The auditor should contact the Office of Inspector General of the Federal agency to determine whether such a guide is available. When a current program-specific audit guide is available, the auditor shall follow GAGAS and the guide when performing a program-specific audit.
The auditor's report s shall state that the audit was conducted in accordance with this part and include the following:. However, for fiscal years beginning on or before June 30, , the audit shall be completed and the required reporting shall be submitted within the earlier of 30 days after receipt of the auditor's report s , or 13 months after the end of the audit period, unless a different period is specified in a program-specific audit guide.
Unless restricted by law or regulation, the auditee shall make report copies available for public inspection. Also, the auditee shall submit to the Federal awarding agency or pass-through entity the reporting required by the program-specific audit guide. Also, when the schedule of findings and questioned costs disclosed audit findings or the summary schedule of prior audit findings reported the status of any audit findings, the auditee shall submit one copy of the reporting package to the Federal clearinghouse on behalf of the Federal awarding agency, or directly to the pass-through entity in the case of a subrecipient.
A subrecipient may submit a copy of the reporting package to the pass-through entity to comply with this notification requirement. Federal program and award identification shall include, as applicable, the CFDA title and number, award number and year, name of the Federal agency, and name of the pass-through entity. Whenever possible, auditees shall make positive efforts to utilize small businesses, minority-owned firms, and women's business enterprises, in procuring audit services as stated in the A Common Rule, OMB Circular A, or the FAR 48 CFR part 42 , as applicable.
In requesting proposals for audit services, the objectives and scope of the audit should be made clear. Factors to be considered in evaluating each proposal for audit services include the responsiveness to the request for proposal, relevant experience, availability of staff with professional qualifications and technical abilities, the results of external quality control reviews, and price.
This restriction applies to the base year used in the preparation of the indirect cost proposal or cost allocation plan and any subsequent years in which the resulting indirect cost agreement or cost allocation plan is used to recover costs. To minimize any disruption in existing contracts for audit services, this paragraph applies to audits of fiscal years beginning after June 30, Federal auditors may perform all or part of the work required under this part if they comply fully with the requirements of this part.
The auditee shall prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The financial statements shall be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. The auditee shall also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use.
For example, when a Federal program has multiple award years, the auditee may list the amount of Federal awards expended for each award year separately. At a minimum, the schedule shall:. For Federal programs included in a cluster of programs, list individual Federal programs within a cluster of programs. While not required, it is preferable to present this information in the schedule. The auditee is responsible for follow-up and corrective action on all audit findings.
As part of this responsibility, the auditee shall prepare a summary schedule of prior audit findings. The auditee shall also prepare a corrective action plan for current year audit findings.
Since the summary schedule may include audit findings from multiple years, it shall include the fiscal year in which the finding initially occurred. The summary schedule of prior audit findings shall report the status of all audit findings included in the prior audit's schedule of findings and questioned costs relative to Federal awards.
The summary schedule shall also include audit findings reported in the prior audit's summary schedule of prior audit findings except audit findings listed as corrected in accordance with paragraph b 1 of this section, or no longer valid or not warranting further action in accordance with paragraph b 4 of this section. A valid reason for considering an audit finding as not warranting further action is that all of the following have occurred:.
At the completion of the audit, the auditee shall prepare a corrective action plan to address each audit finding included in the current year auditor's reports.
The corrective action plan shall provide the name s of the contact person s responsible for corrective action, the corrective action planned, and the anticipated completion date.
If the auditee does not agree with the audit findings or believes corrective action is not required, then the corrective action plan shall include an explanation and specific reasons. The audit shall be completed and the data collection form described in paragraph b of this section and reporting package described in paragraph c of this section shall be submitted within the earlier of 30 days after receipt of the auditor's report s , or nine months after the end of the audit period, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit.
