Resolution 090-1986
I
I
-'
William A. Wagner, Jr., Director
Civil Defense Department
RESOLUTION NO. 090 -1986
A RESOLUTION OF THE BOARD OF COUNTY COMMIS-
SIONERS OF MONROE COUNTY, FLORIDA, APPROVING
AND AUTHORIZING EXECUTION OF AGREEMENT
#86EM-40-11-54-10-036 BY AND BETWEEN THE
STATE OF FLORIDA DEPARTMENT OF COMMUNITY
AFFAIRS AND MONROE COUNTY, PERTAINING TO
EMERGENCY MANAGEMENT ASSISTANCE.
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
MONROE COUNTY, FLORIDA, that said Board hereby approves and
authorizes the Mayor and Chairman of the Board to execute
Agreement #86EM-40-11-54-10-036 by and between the State of
Florida Department of Community Affairs and Monroe County, a copy
of the same being attached hereto, pertaining to emergency
management assistance.
PASSED AND ADOPTED by the Board of County Commissioners of
Monroe County, Florida, at a regular meeting of said Board held
on the 21st day of March, 1986.
BOARD OF COUNTY COMMISSIONERS
OF MONROE COUNTY, FLORIDA
By:
~~w
Mayor Pro Tern/Vice Chairman
(SEAL)
Attest DANNY L. KOLHAGE, Clerk
"), 1 I ,
~~L~, JD.L
APPRO~ED AS TO FORM
Afl{Q GAL SUFF!CI;~~~ ;J
BY ~_~~
Attorner"_ Offke l\
•
• • AGREEMENT # 86EM-40-11-54-10036
•
AGREEMENT •
BETWEEN THE STATE OF FLORIDA •
DEPARTMENT OF COMMUNITY AFFAIRS...
AND
•
•
MONROE COUNTY
• (NAME OF- SUBGRANTEE) `
•
This Agreement, :entered into between the Department of
• Community Affairs (Grantee ) and . Monroe County
•
- (Subgrantee) , shall govern certain emergency management related
activities to be, financed by the Grantee.. •
THEREFORE,: the parties agree as •follows:
• 1 . TERMS OF AGREEMENT
a. This Agreement shall commence on October 1 , .
1985 and shall continue in full force and effect to andAncluding
. September 30 ,. 1986 . •
•
b. The Grantee agrees. to allocate the Subgrantee. the
•
maximum sum of $ 19,255 /50% which the Subgrantee will match with
$ 19,255 /50% for a total subgrant of $ 38,510 . /100% for -
• the successful completion of the items .of performance agreed to .
herein.
c. It is ' agreed that liability of the_ Grantee under
this Agreement shall not exceed the total funds .received by the
Grantee for this purpose. . .
• d. The Grantee or Subgrantee .may terminate this
Agreement for breach of contract or in the event of non-availability
of funds with such notice as is reasonable under the circumstances .
The State of Florida' s performance and obligation to pay under this
Agreement is contingent upon an annual appropriation by the
Legislature. Either party may terminate this Agreement without
cause by giving 30 days notice to the other party.
•
e. The Grantee .Or Subgrantee may, from time to
.time; request changes in the- services to be provided under this
Agreement or in the operating budget. Such requested changes ,
except as. provided for in Paragraph II b, must be submitted in
writing, agreed to and signed by both parties in order to amend
• this Agreement.
• f . The Subgrantee, in performing the. requirements
. • of this Agreement, shall comply with applicable laws , rules , .
regulations, ordinances and: c.odes of the federal , state and local
governments . . • .
II . REQUIREMENTS AND ASSURANCES
a . General Provisions . The Subgrantee hereby
assures and certifies that it will comply with regulations , poli-
cies, guidelines , and requirements including 44 CFR Part 302,
CPG .l-3 and 1-5 , . 0MB Circular No. A-87 and A-128 as they relate
to application, acceptance and use of federal funds . '
• b. Budget Summary. The Subgrantee will complete
the attached "Budget Summary" which is. incorporated herein by
reference as Exhibit Aand which must be approved by the Grantee
prior to expenditure of funds by the Subgrantee. . Changes within
individual budget line items may be made at the discretion of the
Subgrantee, without Grantee approval, if the effect of such
changes does not exceed ten percent (.100 ) of the line item total.
