of the total awards expended Tweaking of risk assessment criteria for the auditor to determine a lowrisk Type A and high-risk Type B programs Threshold for assessing high-risk Type B program which was previously $100,000, is now based on Type A threshold (>25% of Type A threshold) Minimum % of testing is now 20% (from 25%) for low-risk auditee Minimum % of testing is now 40% (from 50%) for high-risk auditee 10

12 Summary Schedule of Findings and Questioned Costs Following three (3) components: Summary of Auditor s Results Findings Related to Financial Statements under GAGAS Findings and Questioned Costs for Federal Awards Major changes as follows: Format for reference number for an audit finding must meet the requirements of data collection form Specific identification of a repeat audit finding with prior audit finding number In providing contact or perspective of an audit finding, specific identification of whether the sampling was a statistically valid sample Threshold for known and likely questioned costs was increased from $10,000 to $25,000 11

13 UG Finding Elements Views of Responsible Officials Program information Criteria Recommendation Cause & Effect Repeat Finding From Prior Year Finding Elements Whether Sampling was Statistically Valid Questioned Costs Condition Found Context 12

14 Submission of a Single Audit Reporting package consists of the following: Financial statements Schedule of Expenditure of Federal Awards Auditor s reports Summary Schedule of Findings and Questioned Costs (including corrective action plan) Summary Schedule of Prior Audit Findings NOTE: Management letter is not part of the reporting package NOTE: Do not include protected personally identifiable information 13

15 Submission of a Single Audit (cont d) Reporting package must be submitted to the Federal Audit Clearinghouse within 9 months of the auditee s fiscal year or 30 days after receipt of auditor s report, whichever is earlier If the due date falls on a Saturday, Sunday, or a federal holiday, the reporting package is due the next business day 14

16 Overview of Auditee Responsibilities Arrange for Single Audit in Accordance with Prepare Financial Statements Prepare Schedule of Expenditures of Federal Awards (SEFA) Provide the Auditor with Access Prepare Corrective Action Plan Prepare Summary Schedule of Prior Audit Findings Follow-Up and Take Corrective Action on Findings 15

17 What do I need to consider when selecting an auditor? 16

18 Auditor Selection Adherence to procurement standards Make positive efforts to utilize small business, minorityowned firms, and women s business enterprises, whenever possible Evaluate the audit organization s competency Review results of the audit organization s peer review report Evaluate qualifications and skills of the assigned personnel 17

19 How can I strengthen my financial and federal program management? 18

20 Subpart D Standards for Financial and Program Management Maintaining records in such a way that you could easily: Segregate federal and nonfederal awards activity Safeguard authorized use of assets acquired from federal funds Comply with reporting disclosure requirements Prepare budget to actual comparison for each federal award Develop polices to determine allowability of costs Implement cash management requirements NOTE: Non-federal entity is responsible for complying with ALL requirements of the federal award 19

21 How can I improve my procurement practices? 20

22 Subpart D Procurement Standards Must use one of the following methods: Micro-purchases Small purchase procedures Sealed bids Competitive proposals Non-competitive proposals Maintain records sufficient to detail history of procurement Maintain written standards of conduct covering conflicts of interest Provision of full and open competition Take all necessary affirmative steps to assure that small business, minority businesses, and women s business enterprises are used, when possible Key Deferral: Adoption of Procurement Standards for two (2) fiscal years including the year when audit requirements for UG was first implemented 21

23 What are some of the changes related to subrecipient management? 22

24 Subpart D Subrecipient Monitoring and Management Determine if subrecipient or contractor Clearly identify subawards to subrecipients Provide certain subaward information at time of subaward Evaluate each subrecipient s risk of noncompliance Consider imposing specific subaward conditions Monitor activities of subrecipients Verify subrecipient audited Consider results of subrecipient audits Consider taking enforcement action for noncompliant subrecipients 23

25 What should I report on SEFA? 24

26 Basis for Determining Federal Awards Expended ( ) Determination based on when the activity related to federal award has occurred: Incurrence of expenditures Disbursement of funds to subrecipients Use of loan proceeds under loan and loan guarantee programs Receipt of property or surplus property Receipt or use of program income Cumulative balance of federal awards for endowment funds that are federally restricted Distribution or use of food commodities Disbursement of amounts entitling NFE to an interest subsidy Period when insurance is in force 25

27 Basis for Determining Federal Awards Expended ( ) (cont d) How to calculate the value of federal awards expended under loan programs (with few exceptions): Value of new loans made or received during the audit period PLUS Interest subsidy, cash, or administrative cost allowance received PLUS Outstanding loan balance at the beginning of the audit period for which federal government imposes continuing compliance requirements Free rent received as part of a federal award to carry out a federal program (at fair market value) Value of federal non-cash assistance at fair market value at the time of receipt or assessed value provided by federal agency (such as free rent) Program Income (Be cautious and know when to include) 26

28 What are the minimum disclosure requirements related to SEFA? 27

29 Minimum Disclosures on the Face of SEFA List individual federal programs by federal agency. Name of pass-through entity and identifying number assigned by such entity Provide name of cluster, list individual federal program within that cluster, and provide applicable federal agency name. For R&D, total federal awards expended must be shown either by individual federal award or by Federal agency and major subdivision within that agency Total federal awards expended for each individual federal program and the CFDA number or other identifying number Total amount provided to subrecipients from each federal program 28

30 New Disclosures in the Notes to SEFA Must have significant accounting policies used in preparing SEFA Note whether or not the auditee selected to use 10% de minimis cost rate For loan or loan guarantee programs, identify the balances outstanding at the end of the audit period 29

