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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

PART

OMB A-123SAS 112

Single AuditsGAO

IPIA 2002

GMLoB

PL 106=-1-7Grants.gov

FFATAS.2590

Grant Requirements

GRANTS

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Distribution of Federal Grants

4%

1%

80%

8%

7%

States

Locals

Universities

Non-Profits

Tribes, For-Profit, Others

2009 US BUDGET - $3.1 TRILLION GRANTS- $500 BILLION

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Steep Rise in Federal Grants

0

50

100

150

200

250

300

350

400

450

1960 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006

$7B$24B

$91B

$200B

$450B

CFDA lists more than 1000 Federal grant programs

In Billion of $

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$$$$ #Programs

Department of Agriculture …………………………………… $25.7 68 Department of Commerce ...................................... 0.6 40Department of Education ........................................ 40.1 124Department of Energy ............................................. 0.3 4Department of Health and Human Services .....256.6 169Department of Homeland Security……………………………. .9.1 32Department of Housing and Urban Development .........34.8 31Department of the Interior ........................................ 4.1 66Department of Justice ................................................ 3.8 60Department of Labor ................................................. 7.1 22Department of Transportation .................................... 46.8 20Department of the Treasury ....................................... 0.3 1Department of Veterans Affairs ................................. 0.3 6

Environmental Protection Agency ................................ 3.8 44Other agencies ......................................................... 2.2 --

Total .....................................................................435.7 Billion

FY 2006 Budgeted Grants to State & Local FY 2006 Budgeted Grants to State & Local Governments by AgencyGovernments by Agency

I’m DHHS, Hear me roar,

RAA!!

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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

(IN $ BILLION)(IN $ BILLION)

TOP 10 FEDERAL PROGRAMSTOP 10 FEDERAL PROGRAMS

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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

What’s the LAW ?

$500 B

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National Single Audit Sampling Project

Final Report Issued June 2007http://www.ignet.gov/pande/audit/NatSamProjRptFINAL2.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

PCIE Recommendations

Federal Workgroups

Recommended ChangesBetter Auditors

Better Protection of Federal $

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Single Audit Improvement Process

System Support

Incentives

Good RulesGuidance

Training

Good Auditor

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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”