Single Audit Update

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Single Audit Update

• Gilbert Tran
• Executive Office of the President
• Office of Management and Budget

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Agenda

• The Big Grant Picture
• Single Audit Requirements
• National Single Audit Sampling Project
• Federal Single Audit Workgroups

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You know, we spend a lot of time and a lot of
effort collecting your money, and we should show
the same amount of effort in reporting how we
spend it. Every year, the federal government
issues more than 400 billion in grants, and more
than 300 billion in contracts to corporations,
associations, and state and local governments.
Taxpayers have a right to know where that money
is going, and you have a right to know whether or
not you're getting value for your
money President Bush, signing the Federal
Funding Accountability and Transparency Act of
2006, September 26, 2006.
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The Garden of Grants
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Distribution of Federal Grants
2009 US BUDGET - 3.1 TRILLION GRANTS- 500
BILLION
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Steep Rise in Federal Grants
In Billion of
450B
200B
91B
24B
7B
CFDA lists more than 1000 Federal grant programs
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FY 2006 Budgeted Grants to State Local
Governments by Agency
Im DHHS, Hear me roar, RAA!!
Programs Department of
Agriculture 25.7 68
Department of Commerce ..........................
............ 0.6 40 Department of
Education ........................................
40.1 124 Department of Energy
.............................................
0.3 4 Department of Health and Human
Services .....256.6 169 Department of Homeland
Security. .9.1 32 Department of
Housing and Urban Development .........34.8
31 Department of the Interior ....................
.................... 4.1 66 Department of
Justice ..........................................
...... 3.8 60 Department of Labor
.................................................
7.1 22 Department of Transportation
.................................... 46.8
20 Department of the Treasury ....................
................... 0.3 1 Department of
Veterans Affairs .................................
0.3 6 Environmental Protection Agency
................................ 3.8
44 Other agencies ................................
......................... 2.2 -- Total
..................................................
...................435.7 Billion
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TOP 10 FEDERAL PROGRAMS
(IN BILLION)

• Medicaid 177.2
• Highway Planning Const. 35.8
• TANF - HHS 19.2
• Section 8 Housing Choice Vouchers 14.7
• Title I Education 12.3
• Special Education to States 10.1
• Head Start 6.8
• National School Lunch Program 6.8
• Foster Care 4.7
• Nutrition Program for WIC 4.6

Total 292.2 Billion
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OMB Grants Management Circulars

• Cost Principles (Gilbert Tran)
• A-21- Colleges Universities
• A-87- Governments
• A-122- Non-Profits
• Administrative Requirements (Marguerite Pridgen)
• A-102- Governments
• A-110- Everyone Else
• Audit Requirements (Gilbert Tran)
• A-133- Everyone
• Compliance Supplement

500 B
Whats the LAW ?
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National Single Audit Sampling Project

• Final Report Issued June 2007
• http//www.ignet.gov/pande/audit/NatSamProjRptFINA
  L2.pdf

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Sample Design

• 208 single audits from universe of 38,523 audits
  successfully submitted to clearinghouse April 1,
  2003 to March 31, 2004
• 96 of 208 were from 852 audits of entities that
  expended Federal Awards of 50 million or more
  (Stratum I)
• 112 of 208 were from 37,671 entities that
  expended less than 50 million in Federal Awards
  (Stratum II)

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Classification of Audits

• Acceptable
• Limited reliability because of significant
  deficiencies
• Unacceptable

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Summary Results

• Acceptable - 115 (49)
• Large 61 (63.5) , Smaller 54 (48.2)
• Limited reliability because of significant
  deficiencies 30 (16)
• Large 12 (12.5), Smaller 18 (16.1)
• Unacceptable 63 (35)
• Large 23 (24), Smaller 40 (35.7)
• Fed Awards Reported 53/57 billion (93)
  Acceptable

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Deficiencies

• Audit Documentation did not evidence auditor
  understanding of the 5 elements of internal
  control and testing of internal controls for many
  or all applicable compliance requirements.
  However, documentation did evidence that most
  required compliance testing was performed
• Audit documentation did not evidence internal
  control testing and/or compliance testing for
  more than a few compliance requirements, or did
  not explain why they were not applicable for the
  auditee
• Audit documentation did not evidence that audit
  work relating to the SEFA was adequately
  performed, or did not evidence that audit
  programs were used for auditing internal
  controls, compliance and/or the SEFA

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Single Audit Improvement Process
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Single Audit Improvement Process
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Federal Workgroups

• Good Rules Guidance
• Revisions to A-133 and AICPA Guidelines to report
  audit findings
• Revisions to A-133, AICPA Audit Guide and OMB
  Compliance Supplement to document the required
  compliance testing
• Revisions to A-133 and AICPA for audit testing
  and sampling
• Training
• Revisions to A-133 to require SA training. 
  Development of training curriculum 

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Federal Workgroups

• Incentives
• Review of suspension debarment process and
  identify alternative methods to address
  unacceptable audits
• Coordination with other SA constituencies for
  sanctions and punitive actions for substandard
  audits.  Revisions to A-133 to any proposed
  sanction language
• System Support
• Coordination with PCIE to issue uniform standards
  on QCRs
• The New and Improved Single Audit Process

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INVENT THE FUTURE