How to Prevent Common Audit or Monitoring Review Findings

How to Prevent Common Audit or Monitoring Review Findings

Michigan State PoliceEmergency Management and Homeland Security Division

Jackie Reese, Audit Unit Manager

Richard Sheaffer, Auditor

http://www.michigan.gov/emhsd 2

• To discuss common findings

• To identify grant requirements

• To provide solutions

Objectives


Suspension and Debarment

The Problem1. The subrecipient has not verified suspension

and debarment and/or has not maintained documentation of the verification for a proposed contractor or vendor for a contract greater than $25,000.

And/or

2. The subrecipient has not verified suspension and debarment for a subaward.



Requirements1. OMB Circular A-133 Compliance Supplement, Part 3, Section INon-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred or whose principals are suspended or debarred.

http://www.whitehouse.gov/sites/default/files/omb/circulars/a133_compliance/2010/pt3.pdf

2. 44 CFR 13.35Grantees and subgrantees must not make any award (subgrant or contract) to any party which is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal assistance programs.

http://www.access.gpo.gov/nara/cfr/waisidx_03/44cfr13_03.html


Suspension and DebarmentSolutions1. Excluded Parties List System (EPLS) https://www.epls.gov/

Maintained by the General Services Administration (GSA) on parties that are excluded from receiving Federal contracts, certain subcontracts, and certain Federal financial and nonfinancial assistance and benefits.a. Go to websiteb. Enter search on proposed vendor or contractorc. Make a screen print of results and maintain in procurement file



Solutions

2. Collecting a certification from the entity that they are not suspended or

debarred.

3. Adding a clause or condition in the contract with that entity regarding suspension and debarment.


Equipment Inventory

The Problem

The subrecipient is not maintaining adequate property records and/or has not conducted and documented a

physical inventory of equipment within the past two years.


Equipment Inventory Requirements

1. OMB Circular A-133 Compliance Supplement, Part 3, Section Fhttp://www.whitehouse.gov/sites/default/files/omb/circulars/a133_compliance/2010/pt3.pdf

2. 44 CFR 13.32http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&rgn=div8&view=text&node=44:1.0.1.1.14.3.13.10&idno=44

3. EMHSDa. Grant Agreement – Send a copy of the

equipment inventory to Audit Unit.

b. Individual Letter – Special request for equipment inventory to Audit

Unit.


Equipment Inventory

The Solution1. Maintain an equipment inventory in compliance with 44 CFR 13.32 d.

a. Use your own inventory documentation as long as it includes all elements of 44

CFR 13.32

b. Use EMHSD equipment tracking sheet http://michigan.gov/documents/msp/Equipment_Tracking_Form_317940_7.xls

2. Perform a physical inventory at least every 2 years and maintain documentation.


Subrecipient Monitoring

The Problem

The Subrecipient has not ensured that subrecipients expending $500,000 or more in Federal awards have met the audit requirements of OMB Circular A-133.


Subrecipient Monitoring

The RequirementOMB Circular A-133 Section 400 (d)

Identifies pass-through entity responsibilities including: Identify Federal awards; advise of rules and regulations; monitor activities;

ensure subrecipients meet audit requirements; issue management decision; consider adjustment of records; and ensure access to records.

http://www.whitehouse.gov/sites/default/files/omb/assets/a133/a133_revised_2007.pdf


Subrecipient Monitoring The Solution

1. Determine if pass-through entity is required to have a single audit.

2. Collect and review single audit report according to OMB Circular A-133.

a. May use EMHSD Job Aid- Sample Subrecipient Single Audit Review Form.

b. May use own review method in compliance with OMB Circular A-133.

3. Issue management decision and request corrective action for findings related to award.

4. Document review.


Training and Exercise Attendance Records

The Problem

The subrecipient does not maintain sufficient attendance records to support training and exercise activity.


Training and ExerciseAttendance Records

The Requirement44 CFR 13.20 (a) (6)Source documentation. Accounting records must be supported by such source documentation as cancelled checks, paid bills, payrolls, time and attendance records, contract and subgrant award documents, etc.

http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=1c5af50a8ac9e8c026b91e0a17e21b16&rgn=div8&view=text&node=44:1.0.1.1.14.3.12.1&idno=44


Training and ExerciseAttendance Records

The Solution

Maintain an attendance record of training and exercise activity. Documentation should include:

1. Course Name

2. Date

3. Participant’s name

4. Sign-in sheet


Support for Salaries and Wages

The Problem

The subrecipient does not maintain sufficient supporting documentation for salaries and wages charged to the grant.


Support for Salaries and WagesThe Requirements

1. 2 CFR 225, Attachment B (8) (h) (3) Time Certification - Employees working

on a single Federal award will be supported by a certification (at least semi-annually).

2. 2 CFR 225, Attachment B (8) (h) (4) Activity Report – Employees working on multiple activities will be supported by

an activity report.

(2 CFR 225 formerly OMB Circular A-87)http://www.whitehouse.gov/sites/default/files/omb/fedreg/2005/083105_a87.pdf


Support for Salaries and Wages

The Solution

1. For employees working on a single Federal award, sign time

certifications at least semi-annually.

2. For employees working on multiple activities, prepare personnel

activity reports.


Questions


Contact Information

Richard Sheaffer, Auditor Jackie Reese, Audit Unit Manager

Phone: (517) 333-4624 Phone: (517) 324-2330

Email: [email protected] Email: [email protected]

Documents

How to Prevent Common Audit or Monitoring Review Findings