450-010-001-h Federal & Florida Single Audit 8-27 -09
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Approved: Effective: August 27, 2009 Office: Inspector General Topic No.: 450-010-001-h FEDERAL AND FLORIDA SINGLE AUDIT PURPOSE: To define responsibilities of Program/Project Managers within the Florida Department of Transportation (FDOT), hereafter called the Department, in administering state and federal assistance in accordance and compliance with the Section 215.97, Florida Statutes and Office of Management and Budget (OMB) Circular A-133. AUTHORITY: • Section 215.97, Florida Statutes (F.S.), Florida Single Audit Act (FSAA) • Sections 11.45, F.S., The Auditor General • Sections 20.23(3)(a) and 334.048(3), F.S. • Section 20.055, F.S., Agency Inspectors General • Chapter 27D-1, Florida Administrative Code (F.A.C.), Rules of the Executive Office of the Governor • Chapter 69I-5, F.A.C., Schedule of Expenditures of State Financial Assistance • Chapters 10.550, 10.650, and 10.700, Florida Administrative Code, Rules of the Auditor General • United States Office of Management and Budget Circular A-133 SCOPE: The principal users of this procedure are Program/Project Managers, responsible for administering federal and state financial assistance to local government agencies, nonprofit organizations, for-profit organizations, and other state agencies. This procedure is applicable to all programs receiving federal and/or state financial assistance. NOTE: Program/Project Managers can access statutory ...
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Approved: Effective: August 27, 2009 Office: Inspector General Topic No.: 450-010-001-h FEDERAL AND FLORIDA SINGLE AUDIT PURPOSE: To define responsibilities of Program/Project Managers within the Florida Department of Transportation (FDOT), hereafter called the Department, in administering state and federal assistance in accordance and compliance with the Section 215.97, Florida Statutes and Office of Management and Budget (OMB) Circular A-133 . AUTHORITY: • Section 215.97, Florida Statutes (F.S.), Florida Single Audit Act (FSAA) • Sections 11.45, F.S., The Auditor General • Sections 20.23(3)(a) and 334.048(3), F.S. • Section 20.055, F.S., Agency Inspectors General • Chapter 27D-1, Florida Administrative Code (F.A.C.), Rules of the Executive Office of the Governor • Chapter 69I-5, F.A.C., Schedule of Expenditures of State Financial Assistance • Chapters 10.550, 10.650, and 10.700, Florida Administrative Code, Rules of the Auditor General • United States Office of Management and Budget Circular A-133 SCOPE: The principal users of this procedure are Program/Project Managers, responsible for administering federal and state financial assistance to local government agencies, nonprofit organizations, for-profit organizations, and other state agencies. This procedure is applicable to all programs receiving federal and/or state financial assistance. NOTE : Program/Project Managers can access statutory provisions, requirements, rules and regulations on the Office of Inspector General’s (OIG) intranet website: http://infonet.dot.state.fl.us/inspectorgeneral/SingleAudit.htm . Other Information also available at this site includes: • Completion and submission of the Florida Single Audit Automated System automated checklist for Reviewing Single Audit Reports, Form No. 450-021-01
450-010-001-h Page 2 of 17 • Chapters 10.550, 10.650 and 10.700, Florida Administrative Code, Rules of the Auditor General • FSAA State Projects Determination Checklist FSAA Checklist for Non-State Organizations Recipients/Subrecipient vs. Vendor • Determination REFERENCES: Catalog of State Financial Assistance: https://apps.fldfs.com/fsaa/catalog.aspx Rules of Department of Financial Services: https://apps.fldfs.com/fsaa/rules.aspx Auditor General Rules: www.state.fl.us/audgen OMB Circular A133: www.whitehouse.gov/omb/circulars/a133/a133.html BACKGROUND: The United States Office of Management and Budget (OMB) issued a revised Circular A-133 dated June 27, 2003, effective for fiscal years ending after December 31, 2003. The circular was issued pursuant to the Single Audit Act of 1984 and the Single Audit Act Amendments of 1996 . It sets forth standards for obtaining consistency and uniformity among federal agencies for the audit of states, local governments, and nonprofit organizations expending federal awards. Section 215.97, F.S., established the Florida Single Audit Act , effective for fiscal years beginning on or after July 1, 2000, to: • Establish uniform audit requirements for non-state entities who receive state financial assistance to carry out state projects; • Promote sound financial management, including effective internal controls with respect to financial assistance administered by non-state entities; • Promote audit economy and efficiency by relying, to the extent possible, on already required audits of federal assistance provided to non-state entities; • Provide for identification of state financial assistance transactions in the state accounting records and recipient’s records; • Promote improved coordination and cooperation within and between affected state agencies providing and non-state agencies receiving state financial assistance; and • Ensure, to the maximum extent possible, that state agencies monitor, use and follow-up on audits of state financial assistance provided to non-state entities. The administration of funds awarded to a recipient will be subject to monitoring by the Department, State of Florida Chief Financial Officer or Florida Auditor General. These monitoring procedures may include on-site visits by Department staff.
