2016 Compliance Supplement Joe Bergene, CPA Altman, Rogers & Co.
Overview � Topics to be discussed: � Compliance supplement, what is it and why is it important to be familiar with it. � Overview of the supplement. � Compliance requirements, Part 3 � Internal Controls, Part 6
Compliance Supplement � Tool for auditors, also can be useful for auditees � https://www.whitehouse.gov/sites/default/files/omb/assets/ OMB/circulars/a133_compliance/ 2016/2016_compliance_supplement.pdf � Issued yearly, dated June, almost always late. � Large document, the 2016 one is 1,622 pages long. � Consists of 7 parts and appendices. � Part 1 – Background, Purpose and Applicability � Part 2 – Matrix of Compliance Requirements � Part 3 – Compliance Requirements
Compliance Supplement, continued � Part 4 – Agency Program Requirements � Part 5 – Clusters � Part 6 – Internal Controls � Part 7 – Guidance for Auditing Programs not Included in the Supplement. � Appendices
Matrix of Compliance Requirements � See Exhibit 1 - Matrix � 12 matrix requirements down from 14. � Used to determine which areas are applicable for compliance, just because something is marked as applicable does not mean it has to get audited. Auditors only look at areas that are direct and material.
Compliance Requirements � A. Activities Allowed or Unallowed and B. Allowable Costs/Cost Principles � Old Circular A-87, now 2 CFR Part 200 Subpart E Cost Principles. � http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title02/2cfr200_main_02.tpl � De Minimis Indirect Cost Rate of 10% � C. Cash Management � Advanced payments and reimbursement basis � D. Reserved (Old Davis-Bacon) � E. Eligibility � Specific requirements are unique to each program
Compliance Requirements, continued � F. Equipment and Real Property Management Tangible nonexpendable property having a useful life of more than one year and � acquisition cost of more that $5,000 per unit or threashold determined by entity for F/ S purposes whichever is less. Physical inventory of equipment should be taken at least every two years. � When equipment is sold and has a fair market value of greater than $5,000 the federal � government has right to proportionate amount of the fair market value. � G. Matching Level of Effort, Earmarking Unique to each program � � H. Period of Availability of Federal Funds Costs incurred during funding period � All obligations incurred under the award are required to be liquidated (paid) within 90 � days of the end of the funding period
Compliance Requirements, continued � I. Procurement and Suspension and Debarment (effective 6/30/17) Requirements contained in 2 CFR 200.318 to 200.326 � 200.318 General Procurement Standards ( Exhibit 2) � Must use own documented procurement procedures that conform to applicable � federal laws and standards. Maintain written standards of conduct covering conflicts of interest � 200.319 Competition � Conducted in a manner providing full and open competition. � 200.320 Allowable Methods of Procurement (Exhibit 3) � Micro purchases – up to $3,000 (or $2,000 in the case of construction subject to � Davis Bacon Wages) May be awarded without competitive quotations if entity considers price to be � reasonable. Small Purchases – for purchases over micro level up to simplified acquisition � threshold ($125,000) Simple and informal, price rate or quote must be obtained from an “adequate” � number of qualified sources.
Procurement, continued 200.320 Procurement Methods (over $125,000), Continued � Sealed Bids, publicly solicited and fixed price contract awarded. Preferred � method for construction contracts. Competitive Proposal, either fixed price or cost reimbursement type contract is � awarded. Written method for conduction technical evaluations of the proposals received. � Noncompetitive Proposals (sole source) � Only available from a single source � Public emergency � Authorized by federal government � Competition is determined to be inadequate � Suspension and Debarment � Prohibited from contracting with parties that are suspended or debarred. � http://www.sam.gov/portal/public/SAM/ �
Procurement, continued
Compliance Requirements, continued � J. Program Income Money earned that was directly generated by federal award � Fees for service � Rental of property acquired under federal awards. � May be used in one of three ways, deducted from total allowable costs, added to � federal award, with approval of government may be used as cost sharing or match. � K. Reserved (used to be real property acquisition and relocation assistance) � L. Reporting
Compliance Requirements, continued � M. Subrecipient Monitoring Pass through entity must do the following: � Clearly identify to the subrecipient that the award is a sub award. Identify � applicable requirements that should be followed. Monitor – Needs to be system in place to monitor the activity of the subrecipient in � order to ensure applicable requirements are being followed. � N. Special Tests and Provisions Unique to each federal program �
Part 6 – Internal Controls � See Exhibit 4 – Part 6 of Compliance Supplement � Not just for allowable costs, internal controls should be developed and documented for all compliance areas. � Should be in compliance with Green Book (not a must).
Questions? joeb@altrogco.com 907-274-2992
Recommend
More recommend
