a-133 audit readiness

TheTheWesleyWesleyPeachtreePeachtreeGroupGroupCERTIFIED PUBLIC ACCOUNTANTSCERTIFIED PUBLIC ACCOUNTANTS

(404) 874-0555WPG-INC.COM

PRESENTEDPRESENTEDBY...BY...

The Wesley Peachtree Group, CPAs• Largest minority-owned firm in southeast• Specializes in higher education• Particular focus on HBCUs• Auditors of Title III Programs

• Topic—Improving A-133 Audit Preparedness• Takeaways—A Better Understanding of A-133

Requirements and the Audit Process

1.A-133 Compliance Requirements2.Selected Items Requested During the Audit3.Common Audit Compliance Deficiencies

Understanding OMB Circular A-133 Compliance Requirements

A - Activities Allowed or UnallowedB - Allowable Costs/Cost PrinciplesC - Cash ManagementD - Davis-Bacon ActE - EligibilityF - Equipment and Real Property ManagementG - Matching, Level of Effort, Earmarking

Understanding OMB Circular A-133 Compliance Requirements

H - Period of Availability of Federal FundsI - Procurement and Suspension and DebarmentJ - Program IncomeK - Real Property Acquisition Relocation Assistance

L - ReportingM - Sub-recipient MonitoringN - Special Tests and Provisions

A - Activities Allowed or Unallowed

• Unique to each Federal program• Grant specific

B - Allowable Costs/Cost Principles

• Three cost principles circulars1. OMB Circular A 87—“Cost Principles for State, ‑

Local, and Indian Tribal Governments” 2. OMB Circular A-21—“Cost Principles for

Educational Institutions” 3. OMB Circular A-122—“Cost Principles for Non-

Profit Organizations”

C - Cash Management

• Reimbursement basis• Advance basis• Rule of thumb

D - Davis-Bacon Act

• Construction and renovation contracts• Dollar threshold

F - Equipment and Real Property Management

• Tag• Track• Threshold

H - Period of Availability of Federal Funds

• Funding period• Extended period (no cost extension)

I - Procurement and Suspension and Debarment

• Procurement– Procurement procedures

• Suspension and Debarment– Covered transaction– Threshold– Government website link http://epls.arnet.gov

L - Reporting

• Financial Reporting• Performance Reporting• Special Reporting

• Summary• www.whitehouse.gov/omb/circulars_default• Questions

Selected Items Requested During the Audit & How They Are Utilized

Overview

Selected Items Requested During the Audit & How They Are Utilized

Schedule of Expenditures of Federal Awards

Selected Items Requested During the Audit & How They Are Utilized

Grant award notification with budgets and narratives (Compliance Requirements: All)

Selected Items Requested During the Audit & How They Are Utilized

Budget versus actual comparison pulled directly from the accounting system. (Compliance Requirement: A, B)

Selected Items Requested During the Audit & How They Are Utilized

Documentation supporting allocation of common costs. (Compliance Requirement: A, B)

Selected Items Requested During the Audit & How They Are Utilized

Schedule of salaries and fringes charged to Title III. (Compliance Requirement: A, B)

Selected Items Requested During the Audit & How They Are Utilized

Sample selection of disbursements determined by auditor (Compliance Requirements: A, B, F, H, I)

Selected Items Requested During the Audit & How They Are Utilized

Time and effort reports (Compliance Requirements: A, B, H)

Selected Items Requested During the Audit & How They Are Utilized

General ledger support for all cash drawdowns made during the year. (Compliance Requirements: C)

Selected Items Requested During the Audit & How They Are Utilized

Evidence of periodic monitoring of compliance with the Davis-Bacon Act. The dollar threshold for project qualifying under the Davis-Bacon Act is $2,000. (Compliance Requirements: D)

Selected Items Requested During the Audit & How They Are Utilized

All program reports submitted for performance, financial and special purposes. (Compliance Requirements: L)

Selected Items Requested During the Audit & How They Are Utilized

SummaryQuestions

Common Audit Compliance Deficiencies

Overview

Common Audit Compliance Deficiencies

Title III Director and Business Office personnel do not consistently and properly approve expenditures.

Common Audit Compliance Deficiencies

Time effort reporting is not maintained, properly approved or accurately allocated to salary expense.

Common Audit Compliance Deficiencies

Adequate documentation such as invoices, purchase orders and/or requisitions are not available to support expenditures.

Common Audit Compliance Deficiencies

Drawdowns are received in excess of three days of needs.

Common Audit Compliance Deficiencies

The $2,000 threshold under the Davis-Bacon is often overlooked.

Common Audit Compliance Deficiencies

Competitive bidding is not properly solicited and/or documented.

Common Audit Compliance Deficiencies

Due diligence is not performed and/or documented to verify vendor qualifications were compared to government databases for suspensions and debarments (http://epls.arnet.gov).

Common Audit Compliance Deficiencies

Annual performance and financial reports are not filed timely.

Common Audit Compliance Deficiencies

SummaryQuestions

Topic—Improving A-133 Audit Preparedness1. A-133 Compliance Requirements2. Selected Items Requested During the Audit 3. Common Audit Compliance Deficiencies

Takeaways—A Better Understanding of A-133 Requirements and the Audit ProcessContact us with any additional questions

Thank You!

Feedback•Evaluation Questionnaire – Tell us how we met your expectations

Follow-up •The Wesley Peachtree Group, CPAs

Office: (404) 874-0555– Don K. Murphy, CPA don@wpg-inc.com– Keith X. Terrell, CPA keith@wpg-inc.com

•Also available in handouts.

Donald K. MurphyDonald K. Murphy Keith X. TerrellKeith X. Terrelldon@wpg-inc.comdon@wpg-inc.com keith@wpg-inc.comkeith@wpg-inc.com

(404) 874-0555WPG-INC.COM