Resolution 320-1986
~~.~....;...--~
Louis LaTorre, Director
Social Services
RESOLUTION NO. 3~O-1986
A RESOLUTION OF THE BOARD OF COUNTY COMMISSIONERS
OF MONROE COUNTY, FLORIDA, AUTHORIZING THE MAYOR
AND CHAIRMAN OF SAID BOARD TO EXECUTE AMENDMENT
#1 BY AND BETWEEN THE STATE OF FLORIDA DEPARTMENT
OF HEALTH AND REHABILITATIVE SERVICES AND MONROE
COUNTY CONCERNING THE U.S.D.A. FOOD PROGRAM.
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
MONROE COUNTY, FLORIDA, that said Board hereby authorizes the
Mayor and Chairman of the Board to execute Amendment #1 by and
between the State of Florida Department of Health and
Rehabilitative Services and Monroe County, a copy of the same
being attached hereto, concerning the U.S.D.A. Food Program.
PASSED AND ADOPTED by the Board of County Commissioners of
Monroe County, Florida, at a regular meeting of said Board held
on the 7th day of November, 1986.
BOARD OF COUNTY COMMISSIONERS
OF MONROE COUNTY, FLORIDA,
By:
~/.. -~W
~'-_...
MAYOR/CHAIRMAN
(SEAL)
Attest: DANNX L. KOLHAGE, Clerk
--I2L?~fl~
APPROVED AS TO FOR/!li
ANOL6GALSUFRC~NC~
f?Y~.~
Attt'mej"s Office
AMENI::ME:m' #-L-
nus AMENDMENl', E...._.__ into between the State of Florida, Departnent
of Health and Rehabilitative Services, hereinafter referred to as the "depart-
ment" an:l Monroe County , hereinafter
referred to as the "provider". emends contract #
1. Section-2!.-, Paragraph --!.....-is hereby anended to read:
The Depa.rt:Irent Agrees: To pay for contracted services accordin; to the
conditions of Attachment I in an arrount not to exceed $ 4 815.00 ,
subject to the availability of furrls. 'Ibis is an increase/~ease fran
$ 3,732.00 to $ 4,815.00
2. Attachment--!.....-, Paragraph~is hereby amended to read:
Methcx:l of Paynent: 1. The departnent shall reillburse the provider for
a total dollar aII'OUIlt up to 4.0 percent of the year to date value of the
ccrrmodi ties distributed by the provider, (in accordance with Section
B-4, a.~.) subject to availability of funds... T!1e percentage value of
c:cmncxlities distributed shall not exceed the total project cost as stated
in the contract.
3. This arrendIrent shall begin on October 1, 1986 , or the date on which
the arnendrrent has been signed by both parties, whichever is later.
All provisions in the contract an:l any attachments thereto in conflict
with this arrendIrent shall be and are hereby cha.n:1e$I to COnfOI:m with this amend-
ment.
All provisions not in conflict with this arnendnent are still in effect
and are to be performed at the level specified in the contract.
This amendrrent and all its attachrrents are hereby made a part of the con-
tract.
IN WITNESS WIERIDF, the parties hereto have caused this ~ge amend-
ment to be executed by their officials thereunto duly authorized. .
ProVIDER
STATE OF FLORIDA
DEPARl'MENl' OF HEAL'lli AND
REHABILITATIVE SERVICES
BY:
BY:
TITLE:
TITLE :
DATE:
DATE:
FEDEAAL I. D. NUMBER
~J~\L~~ ~.
(.,'::L',,,,~
10/01/86
BUDGET AMENDMENT
EXHIBIT I
Operations
Food Distribution
Emergency Feeding
Organization (EFO)
DATE
AGENCY
CONTRACT #
EFFECTIVE DATE REQUESTED
CATEGORY/LINE ITEM
FORMER BUDGET CHANGE
NEW BUDGET EXPLANTATION
GRAND TOTAL
Requested by
DATE
Approved by HRS Contract Manager
DATE
Approved by HRS Grants Office
DATE
10/01/86
EXHIBIT II
Agency Name
Proposed Budget
10/1/86-9/30/87
A.
