Applying A-133 to Nonprofit and Governmental Organizations

• Chapter 0 - A Roadmap for Today's Course and Environment
  • The Report on National Single Audit Sampling Project
    • Misreporting of Audit Coverage of Major Federal Programs
    • Unreported Audit Findings
    • Compliance Testing Not Documented as Performed or Not Applicable
    • Deficiencies in Understanding\Testing Compliance Internal Controls
    • Deficiencies in Risk Assessments as Part of Major Program Determination
    • Missing Audit Finding Information
    • Deficiencies in Presentation and Auditing of the SEFA
    • Errors in Management Representations Related to Federal Awards
    • Audit Materiality at the Major Federal Program Level Not Documented
    • Other Kinds of Deficiencies
    • A Discussion Related to Audit Sampling
    • Proposed Recommendations to Improve Audit Quality
    • Developments Since the 2007 Report
    • How the Report Relates to this Course
  • Additional Items to Watch For
    • The 2009 OMB A-133 Compliance Supplement
    • Guidance Related to SAS No. 115
    • Submissions of the 2008-2010 Data Collection Form (DCF)
    • SAS No. 74 Revision
• Chapter 1 - Introduction
  • Introduction
  • Relationship of the Single Audit Act Amendments and OMB Circular A-133
    • Single Audit Act of 1984
    • OMB Circular A-128
    • Thresholds
    • Audit Scope
    • Audit Frequency
    • Audit Reporting
    • 1990 OMB Circular A-133
    • Recommended Changes to the Single Audit Process
    • Revised Single Audit and OMB Circular A-133 Requirements
    • Effective Date
    • Definitions
    • Audit Requirements
    • Subrecipient and Vendor Determinations
    • Relation to Other Audit Requirements
    • Frequency of Audits
    • Sanctions
    • Audit Costs
    • Auditee's Responsibilities
    • Auditor Procurement
    • Financial Statements
    • Schedule of Expenditures of Federal Awards
    • Summary Schedule of Prior Audit Findings
    • Corrective Action Plan
    • Report Submission
    • Data Collection Form
    • Pass-Through Entities' Responsibilities
    • Audit Scope
    • Audit Reporting
    • Audit Working Papers (Audit Documentation)
    • The Reporting Entity
    • The Audit Period
    • Determining Major Federal Programs
  • Summary
  • Questions
• Chapter 2 - Identifying Federal Assistance and Determining Major Programs
  • Introduction
  • Schedule of Expenditures of Federal Awards
  • Determining Major Federal Programs
    • Illustrative Summary of the Risk-Based Approach
  • Summary
  • Questions
  • Appendix 2A
• Chapter 3 - Understanding, Assessing, and Testing Internal Controls and Testing Compliance with Laws and Regulations
  • Introduction
  • Consideration of the Internal Controls in an Audit Conducted in Accordance with GAAS
  • Consideration of Internal Control in an Audit Conducted in Accordance with Government Auditing Standards
  • SAS No. 115 and Audits Conducted in Accordance with Government Auditing Standards
  • Consideration of Internal Control in an Audit Conducted in Accordance with OMB Circular A-133
    • SAS No. 115
  • Definitions
    • Understanding Internal Control
    • Planning and Testing Internal Controls over Major Federal Programs
  • Internal Control Testing
  • Compliance Requirements
  • Testing Compliance with Laws and Regulations
  • Identification of Major Federal Programs
  • Audit Testing
  • Compliance Testing
  • Allowable Costs/Cost Principles
  • Other Compliance Testing
  • Questioned Costs
  • Representation Letter
  • Summary
  • Questions
• Chapter 4 - Audit Reports
  • Introduction
  • Audit Reports
    • Audit Reporting
    • Elements of a Finding
    • Presentation Guidance
    • Report Submission
    • Reporting Package
  • Data Collection Form
    • Clearinghouse Responsibilities
    • Access to Working Papers
  • Summary
  • Questions and Case
    • Case Study 4-1
• Chapter 5 - Program-Specific Audits
  • Introduction
  • Program-Specific Audit Requirements
  • Guide Not Available
    • Auditee
    • Auditor
    • Reporting on Program-Specific Audit
  • Submission for Program-Specific Audit Reports
  • Illustrative Reports
  • Summary
• Chapter 6 - Audit Tools and Guidance
  • Introduction
  • OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations
    • General
    • Pre-Award Requirements
    • Post-Award Requirements
    • After-Award Requirements
  • OMB Circular A-110 Implementation
    • Agencies Issue Implementation Actions
  • The Common Rule . Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments
  • OMB Circular A-122, Cost Principles for Nonprofit Organizations
    • Appendix A . General Principles
    • Appendix B . Selected Items of Cost
    • Appendix C . Nonprofit Organization Not Subject to Circular A-122
  • OMB Circular A-21, Cost Principles for Educational Institutions
    • Allowability of Costs
    • Direct Costs
    • Facility and Administrative Costs
    • Selected Items of Cost
    • Certificate of F&A Costs
    • Certification of Charges
    • Cost Accounting Standards for Educational Institutions
  • OMB Circular A-87, Cost Principles for State, Local and Indian Tribal Governments
    • Purposes and Scope
    • Appendix A of Revised A-87 . General Principles
    • Appendix B . Standards for Selected Items of Cost
    • Appendix C . State/Local Central Service Allocation Plans
    • Appendix D . Public Assistance Cost Allocation Plans
    • Appendix E . State and Local Indirect Cost Rate Proposals
  • The 2007 Yellow Book Revision
  • Summary
  • Questions
• Chapter 7 - Latest Developments
• Appendix A - Single Audit Act Amendment of 1996
• Appendix B - OMB Circular A-133 as published in 6/30/97 Federal Register
• Appendix C - Excerpts from OMB Circular A-133 Compliance Supplement
• Appendix D - Data Collection Form Information
• Appendix E - 6-27-03 Notice of Revision to OMB Circular A-133
• Appendix F - Illustrative Reports
• Appendix G - Illustrative Schedule of Findings and Questioned Costs
• Appendix H - 6-26-07 Notice of Revision to OMB Circular A-133
• Appendix I - Organizations Issuing Government and Nonprofit-Related Publications
• Appendix J - National Single Audit Sampling Project