Under no circumstances .can the changes increase the total budget
allocation
c. Scope of Work. The Subgrantee will complete a ,
"Scope of Work" describing the activities/projects to be
accomplished under this. Emergency Management Assistance (EMA)
agreement. Such scope of work is attached to and incorporated
herein as Exhibit B.
d. Reports.. Financial and progress reports must be
submitted on a quarterly' basis . Progress reports are due within
15 days after the end of each quarter. Financial reports are
due, within 45 days after the end of each quarter. A final financial
report, serving as the close-out report, is due within 45 days after.
the termination of this Agreement. The Subgrantee shall not
receive reimbursement for quarterly expenditures until the quarterly
progress report is received by the. Grantee.
e. Fiscal and Program Accountability. The
Subgrantee must establish fiscal control and accounting proce-
dures which. assure proper disbursement of subgrant funds and.
required matching expenditures . All monies spent on this project
will be disbursed in accordance with provisions of the budget
summary as approved' by the Grantee. The Subgrantee acknowledges
that it has full responsibility for fiscal and programmatic
accountability for this subgrant. In the event the Subgrantee is
unable to produce records capable of being audited without
reconstruction by. Auditors , all funds paid under this . Agreement
by the Grantee to the Subgrantee shall be disallowed and subject
to repayment. The accounting system established and maintained.
by the Subgrantee must have internal controls adequate to safe-
guard the assets of the Subgrantee, check the accuracy and
reliability of accounting data, promote operating efficiency and
encourage compliance with prescribed management policies of this
Agreement.
-2-
. f . Recording and Documentation of Receipts and . •
• Expenditures . Accounting . procedures must
' provide for an accurate and. timely recording of receipt of funds
' - by type •of expenditures made from such funds and of unexpended
balances . Accounting procedures must be adequate to ensure that ,
' expenditures charged to this subgrant. are- for allowable purposes
and that documentation is readily available to verify that such
charges are accurate.. .
g . Unexpended Funds. . Unexpended funds which are
reflected on .the final' financial report referred' to in Paragraph
. II d :above will automatically revert to the Grantee and the Grantee
reserves the. right to unilaterally re-obligate such -funds .
h . Utilization and Payment of Funds. Funds
awarded' are to. be• expended in accordance with the 'Subgrantee'.s
approved budget summary and scope of work. 'Payments to the •
Subgrantee will - be made on a quarterly basis in accordance with
approved expenditure reports submitted by the Subgrantee.
i .. Obligation of Grant Funds . Subgrant funds shall
not, without advance written approval by the' Grantee, be-obligated
prior to the effective .date. or subsequent to the termina€ion date
-• ' of' of ,the ' subgrant period. Obligations outstanding as of the ter-
mination date shall • be liquidated within 45 days . Such obliga-
tions must be related to goods or services provided and Utilized - ' .
within the subgrant period. ' -
. j . Audit.. The audit requirements as set forth - in •
0MB A-1.28 , Audits of. State and Local Governments. (attached '
hereto and incorporated herein as Exhibit C) are to be adhered to
by the Subgrantee. These requirements should be. utilized in
- negotiating contracts with independent auditors .
k.' Retention of Records . The Subgrantee shall '
maintain all records , documents and files pertaining to this
Agreement for a period of three years from the date' of conclusion .
of the Agreement unless' .informed by the Grantee that said :records
• may be disposed of -earlier. Access to those records must be pro-
vided at- reasonable times to the Grantee and its employees and
agents and .to the federal grant agency, its employees and agents .
1'.' Legal Authorization. The Subgrantee certifies
with xespect to this Subgrant that it possesses legal authority
to apply for the grant and that the applicant' s governing body
• - :has adopted a resolution which authorizes the 'execution and -
. ' acceptance of the Agreement 'with all understandings and' assurances •
contained herein; and names and authorizes the person to -act in
connection with this Agreement. -
. -3- ,
The Subgrantee acknowledges that the responsibility for
complying with the approved subgrant award rests with the
recipient Subgrantee and acknowledges that failure to do so may
constitute grounds for the recession or suspension of this
subgrant and may influence future :subgrant awards .
IN WITNESS HEREOF, the Grantee and the Subgrantee have
executed this Agreement as of the date first written above.
•
FOR THE SUBGRANTEE: FOR THE GRANTEE: '
• STATE OF FLORIDA
DEPARTMENT OF COMMUNITY AFFAIRS
BY: BY:
Authorized County Official Authorized Department Official
Wilhelmina G. Harvey, Mayor Gordon L. • Guthrie
of Monroe County, Florida . Division Director
Name/Title Name/Title
59-6000749
Fed. Employer Identification # • •;F'
(SEAL)
Attest : •
•
Clerk
•
•
•
APPI N.O AS TO F OI:11,
• A s' . L-6AL stirr'., :.
t61f ..