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DEFINITIONS: AUDITEE When federal or state financial assistance is provided, the auditee is any non-federal or non-state entity, recipient/subrecipient that expends funds which must be audited under OMB Circular A-133 or Chapter 215.97, F.S. CATALOG OF FEDERAL DOMESTIC ASSISTANCE (CFDA) - A comprehensive listing of numbers assigned to federal programs. The catalog provides a listing of all federal programs available to state and local governments (including the District of Columbia); federally-recognized Indian tribal governments; territories (and possessions) of the United States; domestic public, quasi-public, and private profit and nonprofit organizations and institutions; specialized groups; and individuals. The catalog lists programs that meet the recipient/subrecipient’s federal single audit eligibility requirements. CATALOG OF STATE FINANCIAL ASSISTANCE (CSFA) - A comprehensive listing of state projects. The Department of Financial Services shall issue the Catalog of State Financial Assistance after conferring with the State of Florida Chief Financial Officer and all State agencies that provide state financial assistance to non-state entities. The Catalog of State Financial Assistance shall include for each state project: the responsible state agency; standard state project number identifier; official title; legal authorization; and description of the project, including objectives, restrictions, application and awarding procedures and other relevant information determined necessary. FEDERAL FINANCIAL ASSISTANCE - Assistance that non-federal entities receive or administer in the form of grants, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations and other assistance, but does not include amounts received as reimbursement for services rendered to individuals as described in Sections . 205(h) and .205(i) of OMB Circular A-133 . The Federal Single Audit Act is not applicable to for-profit organizations that receive federal financial assistance. FINANCIAL REPORTING PACKAGE - Consists of the financial statements, Schedule of Federal Awards and State Financial Assistance, auditor’s reports, management letter, current year audit findings and questioned costs (if any), auditee’s written responses or corrective action plan, auditor’s report on compliance and internal controls and a schedule of any prior years audit findings, including their current status. FLAIR - Florida Accounting Information Resource subsystem is the official State of Florida accounting system. Its functions include, but are not limited to: accounting and reporting so as to provide timely data for producing financial statements for the state in accordance with accounting principles generally accepted in the United States, and auditing and settling claims against the state. It was developed pursuant to the Florida Financial Management Information System Act , contained in Sections 215.90-215.96, F.S. FOR-PROFIT ORGANIZATION - Any organization or sole proprietor that is not a local governmental entity or a nonprofit organization.
