2016 Compliance Supplement Joe Bergene, CPA Altman, Rogers & - - PowerPoint PPT Presentation

Joe Bergene, CPA Altman, Rogers & Co. 2016 Compliance Supplement

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
• rder 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