31 What should I include in a Corrective Action Plan? 30

32 Corrective Action Plan Document separate from the auditor s findings Prepared for each audit finding Disagreement with audit findings should be included here and must include an explanation Provide: Name of the contact person responsible for corrective action Planned corrective action Anticipated completion date 31

33 How do I complete a Summary Schedule of Prior Audit Finding? 32

34 Summary Schedule of Prior Audit Findings Include all audit findings (including those reported under GAGAS) Identification of reference number and fiscal year of origination Indicate whether: Fully corrected (only list audit findings and state that corrective action was taken) Not corrected or partially corrected (describe reasons for recurrence and planned corrective action as well as any partial action taken) Valid reason for determining no further action: 2 Years have passed since the audit report in which the finding occurred was submitted to FAC Grantor is not currently following up with the auditee on the reported finding Management decision was not issued by federal agency or pass-through entity 33

35 What are some of the resources available to auditees? 34

36 Make Use of Available Resources! Uniform Guidance codified in Title 2 of CFR, Subtitle A, Chapter II, Part 200 OMB Compliance Supplement Catalog of Federal Domestic Assistance (CFDA) Close interaction with the external auditors Frequent interactions with grantors and/or pass through entities Access designated federal agency's coordinators for audit and programmatic questions (contact information will be provided in an Appendix in the 2016 OMB Compliance Supplement) 35

37 Single Audit Contacts Information # Agency SA Senior Accountable Officials SA Key Management Liaisons National SA Coordinators 1 HHS Ellen Murray Amy Haseltine (Amy.Haseltine@hhs.gov), David Baker (David.Baker@hhs.gov) Tammie Brown (tammie.brown@oig.hhs.gov 2 DoT Brodi Fontenot Patrick Nemons (Patrick.Nemons@dot.gov) John Sysak (john.r.sysak@oig.dot.gov) 3 USAID Steve Tashjian Tashjian, Steve(M/OAA/CAS) <sttashjian@usaid.gov> Steve Shea (Sshea@usaid.gov) 4 NSF Dale Bell Alex Wynnyk (awynnyk@nsf.gov) Laura Rainey (lrainey@nsf.gov) 5 ED Tom Skelly Phillip Juengst (Phillip.Juengst@ed.gov) Bernie Tymes (Bernie.tymes@ed.gov) 6 DHS Chris Cumickey Andrea Brandon (Andrea.Brandon@hq.dhs.gov) Nasr.Fahmy (Nasr.Fahmy@dhs.gov) 7 DoD TBD TBD Carol Vogler (carol.vogler@dodig.mil) 8 EPA David Bloom Howard Corcoran ( corcoran.howard@epa.gov) Leah Nikaidoh (nikaidoh.leah@epamail.epa.gov) 9 USDA Peggy Jannery Peggy Jannery (Peggy.Javery@cfo.usda.gov) Marbie Baugh (marbie.baugh@oig.usda.gov) 10 HUD Joe Hungate Richard Robinson (Richard.Robinson@HUD.gov) Karen Cookson (Kcookson@hudoig.gov 11 USDoJ Mauneen Hennenberg LeToya Johnson (LeToya.Johnson@usdoj.gov) Carol Taraska (carol.s.taraszka@usdoj.gov) 12 DoE Thomas Griffin Robert Myers (Robert.Myers@hq.doe.gov) Darryl Ross (darryl.ross@hq.doe.gov) 13 DoL Laura Watson Steve Daniels (Daniels.Stephen@dol.gov) Melvin Reid (reid.melvin@oig.dol.gov) 14 State Chris Flaggs Carole Clay (Claycl@state.gov) Zoraymas Torres-Alvarez (Torres-alvarezz@state.gov) 15 DoC Barry Borkowitz Gary Johnson (GJohnso3@doc.gov) Patrcia Henry (PHenry@oig.doc.gov) 16 NASA Frank Peterson William Roets (William.Roets-1@nasa.gov) Mark Jenson (mark.jenson@nasa.gov) 17 DoI Douglas Glenn Debra Sonderman (Debra_Sonderman@ios.doi.gov) Morgan Aronson (morgan_aronson@doioig.gov) 18 CNCS Dana Bourne Rhonda Honegger (rhonegger@cns.gov) Stuart Axenfeld (s.axenfeld@cncsoig.gov) 19 VA Tom Harker Tom Harker (Tom.Harker@VA.gov) Sunday Okurume (sunday.okurume@va.gov) 20 Treasury Danielle Thomas Danielle Thomas (Danielle.Thomas@treasury.gov) Elaine Munroe (Elaine.Munroe@treasury.gov) 21 SBA Donna Butler Theodore Holloman (Theodore.Holloman@sba.gov) Karmel Smith (karmel.smith@sba.gov) 22 NEA Winona Varnon Nicki Jacobs (jacobsn@arts.gov) Nicki Jacobs (jacobsn@arts.gov) 23 NEH Jeff Thomas Robert Straughter (rstraughter@neh.gov) Laura Davis (ldavis@neh.gov) 24 IMLS Chris Catignani Mary Estelle Kennelly (MEKennelly@imls.gov) TBD 25 SSA Peter D. Spencer Peter D. Spencer (Pete.Spencer@ssa.gov) Shannon Agee (shannon.agee@ssa.gov) 26 NARA Kathleen Williams Kathleen Williams (kathleen.williams@nara.gov) TBD 27 ONCDCP Lisa Newton Lisa Newton (Lisa_E_Newton@ondcp.eop.gov) Phuong desear (phuong_desear@ondcp.eop.gov) 28 Denali Com. Corrine Eilo Jennifer Price (Jprice@denali.gov) Corrine Eilo (ceilo@denali.gov) 36

38 Questions??

39 Thank you!