Attorney's Office
-4-
•
Exhibit A Budget Surrmaxy
•
MONROE. County
•
•
Cost Category - Budget Requested Budget Approved Amended Budget
1. Salary & Fringe Benefits` $55,250 $38,510
2. Travel 5,000 -0-
3. AdministrativeExpenses 5,000 -0-
4. TOTAL $65,250 . $38,510
5. Federal Share . $32,625 $19,255
6. Local Share $32,625 $19,255
*Any item .purchased in excess of $500 must have .prior written 'approval from the
Division of Emergency Management.
. , , EXHIBIT B - SCOPE OF WORK •
. • . MONROE • .
County .
•
- - Quarter.to be :
• Cateaorv/Item •
Completed (Leave Blank),
A. Plans Development • - ' .
1. Complete and 'submit ' updated • 1 ,_
HICA/MYDP -
2 . Complete and submit updated .2 •
DO NOT WRITE IN
•
Peacetime Emergency Plan to'be. in . .
• compliance with Rule. •• ' . . THIS SPACE
- 3. Complete and- submit updated . • 1
hazardous materials• response
Plan .
B. Training
1. Perform inspection and operation 1
al tests of radiological kits , .•
and coordinate the exchange of
defective kits with the state . •
RSM facility .
- 2 . Provide recurrent radiological • 1 , 2 , 3
training to approximately 100
county personnel
•
3. Perform ' an exercise to demonstrate 1 . .
the effectiveness . of the County
Emergency Operations Plan .
•
4 . Provide a.. continuing. public • All
education ,program on disaster.
- preparedness __ .
C. Warning
•
1 . Maintain24-hour warning point . All
2 . Maintain registration for • • All
people with special needs - S
Ac041741Ti 11:
, .
- - EXECUTIVE OFFICE OF THE PRESIDENT PR 2:1985
• I IN., • OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503 ca4
0-si‘ Sawlas
SEC
EXHIBIT C
• •
April 12, 1985 CIRCULAR No. A-128
TO THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS
SUBJECT : Audits of State and Local Governments.
•
1 . Purpose. This Circular is issued pursuant to the Single
Audit Act of 1984, P.L. 98-502. It establishes audit requirements
for. State and local 'governments that receive Federal aid, and
defines Federal responsibilities for implementing and monitoring
those requirements.
2. Supersession. The Circular supersedes Attachment P, "Audit
Requirements, " of Circular A-102, "Uniform requirements for grants
. to State and local governments. " •
•
3 . Background. The Single Audit Act builds upon earlir efforts
to improve audits of Federal aid programs. The Act requires State
or local governments that receive $100, 000 or more a year in
Federal funds to have an audit made for that year. Section 7505
of the Act requires the Director of the Office of Management and
Budget to prescribe policies, procedures and guidelines to
implement the Act. It specifies that the Director shall designate ,
"cognizant" Federal agencies, determine criteria for making
appropriate charges to Federal programs for the cost of audits,
and provide prpcedures to assure that small firms or firms owned
' • and controlled by disadvantaged individuals have the opportunity
•
to participate in contracts for single audits.
. • •
4. Policy. The Single Audit Act requires the following:
a.. . State or local governments that' receive $100, 000 or more
a year in Federal financial assistance shall have an audit made in
accordance with this Circular.
•
b. State or local governments that receive between $25, 000. .
and $100 ;000 a .year ' shall have an audit made in accordance with
this Circular, ,or in accordance •with Federal laws and regulations
• governing the programs they participate in..
. •
c. State or local governments that receive less than.
$25, 000 a year shall be exempt from compliance, with the Act and
other Federal audit requirements. "These State and local
governments shall be governed by audit requirements prescribed by
State or local law or regulation.
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. 2
d. Nothing in this paragraph exempts State or . local' •
governments from maintaining records of Federal financial
assistance or from providing access to: such records to. Federal
agencies, as provided for in Federal law or in Circular A-102,
"Uniform requirements • for. grants to State or local. governments." .
5. Definitions. For the purposes of this Circular the following
definitions from the Single Audit Act apply:
a . "Cognizant agency" means the Federal agency assigned by
the Office of Management. and Budget to carry out the responsibil-
ities described in paragraph 11 of this Circular.
b. . "Federal financial assistance" means assistance provided
by a Federal agency in the form of grants, contracts, cooperative
• agreements, loans, loan guarantees, property, interest subsidies,
insurance, or direct appropriations, but does not include direct
• Federal cash assistance to individuals:. It includes awards
received directly. from. Federal agencies, or indirectly through
other units of State and local governments.
c. "Federal agency" has :the same meaning as the term
'agency''_ in section 551 ( 1) of Title 5, United States Code At •
• d. "Generally accepted .accounting principles" has.'the
meaning specified' in the generally accepted government auditing
standards.
