single audit resolution
(CT:FIN-495; 07-26-2024)
(Office of Origin: CGFS/FPRA/FAFM)
4 FAM 691 general
(CT:FIN-495; 07-26-2024)
This subchapter states the Department’s policy on the identification and resolution of Single Audit findings, the classification of questioned costs as either allowed or disallowed, and the collection of disallowed questioned costs.
4 fam 692 Authority
(CT:FIN-495; 07-26-2024)
a. Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Super Circular) established guidance for federal agencies who administer federal financial assistance.
b. 2 CFR 200.501 requires non-federal recipients of federal assistance to obtain a single audit or program-specific audit if their federal award expenditures exceed the audit threshold during their fiscal year. The audit threshold is set at federal expenditures of $1,000,000 or more. Recipients are required to submit their reporting package and the data collection to the Federal Audit Clearinghouse (FAC) the earlier of 30 days after receipt of their auditor’s report or nine months after the end of their audit period.
c. 2 CFR 200.512 (c) (3) requires the Reporting Package include:
(1) Financial statements and schedule of expenditures of federal awards.
(2) Summary of schedule of prior audit findings.
(3) Auditor’s report.
(4) Corrective action plan.
4 FAM 693 audit requirements and responsibilities
(CT:FIN-495; 07-26-2024)
The Bureau of the Comptroller and Global Financial Services, Office of Federal Assistance Financial Management (CGFS/FPRA/FAFM) and the program offices (PO) share responsibility for the administration of federal awards and monitoring of the Department’s recipients/subrecipients (recipients) of those awards. The Department of State’s Office of Inspector General (OIG) performs oversight over the quality of single audit reports as well as the Department’s actions to address single audit findings.
4 FAM 693.1 Responsibilities
(CT:FIN-495; 07-26-2024)
The Department has either cognizant audit responsibilities or oversight audit responsibilities for its non-federal recipients required by 2 CFR 200.513.
(1) Non-federal entities expending more than $50 million a year in federal awards must have a cognizant agency for audit. Cognizant is designated to the agency that provides the predominant amount of direct funding to a recipient unless the Office of Management and Budget (OMB) designates a specific cognizant agency for audit.
(2) Recipients who do not have a designated cognizant agency for audit will be assigned an oversight agency for audit.
4 FAM 693.2 CGFS Office of Federal Assistance Financial Management
(CT:FIN-495; 07-26-2024)
The FAFM director is the Department’s Key Management Single Audit Liaison (KMSAL). In this capacity, the FAFM director acts as liaison between federal agencies, the program office, and the recipients. The KMSAL and his/her delegates
(1) Review the FAC to determine whether audit reports are submitted per the requirements of 4 FAM 692.
(2) Review audit reports to identify audit findings, questioned costs, and internal control weaknesses.
(3) Provide notification to and request audit resolution from the appropriate internal and external points of contact (POC).
(4) Coordinate efforts with the internal and external program offices until audit findings are resolved.
(5) Track the status of questioned costs and other audit findings in an annual matrix.
(6) Complete the introduction and sections I and II of the Management Decision Letter (MDL).
(7) Submit the MDL to the PO.
4 FAM 693.3 Program Offices
(CT:FIN-495; 07-26-2024)
Officials within the program offices, including the Grants Officer (GO),
(1) Monitor recipients and coordinate audit resolution efforts with the recipients.
(2) Determine whether audit findings are sustained.
(3) Determine cost allowability and allows or disallows questioned cost per the requirements of 2 CFR 200, Subpart E.
(4) Ensure that recipients take appropriate and timely corrective actions to resolve any additional audit findings.
(5) Complete sections III and IV of the MDL.
(6) Sign and issue the MDL to the recipient.
(7) Provide documentation, including the completed MDL, to CGFS/FAFM at regarding the status and resolution of questioned costs and other audit findings.
(8) Ensure that disallowed questioned costs are repaid per the requirements of 4 FAM 490.
4 FAM 693.4 Office of the Inspector General
(CT:FIN-495; 07-26-2024)
The OIG is the Department’s National Single Audit Coordinator. In this capacity the OIG
(1) In coordination with the Department’s Key Management Audit Liaison, provides technical assistance to non-federal auditors and other individuals.
(2) Meets and communicates with audit partners from CPA firms nationwide, professional organizations (such as the American Institute of Certified Public Accountants (AICPA) and State Boards of Accountancy), Office of Management and Budget (OMB), Government Accountability Office (GAO), the FAC, and single audit coordinators from all other Federal agencies to stay abreast of single audit matters.
(3) Conducts reviews of selected single audit reports to (a) determine whether audit reports prepared are acceptable under the reporting requirements of the Uniform Guidance (4 FAM 692); (b) identify any quality issues that may warrant follow-up audit work and revisions to the reporting package; and (c) identify issues that may require appropriate Department management official attention to include management decisions regarding questioned costs.
(4) Reviews actions taken by Department grants officers and supporting documentation to resolve audit findings identified in selected single audit reports to ensure management issues decisions on single audit recommendations, and that grantees take appropriate and timely corrective actions.
(5) Reports, in their Semiannual Report to the Congress, the status of Department management decisions to resolve selected single audit findings that identified questioned costs.
4 FAM 694 Remedies for Audit Noncompliance
(CT:FIN-495; 07-26-2024)
Recipients unable to have an audit conducted may be sanctioned as follows:
(1) Cash payments will be temporarily withheld pending correction of the deficiency by the recipient or more severe enforcement action by the program office or pass-through entity.
(2) Both use of funds and any applicable matching credit for all or part of the cost of the activity or action not in compliance will be disallowed/denied.
(3) The award will be wholly or partly suspended or terminated.
(4) Suspension or debarment proceedings will be initiated as authorized by law and regulation. The Department will recommend such a proceeding to be initiated for pass-through recipients.
(5) Further awards will be withheld for the project or program.
(6) Other remedies that may be legally available will be taken.
4 FAM 695 THROUGH 699 UNASSIGNED