Thomson Reuters published a white paper on some of the most common issues encountered in single audits for the year ended June 30, 2016. The top lessons learned from the white paper are as follows:
- Insufficient Internal Control and Undocumented Policies and Procedures – Uniform Guidance emphasized the importance of internal control, and as a result, the lack of formal documented policies and procedures resulted in findings due to lack of documentation of those items and the associated controls.
- Incorrect Administrative Requirements and Cost Principles – Due to confusion in understanding the effective dates of when administrative and cost principles needed to be adopted, some organizations complied with incorrect administrative and/or cost principles. Entities that have awards that were made prior to December 24, 2014 are reminded that existing administrative and cost circulars apply, and that they should not follow the principles of Uniform Guidance.
- Failure to Comply With Subrecipient Monitoring Requirements – This is an area in which there were several findings related to not properly complying with the requirements to monitor the subrecipients as outlined in 2 CFR 200.331. If your organization provides funds to subrecipients, you need to ensure that you are following the requirements of 2 CFR 200.331.
- Missing Procurement Documentation During the Grace Period – If your entity had not yet adopted the new procurement standards under Uniform Guidance during the grace period, you need to document that in your records; otherwise, it will result in a reportable finding.
- Corrective Action Plan and Summary Schedule of Prior Audit Findings – If you have findings, you need to make sure that each finding includes a corrective action plan and that the findings include all of the required elements, and that the findings are in the appropriate format.
- Schedule of Expenditures of Federal Awards (SEFA) Presentation and Disclosure Errors – Ensure that the SEFA includes all of the required elements, including, but not limited to, the period of time that the schedule covers, the award by federal agency and the total awards expended. In addition, ensure that any required footnotes, such as the whether or not the entity uses the 10% de minimis indirect rate, the balance of any outstanding loan/loan guarantee balances and the amount(s) provided to subrecipients, are included.
You can download a copy of the full white paper by clicking here.
In addition, as a reminder, all audit reports that are submitted to the federal government’s audit clearinghouse are now searchable. As a result, it is now easier for funding agencies and others to search for financial statements and identify or monitor for any issues or problems with current or potential grant recipients.