Personnel:
1. Coordinator
Issuance Clerk
Driver
Others
Overtime
Raises
(Hourly Rate)
(Hourly Rate)
(Hourly Rate)
(Hourly Rate)
(Hourly Rate)
(Hourly Rate)
( specify)
(specify)
(specify)
Total Salary
2. Fringe Benifits:
A. FICA
E. Workman's Compensation
C. Unemployment:
D. Health Insurance
Total Fringe
Total Personnel Costs
B. Office Support:
1. Supplies
2. Telephone
3. Postage
4. Printing
5. Reproduction-Copies
Total Office Support Costs
C. Trave1:_
1. Local
2. Meetings
D.
Storage/Transportation
1.
2.
3.
4.
5.
6.
Truck Rental
Storage
Utilities
Transportation -
Towing & Repair Cost
Total Storage/Transportation
Total Proposed Operating Budget
Requested By
Operations
Food Distribution
Emergency Feeding
Organization (EFO)
$----------
$----------
$----------
$----------
$----------
$----------
$----------
$----------
. )
fllJ..~] ST^TE OF FLORID^
~ DEP~n:E!'IT OF HEALTH AND REHABIUTATIVE SERVICES
August 27, 1986
.-'
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RECEIVED'i
SEP 18 l~oo
CENTRAL FINANCIAL
SERVICES
f~ L !..:f~[/; .- ,: .:. I
. \..... I
)
A number of contract managers, providers and CPAs have
requested that the department develop a sample format for a
financial and compliance audit. The attached "example"
audit report is intended to illustrate what the department
believes to be an acceptable' format for audits performed for
a private nonprofit corporation in acqordance with OMS
Circular A-110 and generally accepted governmental auditing
standards. This is not to imply that this is the only
acceptable format. Also, this example does not display
prior year comparative figures, although they would be
desirable.
The amount of compliance testing is that which will enable
the independent CPA to render the opinions and reports
contained in the attached example. This is a matter of
professional judgement based upon the particular system of
accounting, records and internal controls of each provider.
Also attached is a copy of the general audit program used by
Audit Services in performing compliance audits of Alcohol,
Drug Abuse, Mental Health and certain other programs. This
audit program is NOT required to be used and is provided for
information purposes only. Many steps in a compliance auoit
can be combined with similar steps in the financial audit.
In addition, the single financial and compliance audit
should be of the entire entity and will encompass all
programs, not just HRS programs.
Following is a list of recommended references with which the
auditor should be familiar:
1.
OMS Circular A-128, "Audits of State and Local
Governments"
)
1317 W1NEWOOD BLVD. . T^LLAH^SSEE, FL 32301
BOBGR^H^M.GOVER~OR
2. OMB Circular A-llO, "Grants and Agreements with
Instltutlons of Higher Education, Hospitals, and
other Nonprofit Organizations"
3. "Standards for Audit of Governmental
Organizations, Programs, Activities, and
Functions", (1981 Revisionl U.S. General
Accounting Office (Yellow Book)
4. "Audits of State and Local Governmental Units",
Revised Edition, AICPA, January 1986
Items 1, 2 and 3 may be ordered from:
Superintendent of Documents
U.S. Governmental Printing Office
Washington, D.C. 20402
(202 783-3238
In addition, the auditor should be familiar with the terms
of contracts and rules relative to restricted ~unding.
These should be obtained from the provider or from the
contract manager.
Please call Daniel Doll or Roy J. McCaslin at (904) 487-1240
if you have questions concerning audit requirements.
sincerely,
~~
RdYTJ.' McCaslin
Audit Services Administrator
. r :"i'~.I) ~..
. \~.. '... "':..... VI
~~'
OFFICE OF MANAGE;>.i"Nf AND BUDGE!
WASHINGTON. D.C. 20603
f
April 12, 1984
CIRCULAR No. A-128
..--.....--.