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Chapter 1

Introduction

• Understand the relationship of Office of Management and Budget (OMB) Circular A-133 to the Single Audit Act Amendments of 1996.
• Review the purpose and applicability of the revised Single Audit.
• Understand the key definitions included in the revised Single Audit.
• Understand the audit thresholds of the revised Single Audit.
• Perceive the audit scope and objectives of the revised Single Audit.
• Understand the responsibilities of those organizations administering federal awards under the revised Single Audit.
• Review the relationship of Single Audit requirements to other federal audit requirements.

Relationship of the Single Audit Act Amendments and OMB Circular A-133

Single Audit Act of 1984

Background
The Single Audit Act of 1984 (the Act) established uniform audit requirements for state and local governments and Indian tribal governments receiving federal financial assistance. The Act did not apply to nonprofit organizations.

It built on earlier efforts to improve audits of federal awards. Before its passage, federal awards were audited on a grant-by-grant basis. There were also extensive duplication and overloading of audit effort.

• Improve financial management by state and local governments.
• Provide uniform audit requirements.
• Promote efficient and effective audit resource use.
• Ensure reliance on and use of audit work performed under the Single Audit.

The Act replaced the grant-by-grant audit approach with a single audit approach of federal awards, and it required the Director of the OMB to prescribe policies, procedures, and guidelines to implement it. Congress also directed the OMB to establish similar audit requirements, through regulation, for nonprofit organizations receiving federal awards.

OMB Circular A-128
OMB Circular A-128, Audits of State and Local Governments, was issued on April 12, 1985, pursuant to the Single Audit Act of 1984, and established audit requirements for state and local governments that received federal awards.

Thresholds
The Single Audit Act of 1984 and OMB Circular A-128 required a Single Audit when in any fiscal year federal assistance of $100,000 or more was received. Single Audits could also be elected when federal assistance of $25,000 or more but less than $100,000 was received. If the Copyright AICPA * Unauthorized Copying Prohibited 1-3 Single Audit was not selected, individual assistance audits were required. No audit was required when total federal assistance of less than $25,000 was received.

Audit Scope
Under the Act and Circular A-128, the audit scope generally encompassed the entire financial operations of each applicable government. It included the financial statements, internal controls over compliance with federal assistance requirements, and compliance with laws and regulations that may have had a material effect on financial statements and each major federal program.

Major federal assistance program, for state and local governments having federal assistance expenditures between $100,000 and $100,000,000, meant any program for which federal expenditures during the applicable year exceed the larger of $300,000, or 3% of such total expenditures.

Audit Frequency
The Acts and Circular A-128 normally required annual audits but did permit biennial audits under certain circumstances.

Audit Reporting
The Act and Circular A-128 required reports on financial statements, the schedule of federal assistance, internal controls over compliance with laws and regulations, and compliance with federal laws and regulations.

• Financial statements.
• Schedule of federal assistance.
• Entity's internal controls relative to the financial statements.
• Entity’s compliance with laws and regulations relative to the financial statements.
• Internal controls over federal financial assistance.
• General compliance over federal financial assistance.
• Specific compliance over major federal programs.
• Specific compliance over non-major federal programs.

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