DECD: Audit - Frequently Asked Questions

Audit Types – Frequently Asked Questions – FAQ
 
 
 
 
 
Audits - Frequently Asked Questions - FAQ
 
  1. Is my organization required to conduct a (Federal or State) Single Audit?
  2. What if my organization did not meet the threshold of expenditures during our fiscal year?
  3. How do I use the DECD Audit Guide as a Supplement to my Federal and/or State Single Audit?
  4. What is required to be submitted for a Single Audit?
  5. Does DECD require a complete reporting package mailed to DECD and when is it due?
  6. Where can I find more detailed information about the Single Audit Process?
  1. When is a Program-specific audit required of a DECD program?
  2. What must a DECD Program-specific audit include according to the DECD Audit Guide?
  3. When is a DECD Program-specific audit due to DECD and where should it be sent?
  1. What is an Agreed-Upon Procedure Report on DECD Grant/Loan Contracts that is found in Appendix E of the DECD Audit Guide and when is it applicable?
  1. I have been contracted to do an employment audit of a company in accordance with the DECD Audit Guide.  What is required?
  1. What audit guidance is available for the Housing Development Cost Certifications required by certain HUD Programs?
 
 
A. Single Audits:
 
  • Federal Single Audit:  According to Subpart B – Audits §___ .200 (a) of the OMB Circular A-133, “Non-Federal entities that expend $300,000 ($500,000 for fiscal years ending after December 31, 2003) or more in the organization’s fiscal year in Federal awards shall have a single or program-specific audit conducted for that year in accordance with the provisions of this part.  Guidance on determining Federal awards expended is provided in §___ .205.” 
    • Non-Federal entity is defined as a state, local government, university, or non-profit organization.  For-profit entities are not subject to Federal Single Audits. 
  • State Single Audit:  According to Connecticut General Statutes (CGS) Sec. 4-231, "When single audits required or program-specific audits. (a) (1) Each nonstate entity which expends a total amount of state financial assistance equal to or in excess of one hundred thousand dollars ($100,000) in any fiscal year of such nonstate entity beginning on or after July 1, 1998, shall have either a single audit or a program-specific audit made for such fiscal year, in accordance with the provisions of subdivision (2) or (3) of this subsection and the requirements adopted pursuant to section 4-236.”
    • Non-state entity is defined as a municipality, tourism district, audited agency or non-profit agency.  For-profit entities are not subject to State Single Audits.
 
  • Federal Single Audit:  If a Non-Federal entity received a Federal award passed through the DECD, but expended total Federal awards less than the threshold, notify the DECD’s Office of Financial Review - Audit Section in writing of the exemption from the Federal Single Audit Act’s audit requirements using the Certification of Intent to File form.
  • State Single Audit:  If a Non-state entity expended total state financial assistance less than the threshold, notify your designated cognizant agency for the State Single audit in writing of the exemption from the State Single Audit Act’s audit requirements using a State Single Audit Exemption Notification form located on OPM’s website.
 
  • Include a cumulative statement of program cost for all DECD grant/loan contracts as either a financial statement, supplemental schedule or as a note to the financial statements.  The inclusion of this statement will facilitate the financial closeout of the DECD program.
  • Use the financial statement format outlined in the matrix in Exhibit 4-2, of the Audit guide and
  • Use the DECD compliance supplement called “Housing Administration Fund Programs” (not available in the Single Audit Supplements) to test for compliance over the following State Financed Housing Programs that have ongoing compliance requirements:  Moderate Rental, Affordable, Elderly, and Congregate Housing (found in Appendix A of the DECD Audit Guide).
 
  • Federal Single Audit: According to §___ .320 of the OMB Circular A-133, the following must be submitted:
    a) A completed Form SF-SAC as described in §___ .320 of the OMB Circular A-133.  
    b) Complete copy of the Single Audit reporting package as described in §___ .320 of the OMB Circular A-133 including:
      1. Financial Statements
      2. Schedule of Expenditures of Federal Awards
      3. Summary Schedule of Prior Audit Findings
      4. Opinion on Financial Statements
      5. Report on Internal Control
      6. Report on Compliance
      7. Schedule of Findings and Questioned Costs
      8. Corrective Action Plan (if applicable)
      9. Opinion or Disclaimer of Opinion on Schedule of Expenditures of Federal Awards
  • State Single Audit:  In accordance with Section 4-236-23(a) of the Regulations of Connecticut State Agencies, a complete Single Audit reporting package including:
      1. Opinion on Financial Statements and Opinion or Disclaimer of Opinion on Schedule of Expenditures of State Financial Assistance
      2. Report on Internal Control and Reports on Compliance (financial statements)
      3. Report on Internal Control and Report on Compliance (major programs)
      4. Schedule of Expenditures of State Financial Assistance
      5. Schedule of Findings and Questioned Costs
      6. Corrective Action Plan (if applicable)
      7. Management Letter (if applicable)
 
  • Federal Single Audit:  Yes, DECD requires a copy of the reporting package for DECD Federal Awards 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 cognizant or oversight agency for audit.  Please send the reporting package to DECD electronically (in PDF format) to the Office of Financial Review – Audit Section: Steve.Pons@ct.gov.
  • State Single Audit: Yes, DECD requires a copy of the reporting package for DECD State Financial Assistance be submitted within the earlier of 30 days after receipt of the auditor’s report(s) or six months after the end of the audit period unless a longer period is agreed to in advance by the cognizant agency for audit. Please send the reporting package electronically (in PDF format) to the Office of Financial Review – Audit Section: Steve.Pons@ct.gov.
 
