Grants - Uniform Guidance/Tracking & Reporting Presented by: Marc Grace, CPA, Partner Stephen Emery, CPA, Manager
Schedule of Expenditures of Federal Awards Major program determination Internal control over compliance requirements for federal awards Compliance with federal awards 2
The Single Audit Act Uniform Guidance establishes the audit requirements Components of a Single Audit Audit of financial statements Compliance audit of federal awards 3
What is a SEFA? What period does the SEFA cover? Who prepares the SEFA? 5
Loans and loan guarantees Loans at institutions of higher education (IHE) Clusters Subawards Valuing other noncash awards 6
Required on the face of the SEFA Required in the notes to the SEFA 7
Completeness Reconciliation discrepancies between SEFA and general ledger No indication if awards are direct or passthrough Incorrect CFDA number Incorrect program name Incomplete note disclosures 8
This is an auditor consideration The four-step process: 1. Determination of type A and B programs 2. Identification of low-risk type A programs 3. Identification of high-risk type B programs 4. Determine programs to be audited as major 10
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Auditor risk assessment Minimal conditions for low-risk determination. 12
Based on auditor judgment Auditor experience Grantor oversight Inherent risk of noncompliance 13
1. Type A programs that are not low risk 2. Type B programs that are high risk 3. Programs to be audited as major per federal agency request 4. Additional programs as necessary to meet the percentage of coverage rule 14
Internal control over compliance requirements for federal awards General objectives Recording of transactions Execution of transactions Asset safeguarding 16
Components of Internal Control Control Environment Risk Assessment Control Activities Information and Communication Monitoring The Green Book 17
Formal equipment tracking Generally applies to all capital grants Enhanced documentation requirements to ensure greater accountability 18
Payroll related costs Charging budgeted payroll costs Overarching principles regarding allowable employee compensation 19
Some considerations for Time and Effort reporting and controls: Benefits of separate processes Shift to internal control framework from specific criteria Grant agreement peculiarities 20
There are 5 general standards 1. Required written policies 2. Necessary and cost effective 3. Full and open competition 4. Written policy covering conflicts of interest 5. Price and vendor analysis 21
Micro purchases - Less than $3,500 Small purchases - Between $3,500 and $150,000 Sealed bids: >$150,000 Competitive proposals: >$150,000 Sole source allowed under several circumstances These are the federal thresholds State and local may be more conservative 22
Evaluation of subrecipient risk Must be documented Minimum contract components Subrecipient name and DUNS number Federal award identification number Federal award date Budget period and amount Project description Name of the federal awarding agency, name of the pass-through entity, and contact information CFDA number and name Identification if the grant is related to research and development Indirect cost provision 23
24 The Uniform Guidance requires certain written policies. Compliance areas for which each entity must maintain written policies include cash management, procurement, subrecipient monitoring, conflicts of interest, and time and effort reporting.
Activities Allowed or Unallowed Allowable Costs / Cost Principles Cash Management Eligibility Equipment and Real Property Management Matching, Level of Effort, Earmarking 26
Period of Performance Procurement and Suspension and Debarment Program Income Reporting Subrecipient Monitoring Special Tests and Provisions 27
Opinions for each major program Direct and material compliance requirements Compliance Supplement located at whitehouse.gov Part 3 of the Compliance Supplement Part 4 of the Compliance Supplement (part 5 for clusters) Unique terms and conditions 29
Quantitative findings Auditor extrapolation of errors is required The Uniform Guidance increased the reporting threshold from $10,000 to $25,000 30
Qualitative findings Professional judgment Schedule of Findings and Questioned Costs 32
What is the Data Collection Form? What is included? When does it need to be filed? 33
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Marc Grace, CPA, Partner marc.grace@kmccpa.com Stephen Emery, CPA, Manager stephen.emery@kmccpa.com 35