;-~;~~?:-: .-.
. .
TO THE HSA'OS"OF- EXECUTIVE DEPARTME-m-S AND ESTP:BL{S'HHF;:~-TS','~:-
-.''':~~":":-' .
SUBJECT: "Audi ts of Sta te and Local Governments.-.
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-.-"......
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1. :?urDose~ This Circular is issl.lcd pursuar;t' to' the Single
Audit Act of 1984, P.L. 98-502. It establishes ~udit requiremont:3
for State and local governments that'receive Federal aid, and
defines Federal responsibilities for implementing and monitoring
those requirements.
..:""':-':';"';:"-""
2. Suoerse"sslon. The Circular suparsedes Attachment- P, -:'\udit
Requirements,. of Circular A-l02, .Uniform requirements for grants
to State and local governments."
3. Eackaround. The Single Audit Act builds upon earlier efforts
to improve audits of Federal aid programs. The Act r_~guires ~_~a.to
Q.L.1.Q~ql..9,over!'lments that receive $100,000 or more a year in
Federal. funds to have an audit made for that year. Section 7505
of the Act requires the Director of the Office of Management and
Budget to prescribe policies, procedures and guidelines to
implement the Act. It specifies that the Director shall designate
"co]nizant" Federal agencies, determine criteria for making
api:':opriate charges to Federal programs for the cost of audits,
and provide procedures to assure that srrall firms or firms owned
and controlled by disadvantaged individuals have the opportunity
to participate in contracts for single audits.
4. Policy. The Single Audit Ac~ requires the following:
a. _$J:.a.t.e or l.9.cal-9.o-y.ernments that receive SlOO,OOO or more
a year in Federal financial assistance shall have an audit rrade in
accorcance with this Circular.
~. State Gr local governments that receive .l:>et~e_eJ1.__$25,000
and SlOQ,OOOa_ye.ar shall have an audit made in accord3.nce .....ith
this Circular, .or in accordance with Federal laws and regulations
gcver~ir.g the programs they participate in.
~. State or local govern.'1\ents 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
goverr.~ents shall be governed by audit requirements prescribed by
State or local law or regulation.
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 ~tate or local governments.-
5. Definitions. For the purposes of this Circular the fo11Ewing
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 includ~s 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 ~it1e 5, United States Code.
d. "Generally accepted accounting principles. has the
meaning specified in the generally accepted government auditing
standards.
e. .Genera1ly accepted government auditing standards" means
the Standards For Audit of Government Oraanizations, Proarams,
Activities, and Functions, developed by the Comptroller General,
dated Fehruary 27, 1981.
f. "Independent audi_t_or" means:
(1) a State or local government auditor who meets the
independence stanearcs specified in generally accepted government
auditing stanc.ards; 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 a::-e obtained, maintained, and fairly
d~sclosed in reports.
h. .Indian trihe. means any Indian tribe, band, nations, or
. other organized gro community, including any Alaskan Native
village or regional or vlllage corporations (as definen in, or
established under, the Alaskan Native Claims Settlement Act) that
is recognized by the United States as eligible fo~ the special
programs and services provided by the United States to Indians
because of their status as Indians.
1. "Local government" means any unit of iocal 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 local government._
- . ~ . ..-
j. "Major Federal Assistance Program,. as del:ined by
P.L. 98-502, is described in the Attachment to this Circular.
k. "Public accountants. means those individuals who meet
the qualification standards included in generally accepted
government auditing standards for personnel performing government
audits.
1. "State. means any State of the United States, the
District of Columbia, the COIT~onwealth of Puerto Rico, the 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.
m. nSubrecipient" means any person or government
department, agency, or establishmentthat receives Fede-ral
"financial assistance to carry.auta-program through a State or
local government, but does not include an individual that is a
beneficiary of such a program. A subrecipient rray also be a
direct recipient of Federal financial assistance.