e . "Generally accepted government auditing standards" means
•the Standards 'For Audit 'of Government Organizations,' Programs,
• Activi'ties, : and' Functions, 'developed by the Comptroller General,
dated Fehcuary 27, 1981.. •
f. "Independent auditor" .means: •
( 1 ) . a State or local ..government auditor who meets the
• independence standards specified in generally accepted government
auditing standards; or •
. . ;
(2 ) a . public accountant who meets such independence
standards. •
g. "Internal controls" means the plan of organization and
methods .and procedures adopted by management to ensure that:
( 1 ) resource use is consistent with laws, regulations,
and .policies;' •
(2) resources are safeguarded against waste, loss, and
misuse; and
(3). reliable data are obtained, maintained, and fairly
disclosed in reports. . •
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. . • h. . "Indian tribe" means any Indian tribe , band, nations, or
:other organized group or community, including any Alaskan Native .
• village or regional or village cotPoratiOns (as defined in, ot • - _. , .
established under, the Alaskan Native Claims Settlement Act ) that
. . is recognized by the United States . as: eligible for the- special
programs and-.servicesproVided by the United States to Indians -. _ • -
because of their status as Indians . .•. .
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'..:. - . . A.. ' "Local government" means any unit of local government
.,.. .
-, . within a. State, -inclUding a county, a borough, municipality, city,'
town, township, parish, lOcal , public authority, special district,
, school district , intrastate district, council of governments, and• . any other instrumentality of. 1OCal government.
. . .
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. • . 3 "Major Federal Assistance Program," as defined by . .
. .
- • P.L. 98-502, is described in the Attachment to this Circular .
,. .
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. . . . k. "Public accountants" Means the indiYiduals who meet
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the qualification standards included An generally accepted .government auditing. standards for personnel performing government . .: '• , .. audits. . • • .
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. • 1. • "State" means. any State of the United States,,,,tthe ..
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• ,-, District of Columbia, the Commonwealth' of .Puerto Rico, p,he Virgin ..
• Islands, Guam, American Samoa , the Commonwealth of the Northern
.
Mariana Islands, and the Trust Territory of the Pacific Islands, —
.- . any instrumentality thereof, and any .multi-State, regional, or
' interstate entity that has governmental • functions and any Indian
tribe. . ,
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• m. "Subrecipient" means any person or government
_
department, agency, or establishment that receives Federal . .
' • '
:-. .i financial assistance to carry out a: program through a State or
local government, bUt . does-not include an individual that is a
beneficiary of such a- program. A subrecipient may also be a
: : ". ,...
. • .. direct recipient of Federal financial assistance. ' . . . . .
' • •
4 . • 6. - Scope of audit.- :The Single Audit Act provides that:, . • . .
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a . The audit - shall be made by an independent auditor in •accordance with generally accepted government auditing standards
covering financial and
compliance audits.
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. .. ' b: The audit shall cover the entioperations of -a State
. , orfloaargovernment• or, .at , theoption 'of that government, it may . -. •
. .
• .
. • cover- departments , agencies or establishments that received,. . expended, or otherwise administered Federal financial assistance.
,.
during the year, ..However , if a State or local government receives
• $25 , 000 or more in -General Revenue Sharing Funds in a fiscal year,
. .
. . • it shall have an audit 'of its entire operations. A series of
.-- audits of individual departments , agencies, and establishments for . .
the same 'fiscal year may be considered a Single' audit. .
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9
c. . Public hospitals' and public colleges and. universities.
may be
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from State and local audits and the requirements
ofthis Circular. . However, if such' entities are excluded, audits
of these entities shall Ibe made' 'in accordance .with,,statutory
requirements and the -provisions'`of rulhr A-110 , Un i o
ther
! requirements for. grants. to universities,
nonprofit organizations."
d. The auditor shall determine whether . .
( 1) : the financial statements of
the
fairlye ge its fnrmentnancial
department, agency or . establishment present
position and. the results of its financial operations in .accordance
with generally accepted accounting principles-;
2) the organization 'has internal .accounting and other .
control systems to provide reasonable. assurance in at it is
compliance with
managing Federal financial assistance
p g
applicable laws and regulations; and
3) the organization has complied with' laws
standmrregula-
tions that may have material effect on its financial a
and on, each major Federal. assistance program.
e uenc of. audi:t. ll
' Audits shall be made annuay unless the
State or local government has, by
7. - Fr q Y - January: 1 ,. 1987, a constitu-
tional or statutory requirement for • less frequent . audits. For
those governments , the cognizant agency shall permit biennial
lt
government so requests. , .