 
  • Federal Single Audit: The Federal Audit Clearinghouse (FAC) operates on behalf of the U.S. Office of Management and Budget (OMB).  It provides reference information about the Federal Single Audit Process and OMB Circular A-133 Compliance Supplement.
  • State Single Audit:  Connecticut’s Office of Policy and Management (OPM) - Intergovernmental Policy Division provides technical assistance for the State Single Audit Act (Chapter 55b of the Connecticut General Statutes) including the Municipal Auditing Act (Chapter 111 of the Connecticut General Statutes).  OPM publishes the State Single Audit Compliance Supplement,  a publication which assists independent auditors and state financial assistance recipients in completing the compliance testing requirements of the State Single Audit.
 
B. Program-Specific Audits:
 
  • When the Single Audit threshold of expenditures is met, an auditee under certain circumstances may elect to have a program-specific audit conducted instead of a Single Audit.  
»To determine if a Non-Federal entity qualifies for this election, OMB Circular A-133 should be consulted for specific guidance relative to this option for Federal Awards.
»To determine if a Non-state entity qualifies for this election, Sections 4-230 through 4-236 of the Connecticut General Statutes and applicable regulations should be consulted for specific guidance relative to this option for State Financial Assistance. 
  • When a State Statute, Program Regulation or DECD Contract requires program-specific or project audit coverage and the Auditee is not subject to a State and/or Federal Single Audit, a Program-specific audit is required in accordance with the DECD Audit Guide or a Federal Program-specific audit guide if applicable.
 
  • Entire program period and all income and expenditures related to the program.
  • Independent Auditors Report on the Financial Statements and Supplemental Schedules
  • Financial Statements as outlined in the Financial Statement Matrix, Exhibit 4-2, of the Audit Guide
  • Report on Internal Control over Financial Reporting and on Compliance Based on an Audit of Financial Statements performed in Accordance with Government Auditing Standards
  • Schedule of Findings and Questioned Costs
  • Status of Prior Audit Findings
  • Corrective Action Plan (if applicable)
  • Report on Illegal Acts (issued only when illegal acts are detected)
 

     The audit due date is defined by the DECD Grant/Loan contract.
  • If the auditee is a For-profit entity, the DECD Grant/Loan contract will specify the audit filing due date, as either 60 or 90 days after the project completion date.  The completion date refers to the DECD approved budget period “end date” indicated on the latest DECD approved financing plan and budget for the project.   For questions or requests for extensions, contact the Office of Financial Review – Audit Section at 860-270-8209.
  • If the auditee is a Non-state entity or Non-Federal entity eligible to file a Project-specific audit instead of a Single audit under State or Federal Single Audit guidelines, the due date will follow the applicable requirements allowed under each. 
  • Please send the reporting package to DECD either electronically (in PDF format) to the Office of Financial Review – Audit Section: Steve.Pons@ct.gov or mail to:
   Office of Financial Review – Audit Section
   State Dept. of Economic and Community Development
   450 Columbus Boulevard
   Hartford, CT 06103
 
 
C. Agreed-Upon Procedures (Grant/Loan Contracts):
 
  • An Agreed-Upon Procedure Report is an alternative to a Program-specific audit for certain Grant/Loan contracts.  It requires a prior written agreement with the DECD’s Office of Financial Review – Audit Section.  The request must be made in advance using the Request Letter found in Appendix E of the DECD Audit Guide .  For example:
    • A for-profit auditee that received Manufacturing Assistance Act (MAA) Funds whose contract requires that a project audit be filed with DECD within 90 days of project completion; and who is not subject to other State or Federal Audit requirements.
    • A for-profit auditee that received a Federal Award whose contract requires that a project audit/audited cost certification be filed with DECD within 90 days of completion; and who is not subject to other State or Federal Audit requirements.
 
D. Agreed-Upon Procedures/Job Audit:
 
  • Appendix F of the Audit Guide contains Detailed Job Retention and Creation Audit procedures to be completed by Independent Public Accountants. The appendix includes a sample Independent Accountant’s Report on Applying Agreed-Upon Procedures outlined in Appendix F.  This report should be filed with DECD’s Office of Financial Review - Audit Section and with the Company.
 
E.  Housing Development Cost Certifications:
 
  • The HUD Handbook 2000.4, REV-2, Audit Guide for Audits of HUD Programs (and its subsequent revisions) is authorized or required for certain HUD Program development cost certifications and/operational audits. Refer to the HUD Handbook, including Chapter 5, Development Cost Certification Audit Guidance.  It is intended for use by for-profit mortgagors to provide audit guidance for the audit of development cost certifications of certain HUD programs.  However, as stated in the Handbook, this chapter can also be used to provide audit guidance to not-for-profit mortgagors for their audits of development cost certifications as provided for under OMB Circular A-133, paragraph 235(a), program-specific audit guide available.
 
For Technical Assistance, please contact:
Office of Financial Review – Audit Section at 860-500-2409 or 860-500-2484.