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LOCAL GOVERNMENT - Any unit of local government within a state such as, a county, borough, municipality, city, town, township, parish, local public authority, special district, intrastate district, council of governments, and any other instrumentality of local government including a Metropolitan Planning Organization (MPO). MANAGEMENT DECISION - A documented determination made by the Program/Project Manager regarding audit findings, questioned costs and corrective action plans received from the recipient. NON-FEDERAL ENTITY - A state, local government, or nonprofit organization. NONPROFIT ORGANIZATION - A corporation, trust, association, cooperative, or other organization that is operated primarily for scientific, educational, service, charitable, or similar purposes in the public interest, and is not organized primarily for profit. Net proceeds of these entities are used to maintain, improve, or expand its operations and no parts of its income or profit is distributable to its members, directors, or officers. The term nonprofit organization includes nonprofit institutions of higher education and hospitals. NON-STATE ENTITY - A local government entity, nonprofit organization or for-profit organization that receives state resources. OIG - Office of Inspector General. PASS-THROUGH ENTITY - Any non-federal entity that provides a federal award to a subrecipient to carry out a federal program. When state financial assistance is provided, the pass-through entity is any non-state entity that provides a state award to a subrecipient (another non-state entity) to carry out a state program. PROGRAM / PROJECT MANAGER - A Department employee responsible for management of federal or state financial assistance, reviewing the audit report package, completing the on-line Automated Checklist for Reviewing Single Audit Reports , making management decisions and initiating any follow up on audit findings and questioned costs. See Section 3.1 for additional Program/Project Manager responsibilities. RECIPIENT - For federal financial assistance, this is a non-federal entity, like FDOT, that expends federal awards received directly from a federal awarding agency to carry out a federal program. For state financial assistance, this is a non-state entity (such as a unit of local government) that expends state financial assistance received directly from a state awarding agency. STATE FINANCIAL ASSISTANCE - Financial assistance from state resources, not including federal financial assistance and state matching, provided to non-state entities to carry out a state project. State financial assistance includes all types of assistance as stated in the Rules of the Department of Financial Services , established in consultation with the Chief Financial Officer and appropriate state agencies that provide state financial
450-010-001-h Page 5 of 17 assistance. It includes assistance provided directly by state awarding agencies or indirectly by recipients of state awards or subrecipients. State financial assistance does not include procurement contracts used to buy goods or services from vendors. The Florida Single Audit Act is not applicable to state agencies that receive state financial assistance. STATE MATCHING - State resources provided to non-state entities used to meet federal financial participation matching requirements of federal programs. STATE PROGRAM - A set of special purpose activities undertaken to realize identifiable goals and objectives in order to achieve a state agency’s mission and legislative intent requiring accountability for state resources. STATE PROJECT - A state program that provides state financial assistance to a non-state entity and needs an assigned CSFA number. SUBRECIPIENT - For federal financial assistance, a non-federal entity that expends federal awards received from a pass-through entity to carry out a federal program. For state financial assistance, a subrecipient is a non-state entity that receives state financial assistance through anot e non-state entity h r . VENDOR - A dealer, distributor, merchant or other seller providing goods or services required for the conduct of a federal program or state project. These goods or services may be for an organization's own use or for the use of beneficiaries of the federal program or state project. 1. AUTOMATED CHECKLIST FOR REVIEWING SINGLE AUDIT REPORTS AND PROCEDURES The OIG implemented the Automated Checklist for Reviewing Single Audit Reports including instructions on its use, which can be accessed at: http://infonet.dot.state.fl.us/inspectorgeneral/SingleAudit.htm The purpose of the system is to automate the Department’s financial assistance monitoring process. It helps the Department, OIG, Auditor General and the State of Florida Chief Financial Officer to collect information and perform compliance required for the Federal and Florida Single Audit Acts in a more efficient, accurate and timely manner. Implementation of the Automated Checklist for Reviewing Single Audit Reports benefits the Department by: • Making compliance with Federal and Florida Single Audit Acts more efficient, accurate and timely; • Tracking compliance with the Federal and Florida Single Audit Acts; and • Providing a completeness check for oversight work which did not exist in the manual process.
