Senate Bill 4006

• Requires a “Report”- An engagement, such as AUP’s engagement or other attestation engagement

Purpose

• To test whether state grants were spent as intended

• Must be performed and prepared by a CPA

What It Doesn’t Mean

• Doesn’t require a full scope Audit or review

Exempt Programs

• Most reimbursement programs

• However, Tourism grants are not exempt

Who’s Affected

• Any person who receives one or more state grants of $ 50K or more, in the aggregate, in a state’s FY.

• Report is to be filed with Grantor.

“Audits” In Lieu of “Reports”

Ok if following criteria are met:• Done by independent CPA• Conducted on grant funds• Done using GAGAS or OMB 133A• Available for public inspection

Trigger Date

July 1, 2003

Due Dates

• Reports and sworn statements due to grantor W/I two years of the end of the person’s FY in which the disbursement of state grant funds by the grantor was made.

Due Date Example #1

• Received final funds on November 15, 04.

• FY ends on December 31, 04.

• Report due on December 31, 06.

Due Date Example #2

• Received final funds on April 2, 05.

• FY ends on March 31, 05.

• Report due on March 31, 08.

Who Pays for Report?• Applicant must bear the cost.• Tourism monies to be used for direct

advertising costs only, by statute.• No provision for administrative costs.

“Audits” In Lieu of “Reports”

– OMB Circular A-133 audits may be substituted for the “Report”.

– Will only have to provide sworn statement of expenditures made under the grant.

Less Than $50K Rec’d???

• File with grantor a sworn statement of expenditures made under the grant.

Scope of Report

• Limited to showing that the state grant funds were spent for the purposes intended when the grant was made

What If I Miss the Deadline?

• Will be barred from subsequently receiving state grants until the person has filed the report or sworn statement of expen’s.

Fraudulent Sworn Statements

• Considered a felony• Upon conviction, shall be fined not

less than $ 1K, nor more than $5K, and/or shall be imprisoned for not less than 1 yr., nor more than 5 years

Disclaimer• Information contained herein is my

opinion, is not to be considered legal advice, is subject to change as DOA is still working w/ agencies, and CPA firms to clarify certain issues.

Prepared by Eric J. Ayersman, CPA, MBA 11/4/05