6. Sco~e of audit. The Single Audit Act provides that:
a. The audit shall be made by an independent auditor in
accordance with generally accepted government auditing standards
covering financial and compliance audits.
b. The aGdit shall cover the entire operations of ~ St~te
or local government or, at the option of that gover~~ent, it may
cover departments, agencies 0::- establishments that received,
expended, or otherwise administered Federal financial assistance
curing the year. However, if a State or local government receives
525,000 or more in General Revenue Sharing Funes in a fiscal year,
it shall have an audit of its entire operations. A series of
audits of individual deDartments, agencies, andestablishrnents for
the sa",e fiscal year-l113y-be" considered a single- audit";" "
4
c. Public hospitals and pUblic colleges and universities
may be excluded from State ~nd local audits and the iequirements
of this Circular. However, if such entities are excluded, audits
of these entitif:!s shall be made in accord3nce with statutory
require~ents and the provisions of Circular A-1ID, "Uniform
require~ents for grants to universities, hospitals, and other
nonprofit organizations."
d. The auditor shall determine whether:
(1) the financial statements of the gpvernment,
department, agency or establishment present fairly its financial
position an.d the results of its financial operations in accordance
with generally accepted accounting principlesl
(2) the organization has internal accounting and other
control syste~s to provide reasonable assurance that it is
managing Federal financial assistance programs in compliance with
applicable laws and regulations; and
(3) the organization has complied with laws and regula-
tions that may have material effect on its financial statements
and on each major Federal assistance program.
7. Freauencv of audit. Audits shall be made annually unless the
State or local government has, by January 1, 19B7, a constitu-
tional or statutory requirement for less frequent audits. For
those governments, the cognizant agency shall per~it biennial
audits, covering both years, if the government.so requests. It
sh~~l also honor requests for biennial audits by governments that
have an administrative policy calling for audits less frequent
than annual, but only for fiscal years beginning before January 1,
19B7.
8. !nterr.al control and com::>liance reviews. The Single Audit
Act requires that the independent auditor determine and report on
whether the organization has internal control systems to provide
reasonable assurance that it is managing Federal assistance
~rogra~s in com~liance with applicable laws and regulations.
a. Internal control review. In order to provide this
assurance the auditor m\lst rrake a study and evaluation of internal
~ontrol systems used in administering Federal assistance programs.
7he study.and evaluation must be made whether or not the auditor
intencs to place reliance on such systems. As part of this
revie..., t:"le auditor shall:
..
(1) Test whether these internal control systems are
functioning in accoreance with prescribed procedures.
(21 ExamtD_~...th.~]ecipient' s system. for monitoring
su~r::.~_ci.?ie.nts and gD.ta.ining. and .acting on subrecipient audit
;:.~_2S2E_ ~ 5 .
b. Comolianc ew. The law also requires the auditor to
~etermine whether the organization has complied with laws and
::egulations that rray have a rrBterial effect on each major federal
assistance ~rogram.
(1) In ot"det" to determine which rrajor 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
include funds received directly from Federal agencies and through
other State and local governments.
(2) The review must include the selection and tc~ting
of L~~.es~l1t?J:j_v~_.numbe.r..,ofcharges from eachmajor X_e<?~r.~l
assistance program. The selection and testing of transactions
shall be based on ~he auditor's professional judgment considering
such factors as the amount of expenditures for the program and the
individual a....ards; 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., inspections,
program reviews); .the extent to which the progt"am is cat"t"ied Ollt
thr_QJ.tgh,suqt"ecipients., the extent to which the program contracts
for goods or services; the level to wh.ic~t:.!1~_p.E'~Jl!Cc:~_,~~ alread~
Stbject _t.9-prog.ram re~i~.ws or other fClrms of independent
p.:{S!_r.E_i-9.Q.t; th'e adequacy of--the cont"r"ols foi-'ens-ur lng-compliance;
the expectation of adherence or lack of Gdnerence to the
applicable laws and regulations; and the potential impact'of
adverse findings.