However, for fiscal years beginning on or before June 30, , the audit shall be completed and the data collection form and reporting package shall be submitted within the earlier of 30 days after receipt of the auditor's report s , or 13 months after the end of the audit period. Unless restricted by law or regulation, the auditee shall make copies available for public inspection. The form shall be approved by OMB, available from the Federal clearinghouse designated by OMB, and include data elements similar to those presented in this paragraph.
A senior level representative of the auditee e. Individual programs within a cluster of programs should be listed in the same level of detail as they are listed in the schedule of expenditures of Federal awards. The auditor shall sign a statement to be included as part of the data collection form that indicates, at a minimum, the source of the information included in the form, the auditor's responsibility for the information, that the form is not a substitute for the reporting package described in paragraph c of this section, and that the content of the form is limited to the data elements prescribed by OMB.
All auditees shall submit to the Federal clearinghouse designated by OMB the data collection form described in paragraph b of this section and one copy of the reporting package described in paragraph c of this section for:. A subrecipient may submit a copy of the reporting package described in paragraph c of this section to a pass-through entity to comply with this notification requirement. In response to requests by a Federal agency or pass-through entity, auditees shall submit the appropriate copies of the reporting package described in paragraph c of this section and, if requested, a copy of any management letters issued by the auditor.
Auditees shall keep one copy of the data collection form described in paragraph b of this section and one copy of the reporting package described in paragraph c of this section on file for three years from the date of submission to the Federal clearinghouse designated by OMB. Pass-through entities shall keep subrecipients' submissions on file for three years from date of receipt.
Nothing in this part shall preclude electronic submissions to the Federal clearinghouse in such manner as may be approved by OMB. With OMB approval, the Federal clearinghouse may pilot test methods of electronic submissions. The designated cognizant agency for audit shall be the Federal awarding agency that provides the predominant amount of direct funding to a recipient unless OMB makes a specific cognizant agency for audit assignment.
Following is effective for fiscal years ending on or before December 31, To provide for continuity of cognizance, the determination of the predominant amount of direct funding shall be based upon direct Federal awards expended in the recipient's fiscal years ending in , , , and every fifth year thereafter.
For example, audit cognizance for periods ending in through will be determined based on Federal awards expended in Following is effective for fiscal years ending after December 31, The determination of the predominant amount of direct funding shall be based upon direct Federal awards expended in the recipient's fiscal years ending in , , , and every fifth year thereafter.
However, for through , the cognizant agency for audit is determined based on the predominant amount of direct Federal awards expended in the recipent's fiscal year ending in Notwithstanding the manner in which audit cognizance is determined, a Federal awarding agency with cognizance for an auditee may reassign cognizance to another Federal awarding agency which provides substantial direct funding and agrees to be the cognizant agency for audit.
Within 30 days after any reassignment, both the old and the new cognizant agency for audit shall notify the auditee, and, if known, the auditor of the reassignment.
The cognizant agency for audit shall:. The cognizant agency for audit may grant extensions for good cause. When advised of deficiencies, the auditee shall work with the auditor to take corrective action. If corrective action is not taken, the cognizant agency for audit shall notify the auditor, the auditee, and applicable Federal awarding agencies and pass-through entities of the facts and make recommendations for follow-up action.
Major inadequacies or repetitive substandard performance by auditors shall be referred to appropriate State licensing agencies and professional bodies for disciplinary action. The oversight agency for audit:.
The Federal awarding agency shall perform the following for the Federal awards it makes:. When some of this information is not available, the Federal agency shall provide information necessary to clearly describe the Federal award.
A pass-through entity shall perform the following for the Federal awards it makes:. When some of this information is not available, the pass-through entity shall provide the best information available to describe the Federal award. The management decision shall clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. If the auditee has not completed corrective action, a timetable for follow-up should be given.
Prior to issuing the management decision, the Federal agency or pass-through entity may request additional information or documentation from the auditee, including a request for auditor assurance related to the documentation, as a way of mitigating disallowed costs.