450-010-001-h Page 6 of 17 2. SINGLE AUDIT OBJECT CODE SELECTION Encumbering funds for single audit projects is performed in accordance with Procedure No. 350-020-200, Contract Funds Management Funds Approval , http://ombnet.dot.state.fl.us/procedures/bin/350020200.pdf , and the Contract Funds Management Handbook available on the Office of Comptroller (OOC) Infonet. During the encumbering process, Program/Project Managers are required to select an object code for the project. Single audit projects are assigned specific object codes. Federally funded projects have a 79XXXX code, while state funded projects have a 75XXXX code. If a 79XXXX or 75XXXX object code is not shown, another object code should not be randomly chosen. The Program/Project Manager must contact the General Accounting Office to get an appropriate single audit object code established. Once the appropriate code is entered, the encumbering process can be completed. The following information is needed for object code requests when establishing a new program and requesting a new CSFA number from the Department of Financial Services: 1. The state standard object code series to which the expenditures belong. The state standard object code list can be found at the Chief Financial Officer’s (CFO) web site: http://www.myfloridacfo.com/aadir/Objectcodes.pdf. Assistance for determining the state standard series can be obtained from the OOC Disbursements Operations Office. 2. The CSFA number, if the object code will be in the state standard object code series 75XXXX 3. A proposed title (up to 46 characters) 4. Reason for the request 5. Requestor’s name and office 6. Accounting fund in which the expenditures will be incurred (such as 55-10-2-540001) 7. The category to be correlated with the object code Requests are made via email to the Financial Reporting Administrator and the Financial Reporting Coordinator in the Department’s General Accounting Office. 3. RESPONSIBILITIES 3.1 PROGRAM / PROJECT MANAGERS Program/Project Managers are responsible for ensuring accountability of both federal and state financial assistance. The OIG will assist Program/Project Managers in the execution of their duties which include: 1. Identifying resources which constitute state or federal financial assistance;
450-010-001-h Page 7 of 17 2. Advising recipients and subrecipients of requirements imposed on them by federal/state laws, regulations and provisions under their agreements. (JPA, MOA, LFA, LAP, etc.); 3. Completing the State Project Determination and the Non-State Organizations Recipient/Subrecipient vs. Vendor Checklists ; 4. Initiating the process to establish CSFA numbers, if needed, at the time a project is set up within the Work Program; 5. Notifying recipients of the CFDA or CSFA title, number and award year; 6. Verifying that the Dun & Bradstreet, Data Universal Numbering System (DUNS), is used with all federal grants or cooperative agreements; 7. Verifying that the proper CFDA, CSFA, DUNS and contract numbers are used on the contract’s front page header and included with the FLAIR payment entries; 8. Ensuring that all financial reporting packages are received; 9. Reviewing the financial reporting package to ensure that recipients and subrecipients met all the time frames and audit requirements; 10. Retaining all reports and checklists in the appropriate project/contract file; 11. Sending copies of checklists to Disbursement Operations Office, Contract Section; 12. Issuing management decisions on audit findings; 13. Developing a corrective action timetable with the recipient and ensuring that appropriate corrective action is initiated and completed; 14. Notifying the OIG when recipient’s corrective action is not timely completed; 15. Ensuring that Department records accurately reflect expenditures for financial assistance and adjusting Department records when appropriate; and 16. Completing the Automated Checklist for Reviewing Single Audit Reports accurately and timely. 3.2 OFFICE OF COMPTROLLER 1 The Office of Comptroller (OOC) is responsible for assisting in the Department’s compliance with the Federal and Florida Single Audit Acts . Office of Comptroller Single Audit responsibilities include: 1. Assigning appropriate object codes (75XXXX for state and 79XXXX for federal) and establishing the codes in FLAIR. New object codes are established primarily when there is a new grant. However, as part of establishing object codes in FLAIR, the new code is associated with the related appropriation category. For this association, there can only be one category associated with each object code. Therefore, when additional categories are to be associated with an existing grant, separate object codes must also be established; 2. Updating the FLAIR grant files for new or expired grants; 3. The OOC Disbursements Operations Office (or appropriate District Financial Services Office) processes payments for financial assistance expenditures with the CFDA/CSFA number provided by the Program/Project Manager.; and 4. Office of the Comptroller’s General Accounting Office maintains the Central Contractor Registry (CCR) information and ensures appropriate access to
