Commonly Missed Requirements to Improve State Compliance

Looks Like We Need a Single Audit this Year – What Do We Need to Do?

CPAs & Advisors

Alan D. Panter
Alan D. Panter CPA, CGFM Principal CPAs & Advisors

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In the current COVID-19 environment, some governmental entities that have not historically been required to have a Single Audit are finding themselves in the situation where one is needed this year due to the many federal assistance programs that have been put in place to deal with the pandemic. Some of these governments may not have fully addressed the grant management changes required when the Uniform Guidance became effective for periods beginning after December 26, 2014. As a refresher, in 2013, the U.S. Office of Management and Budget (OMB) issued “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards,” also known as the Uniform Guidance (UG), published in the Federal Register as 2 CFR 200. UG is essentially a government-wide framework for grants management that superseded and synthesized the guidance from earlier OMB Circulars such as A-87 and A-133.

Uniform Guidance requires (generally, there are exceptions) non-federal entities with over $750,000 in federal award expenditures in a fiscal year to have a Single Audit done for the period in which those awards were expended. The term “Single Audit” refers to the federal program compliance audit, which is performed concurrently with the financial statement audit.

Most of the changes that UG required were centered around documentation, in the form of formally adopted policies and written procedures, for various areas of grant management. This article is intended to give an overview of what those policy and procedure requirements are so they can be addressed before audit time.

The list of policies and procedures that follows below is not a comprehensive checklist of what UG requires but is intended to highlight those most important. Citations to the specific UG sections are provided, but please reach out to your Yeo & Yeo Government Services Group member for more detailed information or examples.

Formally Adopted Policy Requirements:

  • Conflict of Interest (§200.138(c)) – maintaining written standards of conduct governing the actions of employees engaged in the selection, award, and administration of contracts.
  • Procurement (§200.318(c)) – defines five types of procurement: micro-purchases, small purchases, sealed bids, competitive proposals, and sole source.
  • Travel Reimbursement (§200.474(b)) – addresses reimbursement for costs incurred by employees or officials related to travel, lodging, subsistence while traveling, and incidental expenses.
  • Fringe Benefits and Leave (§200.431(a) and (b)) – determining the allowability of costs charged to a federal award in the form of fringe benefits and leave time.

Written Procedure Requirements:

  • Allowability of costs (§200.302(b)(7)) – determining the allowability of costs charged to a federal award. The procedures should be used to determine whether a cost is allowable under Subpart E (Cost Principles) of the Uniform Guidance.
  • Allocation of compensation (§200.430) – includes the documentation of time charged to federal awards.
  • Cash Management (§200.305) – minimizing the amount of time between the transfer of funds to the non-federal entity and the disbursement of funds. The procedure should also address how program income, if any, is handled before requesting federal funds.
  • Equipment (§200.313(d)) – defines how equipment is titled, used, managed, and disposed of.
  • Budget to Actual (§200.302(b)(5)) – documents the process for comparing actual expenditures to grant budget amounts.
  • Safeguarding of Personally Identifiable Information (§200.303(3))
  • Subrecipient Monitoring (§200.331) – pass-through entities should document their procedures for monitoring whether subrecipients performed in accordance with an award of federal funds.

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