ACT14 Are You Ready for the New Federal Uniform Grant Guidance?

Transcription

1 APRIL 13-16, 2016 ACT14 Are You Ready for the New Federal Uniform Grant Guidance? THESE MATERIALS HAVE BEEN PREPARED BY Vicenti, Lloyd & Stutzman, LLP THEY HAVE NOT BEEN REVIEWED BY STATE CASBO FOR APPROVAL, SO THEREFORE ARE NOT AN OFFICIAL STATEMENT OF CASBO

2 Are You Ready for the New Federal Uniform Grant Guidance? Presented by Tina Henton, CPA and Megan Asselin, CPA Vicenti, Lloyd & Stutzman, LLP April 14, CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 2

3 Federal Compliance Resources 2 CFR 200 Uniform Guidance AKA Omni Circular or Super Circular Compliance Supplement Available at Whitehouse.gov 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 3

4 2 CFR 200 Uniform Guidance Final Regulations issued December 26, 2013 Establishes uniform cost principles and audit requirements for federal awards to nonfederal entities and administrative guidance for all federal grants Goal is to standardize and consolidate eight of the current circulars All provisions will apply uniformly to LEAs, Nonprofits and Institutions of Higher Education 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 4

5 Effective Date Effective for all federal awards and certain funding increments provided on or after December 26, State administered awards July 1, 2015 Procurement rules July 1, 2017 Auditor will need to examine each major program selected to determine which guidance to follow. All school districts that are subject to Single Audit must have the audit conducted under the Uniform Guidance requirements beginning in CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 5

6 Highlights Focus on performance over compliance Outcomes and performance metrics Focus on internal controls Requires written procedures Cash management Allowability Procurement 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 6

7 Highlights Expanded items of cost 55 items of cost are now discussed as to their allowability to federal programs Strengthens requirements for internal controls over salaries and wages while allowing for additional flexibility Methods of procurement Micro purchases Small purchase procedures Sealed bids /competitive proposals Targeting audit requirements on the risk of fraud, waste or abuse Raises single audit threshold 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 7

8 Performance and Outcomes Performance metrics Reports will compare actual accomplishments against the objectives Reasons goals were not met (if applicable) Analysis of cost overruns or savings Financial reporting is still required Generally requires accurate, current and complete disclosure of financial results Supported by source documentation This may present a challenge to audit 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 8

9 Internal Controls Goal Effective control and accountability for: All funds Property and Other assets Must adequately safeguard all assets Use assets solely for authorized purposes 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 9

10 Internal Controls Procedures New requirement for written procedures Cash management Must address minimizing time elapsing between drawdown from G 5 and disbursement (direct awards only) Must describe what method district uses Advance Reimbursement Interest of up to $500 may be retained 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 10

11 Internal Controls Procedures Allowability Procedures cannot just restate the Uniform Guidance Should document steps that the District takes to ensure only allowable costs are charged to a federal grant In general, costs charged to federal programs must be: Necessary, reasonable and allocable Conform with federal law and grant terms and consistent with state policies Consistently treated and in accordance with GAAP Not included as match Adequately documented 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 11

12 Internal Controls Procedures Procurement All entities must have written procurement procedures that reflect applicable Federal, State and local laws. Advice review District procurement/purchasing policies and make sure they are written to the most restrictive guidelines to ensure compliance Effective date of this requirement is July 1, CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 12

13 Cost Principles Cost principles will combine current principles from OMB A 87, A 21 and A 122 Added and changed several items Conferences Food not allowed for Department of Ed grants Travel Charges reasonable and consistent with District written travel policies Must retain documentation that participation is necessary for the program New may charge dependent care costs when charges are incurred above and beyond regular costs that are directly related to conference CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 13

14 Cost Principles Time and Effort Old Requirements A 87 Semi annual certifications After the fact Account for total activity Signed by supervisor or employee Every 6 months PARS required for multi funded New Requirements Charges must be based on records that accurately reflect the work performed Supported by a system of internal control that provides reasonable assurance charges are accurate, allowable and properly allocated Encompass 100% of activities Support the distribution of the employee s salary or wages among specific activities Budget estimates are still allowable but must be adjusted 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 14

15 Procurement Changes Written policies required Includes conflict of interest Methods of vendor selection are Micro purchases acquisition of supplies or services, the aggregate dollar amount of which does not exceed $3,500. Small purchase procedures $3,500 to $150,000 price or rate quotations must be obtained from an adequate sample of qualified sources. Procurement by sealed bids anything over $150, CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 15

16 Audit Changes Audit threshold raised to $750,000 Includes changes to all four steps of the Major Program Determination Deviations for first year audits no longer allowed Criteria for low risk auditee has been revised Reduce minimum coverage from 50% high risk and 25% low risk to 40% high risk and 20% low risk Increase minimum threshold for reporting questioned costs from $10,000 to $25, CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 16

17 Low Risk Auditee Single audits performed on an annual basis Timely submission of the data collection form Unmodified opinions on financial statements and SEFA No material weaknesses No substantial doubt about the auditee s ability to continue as a going concern For Type A programs tested: No material weaknesses Unmodified opinion on compliance No known or questioned costs that exceed 5% of the total federal awards expended CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 17

18 Uniform Guidance Compliance Supplement Testing will be focused on 12 compliance requirements (down from 14) Activities Allowed and Allowable Costs (A & B) Cash Management (C) Eligibility (E) Equipment and Real Property (F) Matching, Level of Effort and Earmarking (G) Period of Performance (H) Procurement and Suspension and Debarment (I) Program income (J) Reporting (L) Subrecipient Monitoring (M) Special Tests and Provisions (N) 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 18

19 Uniform Guidance Compliance Supplement New Compliance Supplement has not been released Latest is July 2015 and includes some basic steps The link below will take you to the main page of all OMB Circulars Scroll to the bottom and look for Circular A 133 Uncertain if the new uniform guidance compliance supplement will be located here since A 133 has been superceded CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 19

20 Contact Info Tina Henton, CPA, Partner (626) , ext. 250 Megan Asselin, CPA, Senior Manger (626) , ext. 309 Visit our website CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 20

21 Questions? 2016 CASBO ANNUAL CONFERENCE & CALFORNIA SCHOOL BUSINESS EXPO 21