audits , covering both years-, if the g requests. It .
shall also honor requests for biennial audits
byts governments that
have an administrative policy. calling beginning before January l .� •
than.. annual, but only for fiscal- years
1987.
ws. The Single Audit
8 Internal control anaecendentnauditorce ed�:termine and report on
Act requires that the..°in p - �
the organization has • internal control systtemsstonprovide
whether Federal ce
_.�-:, � reasonable- assurance, that it islicablenlaws and regulations.
programs in`.compliance with applicable
^- In order to provide this.
a. Internal. control review. .
valuation of internal
assurance •the auditor must make a study and evaluation
assistance programs.,
control systems used in administering Federal
• -he studyand evaluation must be made whether oranott othehluditor
T stems. P..
s
intends to .place reliance .on such sy
review, the auditor shall:
•
( 1 ) . Test whether these internal control systems are
•
functioning in accordance- with prescribed procedures.
Examine the. rec.ipient' s system for. monitoring
' - (2 ) , -- -
subrecipients and obtaining and acting on subrecipient audit
reports.
5
•
•
•
• b. Compliance review. The law also requires the auditor to
determine whether' the organization has complied with laws and •
regulations that may have a material effect on each major Federal
assistance program. •
• (1 ) In order to determine which major programs are to
be tested for compliance, State and local governments shall
identify in. their accounts all. Federal funds received and expended
and the programs under which they were received. This shall
i'nclude. funds .received directly from Federal agencies and through
other State and local governments.
(2) The review must include .the selection and testing
• of a representative "number of charges from each major Federal
assistance program. The selection and testing of transactions
shall be based on the auditor 's professional judgment considering
such factors as the amount of expenditures for the program and the
individual awards; the newness of the program or changes in its
conditions ; prior experience with' the program, particularly as .
revealed •• in audits and other evaluations, (e .g. , inspecti;bns, .
program reviews) ; the extent to which the program is carried out
through subrecipients; the extent to which the program 4-bntracts
for goods or services; the level to which the program is already
subject to program reviews or other forms of independent• '
oversight; the adequacy of the controls for ensuring compliance ;
the expectation of adherence or lack of adherence ' to the
applicable laws and regulations; and the potential impact of •
adverse findings.
. (a ) 'In making the 'test. of transactions , the .
auditor shall .determine whether:
•
•
• the . amounts' reported as expenditures •
were for allowable services, and
•
-- the records show that those who received
- services .or benefits were eligible to receive them. .
• . (b ) ' In addition to transaction testing,, the
auditor shall determine whether:
-- matching requirements, ' levels of effort
and earmarking limitations were met, .
•
•
Federal financial reports and claims for _
advances and reimbursements contain information that is supported
by the books and records from which the basic financial statements
have been prepared, and •
-- amounts claimed or used for matching
_ were determined in accordance with UMB Circular A-87, "Cost
principles for State and local governments, " and Attachment .F of .
Circular A-102 , "Uniform requirements for grants to State and
local governments:"
• (c ) The `principal compliance requirements of the
largest Federal aid programs may be ascertained by referring to' '
•
the Compliance Supplement for Single Audits 'of State and Local .
Governments, issued. by OMB and available from the Government
Printing Office.. •:For those programs not covered in the Compliance
:Supplement, the auditor may ascertain compliance requirements by
researching the, statutes, regulations, an.d agreements governing
individual programs.
(3 ) Transactions related to other Federal assistance
programs that are selected in connection with ' examinatione;c'of
financial statements and evaluations of internal controls:shall be
• tested for compliance with Federal laws and regulations that apply
to such transactions.
9. Subrecipients. State or local governments that receive
Federal financial assistance and provide $25,000 or more of it in
a fiscal year to 'a'. subrecipient shall:
a .• ., determine 'whether State or local subrecipients have met
the audit requirements of this Circular and whether subrecipients
covered by Cirpular A-110, "Uniform •requirements for grants to.
universities , hospitals, and other nonprofit • organizations," have
met that requirement;
b, determine whether the subrecipient spent Federal
assistance funds provided in accordance with applicable laws and
• regulations., ' This may be accomplished by reviewing an audit of '
the subrecipient made in accordance with this Circular, Circular
A-110, or through other means (e.g. , program reviews) if the.
subrecipient has not yet had such an audit;. .
• G. . ensure that appropriate corrective action is taken
within six months after receipt of the audit report in instances
of noncompliance with Federal laws and regulations;
d. consider whether• subrecipient audits necessitate
adjustment of the 'recipient 's own records ; and
•
e. require each subrecipient- to permit independent , auditors
to have access to `the records and financial statements as
necessary to comply with this Circular.