450-010-001-h Page 8 of 17 www.grants.gov . FDOT users are required to apply and track grants through that website. 3.3 BUDGET OFFICE 1 The Budget Office is responsible for assisting the Department’s compliance with the Federal and Florida Single Audit Acts . Budget Office Single Audit responsibilities include: 1. Assisting in the Identification of state programs; 2. Reviewing the State Project Determination Checklist in consultation with the Office of Work Program; 3. Assisting with reviewing and preparing forms of agency’s request for new CSFA numbers; 4. Assisting in providing responses and management decisions for audit findings; and 5. Implementing applicable portions of the Federal and Florida Single Audit Acts and United States Office of Management and Budget memorandums. 3.4 OFFICE OF INSPECTOR GENERAL 2 The Office of Inspector General is responsible for assisting the Department’s compliance with the Federal and Florida Single Audit Acts . The OIG’s responsibilities include: 1. Assisting Department personnel with the identification of state programs; 2. Reviewing FSAA State Project Determination Checklist ; 3. Reviewing the FSAA Compliance Supplement form; 4. Performing single audit compliance reviews; 5. Advising the district and central offices’ Program/Project Managers on Single Audit issues; 6. Processing of annual CSFA number certifications; 7. Reviewing the Auditor General’s Annual Federal Awards Audit and the Department of Financial Services’ Comprehensive Annual Financial Report (for Florida); notify district and central offices of audit findings; 8. Responding to and/or assisting with responses and management decisions for audit findings; and 9. Monitoring and implementing applicable portions of the Federal and Florida Single Audit Acts , United States Office of Management and Budget memorandums and Florida Rules of the Auditor General .
1 The Office of Comptroller and Budget Office refer to divisions within the Florida Department of Transportation. 2 The Office of Inspector General refers to a division with the Florida Department of Transportation.
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4. FINANCIAL ASSISTANCE The administration of funds awarded to a recipient will be subject to monitoring by the Department, appropriate Federal agency officials, State of Florida Chief Financial Officer and Auditor General. These monitoring procedures may include on-site visits by Department staff or other monitoring activities conducted by state agencies. 4.1 FEDERAL FINANCIAL ASSISTANCE OMB Circular A-133 is applicable whenever the Department uses federal financial assistance or passes it on (as a pass-through entity) to a state, local government, or nonprofit organization. Note: The Auditor General’s Annual Federal Awards Audit covers the auditing of these expenditures. The OIG receives and reviews these audits and notifies the Program Managers of any relevant audit findings. 4.1.1 DUNS Number -Office of Management and Budget Memoranda, M-03-16 , requires the use of a Dun and Bradstreet (D&B) Data Universal Numbering System (DUNS) number when applying for Federal grants or cooperative agreements. The Department DUNS number of 80-939-7102 is used on all applications for Federal grants or cooperative agreements beginning October 1, 2003. Program/Project Managers need to ensure that this requirement has been followed. Note: If any agreements were entered into that do not include a DUNS number, an amendment to the agreement needs to be provided to the recipient/subrecipient notifying them of the DUNS number. 4.1.2 Grants.gov Some federal grants require applications to be submitted via the www.grants.gov website. Individuals authorized by FDOT to apply for grants should register, if needed, with this site. The Office of Comptroller- General Accounting Office (GAO) , Accounts Receivable Section will be notified of registration electronically via grants.gov and will verify the approved users. For further assistance with the registration process, please contact the GAO Accounts Receivable Administrator. 4.1.3 Audits Required -Recipients or subrecipients that expend $500,000 or more annually in federal awards are required to have a single or program-specific audit conducted in accordance with the provisions of OMB Circular A-133 . The amounts of federal awards expended should be in accordance with the guidelines established in the Circular and shall consider all sources of federal awards, including those received through the Department. 4.1.4 Audit Costs -Unless prohibited by law, the cost of audits made in accordance with the provisions of Section .230, OMB Circular A-133 is an allowable charge to federal awards. The charge may be considered a direct cost or an allocated indirect cost, as