The management decision should describe any appeal process available to the auditee. Alternate arrangements may be made on a case-by-case basis by agreement among the Federal agencies concerned. The entity responsible for making the management decision shall do so within six months of receipt of the audit report. Corrective action should be initiated within six months after receipt of the audit report and proceed as rapidly as possible.
The audit shall cover the entire operations of the auditee; or, at the option of the auditee, such audit shall include a series of audits that cover departments, agencies, and other organizational units which expended or otherwise administered Federal awards during such fiscal year, provided that each such audit shall encompass the financial statements and schedule of expenditures of Federal awards for each such department, agency, and other organizational unit, which shall be considered to be a non-Federal entity.
The financial statements and schedule of expenditures of Federal awards shall be for the same fiscal year. The auditor shall determine whether the financial statements of the auditee are presented fairly in all material respects in conformity with generally accepted accounting principles. The auditor shall also determine whether the schedule of expenditures of Federal awards is presented fairly in all material respects in relation to the auditee's financial statements taken as a whole.
Where there have been changes to the compliance requirements and the changes are not reflected in the compliance supplement, the auditor shall determine the current compliance requirements and modify the audit procedures accordingly. For those Federal programs not covered in the compliance supplement, the auditor should use the types of compliance requirements contained in the compliance supplement as guidance for identifying the types of compliance requirements to test, and determine the requirements governing the Federal program by reviewing the provisions of contracts and grant agreements and the laws and regulations referred to in such contracts and grant agreements.
The auditor shall perform audit follow-up procedures regardless of whether a prior audit finding relates to a major program in the current year. The auditor's report s may be in the form of either combined or separate reports and may be organized differently from the manner presented in this section. This report shall describe the scope of testing of internal control and the results of the tests, and, where applicable, refer to the separate schedule of findings and questioned costs described in paragraph d of this section.
This report shall also include an opinion or disclaimer of opinion as to whether the auditee complied with laws, regulations, and the provisions of contracts or grant agreements which could have a direct and material effect on each major program, and, where applicable, refer to the separate schedule of findings and questioned costs described in paragraph d of this section.
Where practical, audit findings should be organized by Federal agency or pass-through entity. However, the reporting in one section of the schedule may be in summary form with a reference to a detailed reporting in the other section of the schedule. The auditor shall report the following as audit findings in a schedule of findings and questioned costs:.
The auditor's determination of whether a deficiency in internal control is a reportable condition for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program or an audit objective identified in the compliance supplement. The auditor shall identify reportable conditions which are individually or cumulatively material weaknesses. The auditor's determination of whether a noncompliance with the provisions of laws, regulations, contracts, or grant agreements is material for the purpose of reporting an audit finding is in relation to a type of compliance requirement for a major program or an audit objective identified in the compliance supplement.
Known questioned costs are those specifically identified by the auditor. In evaluating the effect of questioned costs on the opinion on compliance, the auditor considers the best estimate of total costs questioned likely questioned costs , not just the questioned costs specifically identified known questioned costs. In reporting questioned costs, the auditor shall include information to provide proper perspective for judging the prevalence and consequences of the questioned costs.
Except for audit follow-up, the auditor is not required under this part to perform audit procedures for such a Federal program; therefore, the auditor will normally not find questioned costs for a program which is not audited as a major program.
However, if the auditor does become aware of questioned costs for a Federal program which is not audited as a major program e. This paragraph does not require the auditor to make an additional reporting when the auditor confirms that the fraud was reported outside of the auditor's reports under the direct reporting requirements of GAGAS. Audit findings shall be presented in sufficient detail for the auditee to prepare a corrective action plan and take corrective action and for Federal agencies and pass-through entities to arrive at a management decision.
The following specific information shall be included, as applicable, in audit findings:. When information, such as the CFDA title and number or Federal award number, is not available, the auditor shall provide the best information available to describe the Federal award. Where appropriate, instances identified shall be related to the universe and the number of cases examined and be quantified in terms of dollar value.