10 . Relation to other audit requirements.. The Single Audit Act
:provides that an audit made in accordance with this Circular shall
be in lieu of any financial or financial compl•iance . audit required
under individual Federal assistance programs. To the extent that
a single audit provides Federal agencies with information and
assurances they need . to. .carry out their overall responsibilities,
. they shall , rely upon and _.use such information. -However, a Federal
.agency .shall make any additional audits which are • neces-sary to
- . . •
carry out its responsibilities under Federal law and regulation.',
• Any additional Federal audit effort shall be planned and carried
out . in such a way •as to. avoid duplication.
• a , The provisions of this Circular .do not limit the -
. authority of .Federal •agen-cies to make, or contract - for audits and
evaluations. of Federal financial assistance programs, nor do they -
•
limit the authority of any Federal agency . Inspector General or
•
•
. other Federal audit Official . .
' b. - The provisions of this Circular do not 'au-thorize any_ - -
State or local government or -subrecipient thereof to constrain
Federal agencies , in any manner, from carrying out• additional:
• audits. •
•
• - c'. A Federal agency that' makes or contracts for Udi is . .in
addition. to the audits made- by - recipients pursuant to this
• •Circular, shall, consistent with other - applicable laws. -and
regulations, arrange. for funding the cost- of such additional •
audits. Such additional audits include economy and efficiency
• audits , program results . audits, and program evaluations. .. •
• 11 . Cognizant agency responsibilities . ' The Single- Audit Act. `
. provides for cognizant Federal agencies to oversee the
implementation of this Circular', . .
..a . The ,Office of Management and Budget will assign
cognizant agencies for States and their subdivisions and' larger • •
. local governments and' their subdivisions. ' Other Federal agencies
may participate with an assigned cognizant agency, in order to
- fulfill the cognizance responsibilities.' Smaller, governments not
assigned a cognizant- agency- will be• Under the general oversight of .
the • Fe.deral agency . that- provides them the. ,most funds whether
directly or indirectly.
• • b. - A c.ognizant •agency shall have the following
responsibilities:
• • ( 1 ) Ensure that audits are made and reports are
received in .a timely. .manner and- in accordance with the -
requirements of this Circular.
• ( 2 ) Provide, technical advice and liaison to State and
local governments and independent auditors. • •
9.
• (3) Obtain or make quality control reviews of selected
audits made by :non-Federal. audit organizations, and provide the.
results, when appropriate, "go .other interested organizations.
•
(4) Promptly inform other offected Federal agencies and
appropriate Federal law enforcement officials 'of: any reported
illegal acts or irregularities. They should also inform State or
•
local law enforcement- and prosecuting authorities, if not advised
by the recipient, of any violation of law within their
• Jurisdiction.
(5) Advise the recipient of audi is that have been found
not to have met the requirements. set, ,forth in this Circular. In.
such instances , the recipient will be expected to work with the
auditor to take corrective action. If corrective action is not
taken, the cognizant agency shall notify the recipient and Federal
awarding agencies of the : facts - and make: recommenda tions -for .
" followup action. Major inadequacies or repetitive substandard
performance of independent auditors shall be referred. to
appropriate professional bodies for disciplinary action.
(6) Coordinate, to the extent' practicable, audits made
by or for Federal agencies that are in addition to the au-flits made •
pursuant . to this Circular ; so that the additional audits build upon
such audits. .:4
(7) Oversee the resolution of audit findings that affect
• the programs of more than one agency. •
12. Illegal acts or irregularities . If the auditor becomes aware -
of illegal acts or other irregularities, prompt notice shall be
given to recipient management officials above the level of involve-
ment. (See also paragraph 13(a ) ( 3). below for the auditor's. report-
.i-ng responsibilities. ) The. recipient, in turn, shall- promptly
notify the cognizant agency of.. the 'illegal acts or irregularities
and of proposed and actual actions, if any. Illegal acts and
. irregularities include such matters as. conflicts of interest, •
falsification of records or reports`, and misappropriations of funds
or other assets.
13-. Audit Reports. Audit. reports must be prepared at the
completion of the audit. Reports serve many needs of State and
local governments as well as meeting the requirements of the Single
Audit Act.
a . = The "audit report shall state that 'the audit was made in
accordance with the provisions of this Circular.. ` The report .shall
be made up of at least
( 1 ). The auditor ' s report on .financial 'statements and on .
a schedule of Federal assistance ; the financial statements;' and a
schedule. of Federal assistance, showing the total ..expenditures• for
. • • 9
each • Federa assistance program as identified in the Catalog of
Federal Domestic_ Assistance . Federal programs or grants that have
not been assigned a .catalog number shall be identified under the
caption "other ,Federal ,assistance . " ' .