~ (a) In making the test of transactions, the
aL~itor 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:
rratching requirements, levels of effort
and ear~arking limitations were met,
o
Federal financial reports and claims for
advahces 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 OMB Circular A-a?, "Cost
principles for State and local governments," and Attachment F of
Circular A-ID2, "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 Comoliance Supplement for Sinale Audits of State and Local
Governnents, issued by O~lB and available fro:n the Government
Printing Office. For those programs not covered in the Compliance
Supplement, the auditor may ascertain compliance requirements by
researching the statutes, regulations, and agreements governing
individual programs.
(3) Transactions related to other Federal assistance
programs that are selected in connection with examinations of
financial statements and evaluations of internal controls shall be
tested for compliance with Federal laws and regulations that apply
to such transactions.
9. S~!:n-ecipients. Sta~_~~Y;_ local .governments that receive
Federal financial assistance and provide 525,000 or more of it in
a fiscal year to a subrecipient shall:
a. determine whether Sta t.e_ _QJ:"__~oc':l.L.s.ubrecipients ha ve met
the audi t requ irements of this Circula rand whether- subiecipients
covered by Circular A-lID, "Uniform requirements for grants to-
universities, hospitals, and other nonprofit organizations," have
met that requirement;
b. determine whether the subrecipient spent Federal
assistance :unds provided in accordance with applicable law5 and
regulations. This rray be accomplished by reviewing an audit of
the subrecipient made in accordance with this Circular, Circular-
A-llO,~ouch-other means (e.a., Droaram reviews) if the
subrecipient has not yet-had- .suCh anaudit.;-----_.. --
c. ensure that appropriate .f..<2TJecJ:.iy~_?ct.iQn is taken
within six months after receipt of the audit report in instances
of nonco~~liance with Federal laws and regulations;
d. consider whether subrecipient audits necessitate
adjust~ent of the recipient's own records; and
e. Lequire_.each _subrecipient..to. permit independent auditors
LQ._ha')e "ccess to the records and financial statements as
necc:O~":i' :.~ co;nply with this Circular. .
10. Relation to other audit recuirements. The Single Audit Act
provides that an a ace in accordance with this Circular shall
be in lieu of any J.J.l1dl1cial or financial compliance audit required
under individual federal assistance programs. To the extent that
a single audit provides Federal agenci.es l-lith information and
assurances they need to carry out their overall responsibilities,
they shall rely upon and use such information. nowever, a federal
agency shall make any additional audits which are necessary 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 agencies 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
ether Federal audit official.
b. The provisions of this Circular do not authorize 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 audits 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. Coonizant aaency resDonsibilities. The Single Audit Act
provides tor 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 oovernments and their subdivisions. Other Federal aoencies
nay pa;ticipate with an assigned cognizant agency, in orde~ to
fulfill the cognizance responsibilities. Srraller governments not
assigned a cognizant agency will be under the general oversight of
the Federal agency that provides them the most funds whether
d:rectly or indirectly.
b. A cognizant agency shall have the ~ollowing
responsibilities:
(1) Ensure that audits are rrade and reports are
receivec 1n a timely rranner and in accordance with the
requircc.ents of this Circular.
(2) Provide technical advice and liaison to State and
local ~overr.men~s and independent auditors.
8
(3)' Obta make quality control reviews of selected
~udits rrade by non-Federal audit organizations, and provide.the
results, when appropriate, to other interested or~anizations.
(4) Promptly inform other affected 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 audits that have been found
not to have met the requirements set forth in tnis Circular. In
such instances, the recipient will be expected to work with the
auditor to take corrective action. If corrective action is not
tar.~n, the cognizant agency shall notify the recipient and Federal
awarding agencies of the facts and make recommendations 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 audits rrade
pursuant to this Circular; so that the additional audits build upon
such audits.
(7) Oversee the resolution of audit findings that affect
the programs of more than one agency.