Each audit finding in the schedule of findings and questioned costs shall include a reference number to allow for easy referencing of the audit findings during follow-up. The auditor shall retain working papers and reports for a minimum of three years after the date of issuance of the auditor's report s to the auditee, unless the auditor is notified in writing by the cognizant agency for audit, oversight agency for audit, or pass-through entity to extend the retention period.
When the auditor is aware that the Federal awarding agency, pass-through entity, or auditee is contesting an audit finding, the auditor shall contact the parties contesting the audit finding for guidance prior to destruction of the working papers and reports.
Audit working papers shall be made available upon request to the cognizant or oversight agency for audit or its designee, a Federal agency providing direct or indirect funding, or GAO at the completion of the audit, as part of a quality review, to resolve audit findings, or to carry out oversight responsibilities consistent with the purposes of this part.
Access to working papers includes the right of Federal agencies to obtain copies of working papers, as is reasonable and necessary. The auditor shall use a risk-based approach to determine which Federal programs are major programs. This risk-based approach shall include consideration of: Current and prior audit experience, oversight by Federal agencies and pass-through entities, and the inherent risk of the Federal program.
The process in paragraphs b through i of this section shall be followed. Type A programs are defined as Federal programs with Federal awards expended during the audit period exceeding the larger of:. When a Federal program providing loans significantly affects the number or size of Type A programs, the auditor shall consider this Federal program as a Type A program and exclude its values in determining other Type A programs. For example, it may be necessary for a large Type A program to be audited as major each year at particular recipients to allow the Federal agency to comply with the Government Management Reform Act of 31 U.
The Federal agency shall notify the recipient and, if known, the auditor at least days prior to the end of the fiscal year to be audited of OMB's approval. However, should the auditor select Option 2 under Step 4 paragraph e 2 i B of this section , the auditor is not required to identify more high-risk Type B programs than the number of low-risk Type A programs.
Therefore, the auditor is only required to perform risk assessments on Type B programs that exceed the larger of:. At a minimum, the auditor shall audit all of the following as major programs:. A Option 1. At least one half of the Type B programs identified as high-risk under Step 3 paragraph d of this section , except this paragraph e 2 i A does not require the auditor to audit more high-risk Type B programs than the number of low-risk Type A programs identified as low-risk under Step 2.
B Option 2. This paragraph e 3 may require the auditor to audit more programs as major than the number of Type A programs. The auditor shall audit as major programs Federal programs with Federal awards expended that, in the aggregate, encompass at least 50 percent of total Federal awards expended. The auditor shall document in the working papers the risk analysis process used in determining major programs.
When the major program determination was performed and documented in accordance with this part, the auditor's judgment in applying the risk-based approach to determine major programs shall be presumed correct.
Challenges by Federal agencies and pass-through entities shall only be for clearly improper use of the guidance in this part. However, Federal agencies and pass-through entities may provide auditors guidance about the risk of a particular Federal program and the auditor shall consider this guidance in determining major programs in audits not yet completed. For first-year audits, the auditor may elect to determine major programs as all Type A programs plus any Type B programs as necessary to meet the percentage of coverage rule discussed in paragraph f of this section.
Under this option, the auditor would not be required to perform the procedures discussed in paragraphs c , d , and e of this section. The auditor's determination should be based on an overall evaluation of the risk of noncompliance occurring which could be material to the Federal program. The auditor shall use auditor judgment and consider criteria, such as described in paragraphs b , c , and d of this section, to identify risk in Federal programs.
Also, as part of the risk analysis, the auditor may wish to discuss a particular Federal program with auditee management and the Federal agency or pass-through entity. Consideration should be given to the control environment over Federal programs and such factors as the expectation of management's adherence to applicable laws and regulations and the provisions of contracts and grant agreements and the competence and experience of personnel who administer the Federal programs.