. • . ( 2) . The auditor 's report on the study and evaluation : of
• internal control systems, must identify the organization 's
significant internal accounting controls , and those controls .
designed to provide reasonable assurance' that Federal programs are
being managed• in compliance' with' laws, and regulations . It must .
also identify the controls that were evaluated, the controls "that
were not evaluated, and the material weaknesses identified. as a •
result of the evaluation. .
(3) The. auditor 's report on compliance containing: •
-- a statement of positive assurance with ' respect
. to those items tested for compliance, including compliance with law
• and regulationspertaining to financial reports and claims for •
advances' and reimbursements ; . . •
-- negative assurance on those items not tested ;
-- a summary of 'all instances of nonco4 liance ; and •
4•
-- an. identification of• total amounts questioned,
if any, for each Federal assistance, award, as a ' result of
noncompliance . ' ' • .
I
b. The three_ parts of the audit 'report may be bound into a
. single report, Or presented at the same time as separate documents .
c. All fraud abuse, or illegal acts or indications of such
acts,- including all questioned costs found. as the result of these •
• acts that_ auditors become aware of, should normally be covered in a
• separate written report. submi.tted in accordance with paragraph 13f.
d. In addition to the audit report, the recipient shall '
provide' comments ' on the findings and recommendations in . the report,
including a plan. for corrective- action taken ' or' planned and com-
ments on .the status . of corrective action ' taken on prior findings .
. If corrective action it not necessary, a statement describing .the
reason it is not should accompany the audit report. .
•
• e. • The' reports shall be made available by the State or local .
government for public inspection within 30 days after the
completion of the audit. .
•
f . In accordance with generally accepted" government audit
• standards , reports- shall be submitted .by :the auditor to ' the organi-
zation audited. and to those requiring : or arranging for the audit .
In addition, the recipient shall submit copies of the reports. to '
each Federal department or agency that provided Federal assistance .
funds to the recipient. Subrecipients .shall submit copies to •
'recipients that provided them Federal. assistance funds . The
. reports shall be sent within 30 days after the completion of the •
audit, ' bu t no later than one .year after the end of the audit period
unless a longer period is agreed to with :the cognizant agency.
•
10
g. Recipients of`-more than -$100,000 in Federal funds shall
submit one copy of the audit report within. 30.. days after issuance
to a central clearinghouse to be designated by the Office of
Management and- Budget.. The clearinghouse will keep completed
audits on file and follow up with State and local governments that
have not submitted required audit reports,
h. Recipients shall keep audit reports on file for three
years from their issuance. •
14 . Audit Resolution. As provided in paragraph 11 , the cognizant
agency shall be responsible for monitoring the resolution of audit
findings that affect the programs of more than one Federal agency.
Resolution of findings that relate to the programs of a single •
Federal agency will be the responsibility of the recipient and that
• agency. Alternate arrangements may be made on a . case-by-case basis
by agreement among -the agencies concerned.
Resolution shall be made within six months after receipt of
the report by the Federal departments and agencies. Corrective •
action should -proceed as rapidly ;as possible.
- 15. Audit workpapers and reports. Workpapers and reporXs :shall be
retained for a minimum of three years from the date of the audit
report, unless the auditor is notified in writing by the .cognizant .
agency to extend the retention period. Audit workpapers shall be
made available upon request to the cognizant agency or its designee
or the General Accounting Office, at the completion of the audit.
16. Audit Costs. The cost of audits made in accordance with the
• provisions of this. Circular are allowable charges to Federal
assistance programs.
a . The charges may be considered a direct cost or. an '
allocated indirect cost, determined in accordance with the
provision of Circular A-87, "Cost principles ..for. State and local
governments. " -
b. Generally, the percentage of- costs charged to Federal.
assistance programs for a single audit shall not exceed the
percentage that 'Federal funds expended represent of total funds
expended by the recipient during the fiscal. year. The percentage
may be exceeded, however, if appropriate documentation demonstrates
h.igher .actual cost. •
17 . Sanctions. The' Single Audit Act provides ' that • no cost may be
• charged to Federal assistance programs for audits required by the - .
Act that are • not made in accordance with this Circular. In cases
of continued. inability or unwillingness to have a proper audit,
Federal agencies must consider other appropriate sanctions
including:
-- withholding a . percentage of assistance.. payments
• until the audit is completed satisfactorily,
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-- withholding or disallowing overhead costs, and •
-- suspending the Federal ..assistance. agreement until
the 'audit is made .