450-010-001-h Page 10 of 17 determined in accordance with the provisions of applicable OMB cost principles circulars, Federal Acquisition Regulations (FAR) (48 CFR parts 30 and 31 ) , or other applicable cost principles or regulations. No audit costs may be charged to federal awards when required audits have not been made or have been made but not in accordance with the Circular provisions. 4.1.5 Failure to Perform Audit - In cases of continued inability or unwillingness to have an audit conducted, federal agencies and pass-through entities shall take appropriate action using sanctions such as: (a) Withholding a percentage of federal awards until the audit is completed satisfactorily; (b) Withholding or disallowing overhead costs; (c) Suspending federal awards until the audit is conducted; or (d) Terminating the federal award. 4.1.6 Expenditures Less than the Threshold -Non-Federal entities that expend less than $500,000 per fiscal year in federal awards are exempt from federal single audit requirements for that year, except as noted in Section .215(a), OMB Circular A-133 . However, records must be available for review or audit by appropriate officials of the federal agency, the Department, State of Florida Chief Financial Officer, Florida Auditor General, and the United States Government Accountability Office. If such a recipient elects to have an audit conducted in accordance with the provisions of OMB Circular A-133 , the cost of the audit must be paid from non-federal funds (i.e. recipient funds obtained from sources other than federal entities). Note: The Department may elect to pay the cost associated with such required audits. Entities should notify the district in writing, on official letterhead, if under the $500,000 threshold. 4.1.7 For- Profit Subrecipients -For-profit subrecipients are not bound by OMB Circular A-133 . The Department, as the pass-through entity, is therefore responsible for establishing requirements, as necessary, to ensure compliance by for-profit subrecipients. The contract with for-profit subrecipients describes applicable compliance requirements and responsibilities. Program/Project Managers must verify that for-profit recipients follow these requirements and responsibilities. . 4.1.8 Reporting -Copies of recipient/subrecipient federal financial reporting packages, for audits conducted in accordance with OMB Circular A-133, 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 federal agency that provided the funding. In addition, the recipient/subrecipient shall submit a data collection form which states whether or not the audit was completed in accordance with the Circular and provides information about the recipient’s federal programs and the results of the audit. A senior level representative of the recipient/subrecipient (e.g. controller, director of finance, chief executive officer, or chief financial officer) shall sign a statement to be
450-010-001-h Page 11 of 17 included as part of the form certifying that they have complied with OMB Circular A-133 and that all the information included is accurate and complete. Recipients/subrecipients are required to submit copies of the financial reporting package to the Program/Project Manager or a reference to the recipient’s/subrecipient’s internet website and link where it can be found online. In response to requests by a federal agency or the Department, the auditee is required to submit the appropriate copies of the financial reporting package and, if requested, a copy of any management letters issued by the independent auditor. 4.1.9 Report Retention -OMB Circular A 133 requires the pass-through entity, FDOT, to keep subrecipients’ submissions (i.e. financial reporting package, etc.) on file for three years from the date of receipt. Recipient/subrecipients must also keep one copy of the data collection form and financial reporting package on file for three years from the date of submission to the federal clearinghouse as designated by OMB. However, Department of Financial Services regulations require all documents that involve payment records, federal or state, to be kept on file for five years. 4.2 STATE FINANCIAL ASSISTANCE Section 215.97, F.S., Florida Single Audit Act is applicable when the Department or any state agency provides state financial assistance to a non-state entity to carry out state projects. 4.2.1 Audits Required -Recipients/subrecipients (non-state entities) who expend $500,000 or more in state awards annually are required to have a state single audit in accordance with Section 215.97, F.S. If only one state project is involved in a recipient’s/subrecipient’s fiscal year, they may elect to have only a state project-specific audit for that fiscal year. Note: Pursuant to subsections 215.97(7)(b), (c), and (l), F.S. , regardless of the amount of expenditures, the Department may require additional assurance as a condition in the written agreement to submit an attestation signed by the head of the recipient/subrecipient indicating that the state financial assistance was spent according to the agreement and all pertinent laws and rules. 4.2.2 Audit Costs -Unless prohibited by law, the cost of annual audits, pursuant to the Florida Single Audit Act , is an allowable charge to state projects. Any charge to the state project should be limited to those incremental costs incurred as a result of the audit requirements. The non-state entity allocates such incremental costs to all state projects for which it expended state financial assistance. Audit costs may not be charged to state projects when required audits have not been made or have been made but not in accordance with Section 215.97, F.S. However, specific programs may not allow for the
