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4/23/2019
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Texas Department of Public Safety
How Does Financial Reporting and Single Audit Affect Your Grant Funding?
Texas Department of Public Safety
PresenterHarriet FortsonStandards Section AdministratorDisaster Finance, Recovery, Mitigation and StandardsTexas Division of Emergency ManagementTexas Department of Public Safety
14+ years in State Government. Has worked with 9 Federal Programs in compliance oversight areas.
Professional Certifications:Master of Accountancy, Certified Internal Auditor Certified Construction Auditor Certified Government Auditing ProfessionalGrant Management Certificate - Pass-through Track
Texas Department of Public Safety
Grants and AgreementsOn December 26, 2014 the Code of FederalRegulations (CFR), Title 2, Subtitle A, Chapter IIPart 200 (2 CFR 200) went into effect.
Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
• 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
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Texas Department of Public Safety
Audit Requirements 2 CFR 200.501
(b) Single audit. A non-Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal awards must have a single audit conducted in accordance with §200.514 Scope of audit except when it elects to have a program-specific audit conducted in accordance with paragraph (c) of this section. Paragraph C refers to Program-specific audits
(d) Exemption when Federal awards expended are less than $750,000. A non-Federal entity that expends less than $750,000 during the non-Federal entity's fiscal year in Federal awards is exempt from Federal audit requirements for that year, except as noted in §200.503 Relation to other audit requirements, but records must be available for review or audit by appropriate officials of the Federal agency, pass-through entity, and Government Accountability Office (GAO).
Texas Department of Public Safety
What is the Single Audit?
• Required by Uniform Guidance in 2 CFR 200 Subpart F• The general requirement relates to the amount of federal
funds expended by a non-Federal entity during fiscal year. • Subrecipient must follow procurement standards (2 CFR
200.318-326) to obtain an independent auditor
Texas Department of Public Safety
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Texas Department of Public Safety
Increased Emphasis Placed on Oversight Requirements for Pass-through Entities .
Increased monitoring of subrecipients to ensure that:o The federal program is operating efficientlyo That services and costs are allowableo That there is mitigation of risk, both for
compliance and within the realm of fraud, waste, and abuse.
Reviews of subrecipient performance and financialreports are utilized to ensure that both the subrecipientand the pass-through entity are meeting award terms andconditions.
Texas Department of Public Safety
Single Audit process involves:oProcurementoReport submissionoCorrective actionoManagement Decision
The Pass-through entity is required to timely issuemanagement decisions on findings, weaknesses, andissues that are identified during the Single Audit andhave either a direct effect or the potential to effect thesubrecipients ability to administer a federal program.
Texas Department of Public Safety
The Single Audit Act Compliance Report
• The Standards Sections sends out the Single Audit Act Compliance Report (SAACR) annually.
• The SAACR is utilized by the StandardsSection as a notification tool and as aprompt to subrecipients to submit therequired documentation in order toremain in compliance with federal andstate reporting requirements as a grantrecipient.
• Failure to submit the SAACR does notautomatically trigger noncompliance,however subrecipients that fail tosubmit the SAACR typically fail to meetreporting requirements.
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Texas Department of Public Safety
The SAACR gives the subrecipient the option to selectone of the following:
• Single Audit Reporting Package Attached• Single Audit Reporting Package will be submitted by
a certain date• Subrecipient Not Subject To Single Audit• Subrecipient Elected a Program Specific Audit• Subrecipient is a State Agency or University Audited
by the State Auditor’s Office• All Subrecipient Grants Closed
Texas Department of Public Safety
The Single Audit Submission Process
Once completed the subrecipient is required to submit theSingle Audit Reporting Package.
The Single Audit Reporting Package must be submitted withinthe earlier of 30 days of receipt by the subrecipient of theSingle Audit Report from the independent auditor or 9 monthsfrom the end of the subrecipients fiscal year.
Texas Department of Public Safety
Federal Audit Clearing HouseThe subrecipient and independent auditor are
required to report the results to the Federal Audit Clearinghouse by completing the Data Collection Form (SF-SAC) on the harvester website, within 30 days of the issuance of the report.
https://harvester.census.gov/facides/Account/Login.aspx
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Texas Department of Public Safety
The Single Audit Reporting Package:
• Any relevant financial statements (AFR, CAFR, SAR) and the schedule of expenditures of federal awards (SEFA)
• Summary schedule of prior audit findings (if applicable)
• Independent Auditor’s Report(s)
• Corrective Action Plan (if Applicable)
• Any management letters issued by the independent auditor
Texas Department of Public Safety
The Single Audit Review Process
If a management letter is noted in the Independent Auditor’s report, then the Standards Section will request this letter directly from the subrecipient.
2 CFR 200.512 (b)(3)(e) Report submission.(e) Requests for management letters issued by the auditor. In response to requestsby a Federal agency or pass-through entity, auditees must submit a copy of anymanagement letters issued by the auditor.
Texas Department of Public Safety
Are there findings or deficiencies?
Does the Single Audit Report containdeficiencies with the potential to impact theadministration of the grant?
Is a Corrective Action Plan necessary?
Is there significant non-compliance which mayresult in suspension until the non-complianceis adequately addressed?
What could go wrong?
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Texas Department of Public Safety
The Standards Section will review theCorrective Action Plan to determine if theproposed corrective action is sufficient toadequately address each finding ordeficiency.
The Standards Section will draft aManagement Decision Letter for reviewby management.
Once the management review is completethe Management Decision Letter will beissued to the subrecipient.
Corrective Action and Management Decisions
Texas Department of Public Safety
What is a Management Decision?
Management Decision Letters indicate that TDEM has closed thereview of the subrecipient for the fiscal year.
The following are possible Management Decision outcomes:o Report Accepted, No Further Action Requiredo Finding (s) Sustainedo Corrective Action Acceptedo Further Corrective Action Requiredo Suspension of reimbursement payments
Management decisions have the potential to elevate a subrecipients risk level.
Texas Department of Public Safety
Risk Assessment Process2 CFR § 200.330-332 requires the pass-through entity to verify that the subrecipient:
o Is able to perform subaward-related technical and administrative tasks
o Has an adequate accounting systemo Has the financial capability to administer
the subawardo Has utilized approved indirect cost rateso Has not been debarred or suspended
The Standards Section conducts a Limited Annual Risk Assessment as part of the annual Single Audit review process.
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Texas Department of Public Safety
Additional monitoring, such as technical assistance,training requirements and onsite reviews may occur.
Additional oversight, such as cost reimbursement oradditional reimbursement documentation requirementsmay be imposed.
Texas Department of Public Safety
For questions or to request information related to the Single Audit process please contact:
The Standards [email protected]
Or
Harriet Fortson at [email protected]