18 .. Auditor Selection.
In arranging for audit . services State and
local • governments shall • follow. the. procurement standards prescribed
by Attachment 0 of 'Circular A-102, "Uniform requirements for
to State and local governments.._" grants
recipients are encouraged to enter Tinto tintergovernmenards e l agree while
ments for audit :and other services, analysis should betmadegtoe
• - determine: whether it would be more economical to purchase • the
_ services from private firms. • In instances where use of such. in '
governmental agreements are required by State statutes td
services ) these statutes will take precedence.' (e•.g•.� , audit
19. Small and Minorit Audit ..Firms . Small audit firms
firms owned and controlled .by and audit
taged . individuals. shall have ythe cmaximuman practicable d lopply ortunitn
- participate ' in contracts .awarded y to
this Circular. . Recipients of , Federraluassistancethe rshalletakt-s of
following steps to .further this goal: , the
a . : Assure that small - audit firms and'.audit firms owned and
controlled by socially and 'economically disadvantaged individuals
are 'used to the fullest extent practicable.
r .
b. • Make information on forthcoming opportunities
and arrange timeframes for the audit .so as t oencou:raage and lfabil
i
ta'te participation by small audit firms :and audit firms owned and .
. controlled by socially and economically disadvantaged individuals .
c. Consider in 'the contract process-whether firms competing - .
for larger audits- intend to subcontract with small audit firms and
audit firms owned and controlled. by socially and economicall
disadvantaged individuals. Y
O. - Encourage contracting with •small audit firms or audit
firms owned and controlled by socially and economically disadvan-
taged individuals which have traditionally- audited government •
programs and, in such cases where this is not possible, assure that
.these firms are given consideration for audit subcontract-in
-opportunities'.. . 9
e . Encourage contracting with consortiums of small audit
. f ir.ms as described ,in paragraph (a ) above when a.- _contract is too
•
large for an individual small audit firm' or a-udit firm owned and
controlled by" socially -and economically disadvantaged individuals. . .
f. Use . the services .and assistance , as appropriate , .
organizations as the Small Business Administration inthe- solicita-
tion -a.nd utilization of small audit firms or audit - firms owned
controlled. by socially and economically disadvantaged individualsnda
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20 . Reporting. Each Federal agency Will report to the Director of
' OMB on or before March 1 , 19874 and annually thereafter on the
• effectiveness of State and local governments in carrying out the
provisions of this Circular. The report must identify each State
or local government or Indian KFibe that, in the opinion of the
• agency, is failing: to comply :with the Circular. •
21. Regulations. Each Federal agency shall include the provisions
of this Circular in its regulations implementing the. Single Audit
Act.
22. Effective. date. This Circular is effective upon publication
and shall apply to fiscal years of State and local governments
that begin' after December 31 , 1984. Earlier implementation is
encouraged. However, until it is .-implemented, . the audit provisions
•
of Attachment P to Circular A-102 shall continue to be observed.
23 . Inquiries. All questions- or inquiries should be addressed to
Financial Management Division, Office of Management and Budget,
telephone number 2.02/395-399.3.` . ��:}
24 . Sunset review date. This Circular-" shall have an.;:.independent
' policy review to ascertain its effectiveness three years from the.
date of issuance.
David A..; Stockman
. Director -
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, _ . • • . • Circular A- 128
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. • • . Definition of Major Program as - Provided . - ' •- . . .
. • in P.L. .98-502 . . . . •
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"Major Federal Assistance Program, " for State ana' lodal'governments
having Federal assistance expenditures •between $ 100, 000• an
, $ 100, 000, 000, .means _any program for which Federal expenditures - . . .
• during• the .applicable: year :expeed the larger of.:$300, 000, •cr 3
. percent of such total expenditures . . . .
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• Where- total expenditures of Federal assistance exceed '$ 100, 000, 000,
:.. . the following criteria apply: •
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. - . • Major Federal ..
Total Expenditures- of . • - Assistance Program .. * .
• Federal Financial Assistance Means any. Program
• for All Ptograms • - - That .Excpeas
more than - - but less than •
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. - •• $100 million • 1 billion . ' . . $ 3 million •
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•. • .. . 1 billion . . . 2 billion _ .
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4 million'
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2 billion • - -3 billion . . million
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• • 3 billion. - 4 billion. ' . 10 million
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- 4 billion : ' 5 billion . • . 13 milliOn
5 billion. • 6 billion • 16 million ••• •
• • - 6 billion ' 7 billion • . .
19 million• • . •
' .- over ' 7, billion . • • • - • 20 million
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