12. Illeoal acts or irreaularities. If the auditor becomes aware
ofJ:llegal acts or other irregularities, prompt notice shall be
given to recipient management officials above the level of involve-
ment. (See also paragrRph 13(a)(3) below for the auditor's report-
ing respo~sibilities.) The recipient, in turn, shall promptly
notify the cognizant agency of the illegal aCts or irregularities
and of ;roposed and actual actions, if any. Illegal acts and
irregularities include such rratters as conflicts of interest,
falsification of records or reports, and misappropriations of funds
or other assets.
13. Aucit ReDorts. Audit reports must be prepared at the
co~;le~lGn of th€ audit. Reports serve many needs of State and
local ~overnments as well as meeting the requirements of the Single
Aucit Act.
a. The audit report shall state that the audit was made in
Gccc~c=~ce with the provisions of this Circular. The report shall
b~ rr~de Gp of at least:
(1) The auditor's report on financial statements and on
a schecule of federal assistance; the financial statements; and a
schedule of Federal assistance, showing the total expenditures for
.eech ~'ed~~al a5sis~arlCe p~o~ram as iJ2n~iric~' ill Lhe C~~aio~ 6~
yc:deral D:)lnestic Assistance. Federal programs or grants that have
not Deen asslgned a catalog number shall be identified under the
~a?tion "other Federc ,stance."
(2) The auditor's report on the study and evaluation of
internal control systens 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 complianCl:! containing:
a statement of positive assurance with respect
to those items tested for compliance, including compliance with law
and regulations pertaining to financial reports and claims fer
advances and reirrbursements; --
negative assurance on those items not tested:
a summary of all instances of nonco~liance; and
an identification of total amounts questioned,
if any, for each Federal assistance award, as a result of
non com.? 1 i a n ce.
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
actE~ including all questioned costs found as the result of these
acts that auditors become aware of, should normally be covered in a
separate wri~ten report submitted in accordance with paragraph 13f.
d. In addition to the audit report, the recipient shall
provlce cc~~ents on the findings and recommendations in the report,
ir.cl~di~g a plan for corrective action taken or planned and com-
ments C~ the status of corrective action taken on prior findings.
If corrective action is not necessary, a statement describing the
reason it is not should accompany the audit report.
€. :':-:e rep~::ts shall be IT,ade available by the State or local
gove::n~e~~ for punlic inspection within 30 days after.the
co~pletio~ of the audit.
~. I~ accordance with generally accepted government audit
sta~cards, reports shall be submitted by the auditor to the organi-
za~lC~ aG~i~ed 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
f~~ds to t~e recipient. Subrecipients shall submit copies to
=ec:?ie~:s ~hat p~oviced them Federal assistance funas. The
~D c~~s s~211 besen~ ~ithin 30 G2YS Gfter the co~?letion of the
a~ i:, ~~':. r:o late::- ~h2n olle ye2.~ cfte:r the ena of the a~dit pe:-iod
-...... ~s.s .:: 1-:>;-:ge:- ?e::-ios IS aqreea to "'.lith the cognizant cgency.
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 ~learinghouse 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 paragrapJl 11, the cognizant
agency shall be responsible for monitoring the resolution of audit
findings that affect the programs of more than one Federal ugency.
Resolution of findings that relate to the programs of a single
Federal agency will be the responsibility 0: 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
th~_report-bY-the Federal departments and agencies. Corrective
a~tion should proceed as rapidly as possible.
---
15. Audit workpaDers and reports. Workpapers and reports shall be
retained for a minimum of three years from the date of the audit
report, unless the auclitor is notified .in writing by the cognizant
agency to extend the retention period. Audit workpapers -shall be
~ade 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
pr~~isions of this Circular are allowable charges to Federal
assistance programs.
, 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 cos~s charged to Federal
assistance programs for a single audit shall not exceed the
percentage tha~ Federal funds expended represent of total funds
expended by the recipient during the fiscal year. The percentage
~ay be exceeded, however, if appropriate documentation demonstrates
higher actual cost.