When assessing risk in a large single audit, the auditor shall consider whether weaknesses are isolated in a single operating unit e. New and recently modified computer systems may also indicate risk. For example, recent monitoring or other reviews performed by an oversight entity which disclosed no significant problems would indicate lower risk.
However, monitoring which disclosed significant problems would indicate higher risk. OMB plans to provide this identification in the compliance supplement. Consideration should be given to the complexity of the program and the extent to which the Federal program contracts for goods and services. For example, Federal programs that disburse funds through third party contracts or have eligibility criteria may be of higher risk.
Federal programs primarily involving staff payroll costs may have a high-risk for time and effort reporting, but otherwise be at low-risk. For example, a new Federal program with new or interim regulations may have higher risk than an established program with time-tested regulations.
Also, significant changes in Federal programs, laws, regulations, or the provisions of contracts or grant agreements may increase risk. For example, during the first and last years that an auditee participates in a Federal program, the risk may be higher due to start-up or closeout of program activities and staff.
A non-Federal entity that has biennial audits does not qualify as a low-risk auditee, unless agreed to in advance by the cognizant or oversight agency for audit.
Compliance Audit means the procedure in a form advised by the GLA from time to time by which an auditor independent of the Grant Recipient certifies at the Grant Recipient's cost whether the Named Projects developed or Rehabilitated pursuant to this Agreement satisfy the GLA's procedural compliance requirements as described in the Affordable Housing Capital Funding Guide ;.
Reporting Requirements As defined in Section Assessment of Compliance As defined in Section 3. Performance Requirements means i with respect to a Segment or the System, the applicable System Performance Requirements set forth or to be developed by mutual agreement pursuant to the System Performance and Availability section of the Technical Volume, ii with respect to any System Upgrade, the applicable System Performance Requirements set forth in or to be developed by mutual agreement pursuant to the Technical Volume or iii in each case, such other Segment, System or System Upgrade performance levels as mutually agreed by the Parties.
Insurance Requirements means, collectively, all provisions of the Insurance Policies, all requirements of the issuer of any of the Insurance Policies and all orders, rules, regulations and any other requirements of the National Board of Fire Underwriters or any other body exercising similar functions binding upon each Loan Party which is an owner of Mortgaged Property and applicable to the Mortgaged Property or any use or condition thereof.
Statement of Requirements means a statement issued by the Authority or any Other Contracting Body detailing its Services Requirement issued in accordance with the Ordering Procedure;.
Listing Requirements means the Listing Requirements of the Exchange, as it may be modified or amended from time to time. OHS Requirements means all Laws applicable to the Supply and related to occupational health or safety, and all of the City Policies that relate to occupational health or safety, and includes without limitation the WCA;. Reportable Compliance Event means that any Covered Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint or similar charging instrument, arraigned, or custodially detained in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the effect that it is reasonably likely that any aspect of its operations is in actual or probable violation of any Anti-Terrorism Law.
Payment Requirement means the amount specified as being applicable to the Reference Entity in the Standard or its equivalent in the relevant Obligation Currency or, if no such amount is specified, USD 1,, or its equivalent in the relevant Obligation Currency in either case as of the occurrence of the relevant Failure to Pay or Potential Failure to Pay, as applicable.
Pretreatment requirements means any substantive or procedural requirement related to pretreatment, other than a pretreatment standard, imposed on an industrial user.
Monitoring Requirements Schedule means the Schedule containing details of the monitoring arrangements. Safety compliance facility means a licensee that is a commercial entity that receives marihuana from a marihuana facility or registered primary caregiver, tests it for contaminants and for tetrahydrocannabinol and other cannabinoids, returns the test results, and may return the marihuana to the marihuana facility.
Audit Report means a report summarising the testing completed and the actions arising following an Audit;. Relevant Requirements means all applicable Law relating to bribery, corruption and fraud, including the Bribery Act and any guidance issued by the Secretary of State for Justice pursuant to section 9 of the Bribery Act ;.
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