17. Sanctions. The Single Audit Act provloes that no cost may be
charged to rederal assistance programs for audits requir.ed by the
Act that are not roade in accordance with this Circular. In cases
of continued inability or unwillingness to have a proper audit,
rederal agencies must consider other appropriate sanctions
incluCing:
-- ~ithholding a percentage of assistance payments
until the audit is completed satisfactorily,
~~
with
9 or disallowing overhead costs, and
suspending the Feder~l assistance agreement until
the audit is made.
18. Auditor Selection. In a~ranging fo~ audit se~viccs State and
local governments s~all follow the procurement standa~ds prescribed
by Attachment 0 of Circular A-I02, "Uniform requirements for grants
to State and local governments." The standards provide that while
recipients are encouraged to enter into intergovernmental agree-
ments for audit and other services, analysis should be made to
determine whether it would be more economical to purchase the
services from private firms. In instances whe~e use of such inter-
governmental agreements are required by State statutes (e.g., audit
services) these statutes will take precedence.
19. S~~ll and Minoritv Audit Firms. Srr~ll audit firms and eudit
firms owned and controlled by socially and economically disadvan-
taged individuals shall have the maximum practicable opportunity to
partici?ate in contracts awarded to fulfill the requirements of
this Circular. Recipients of Federal assistanc~ shall take the
following steps to further this goal:
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.
b. Make inforrn3tion on forthcoming opportunities available
and arrange timeframes for the audit so as to encourage and facili-
tate participation by small audit firms and audit firms owned and
c0~trolled 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 fir~s owned and controlled by socially and economically
disadvantaged individuals.
d. Encourage contracting with small audit firms or audit
fir~s owned and controlled by socially and economically disadvan-
taged individuals which have traditionally audited government
progca~s and, in such cases where this is not possible, assure that
these firms are given consideration for audit subcontracting
c;~ortunities.
e. Sncourage contracting with consortiums of small audit
firms as described in paragraph (a) above when a contract is too
~arce for an individ~al small audit firm or audit firm owned and
controlled by socially and economlcally disadvantaged individuals.
&
Use the
tions as
utilizat
~d jy soe
services and assistance, as appropriate, of such
he S~~ll Busine s Administration in the solicita-
on of small aud t firms or audit firms owned and
ally and econom cally disadvantaged individuals.
c~~a~~=
ti8~ a~
cor.~rol
12
20. . ReDorting. Each Feder'al agency will report to the Director of
OMS on or Defor'e March 1, 1987, and annually thereafter on the
effectiveness of State and local governments in carrying out the
provisions of this Circular'. The r'epor't must identify each State
Ot:' local government or Indian tribe that, in the opinion of the
agency, is failing to comply with the Circular.
21. Requlatio~s. Each Federal agency shall include the provisions
of this Circular in its regulations implementing the Single Audit
Act.
22. Effective date. This Cir'cular 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-l02 shall continue to be observed.
23. Inquiries. All questions or inquiries should be addressed to
Financlal Management Division, Office of Management and Budget,
telephone number 202/395-3993.
24. Sunset review date. This Circular shall have an independent
policy review to ascertain its effectiveness three years from the
date of issuance.
-'
a$.j~
David A. Stockman
Director
Circulur lI-12C
Attachment
Definition of Maior Prooram as Provided
in P. L. 98-502
"Major Federal Assistance Program," for State and local governments
having Pederal assistance expenditures between $100,000 and
5100,000,000, means any progra~ for which Federal expenditures
during the applicable year exceed the larger of 5300,000, or 3
percent of such total expenditures.
Where total expenditures of Federal assiscance exceed S100,000,000,
the following criteria apply:
TOtal Expenditures of
Federal Financial Assistance
for 1>.11 Proarams
more than but less than
Major Federal
Assistance Program
Means any Program
That Exceeds
5100 million
1 billion
2 billion
3 billion
4 billion
5 billion
6 billion
over 7 billion
1 billion
2 billion
3 bi llion
4 billion
5 billion
6 billion
7 billion
$ 3 million
4 million
7 million
, 0 million
, 3 million
16 million
, 9 million
20 million
,/