Department of Financial Services · Chapter 69I-5, F. A. C., State Financial Assistance 2019 Rule...
Transcript of Department of Financial Services · Chapter 69I-5, F. A. C., State Financial Assistance 2019 Rule...
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Department of Financial Services
➢ Introduction of Instructors
➢ Housekeeping
➢ Class Material
➢ Icebreaker
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Training Agenda
➢ FSAA Background
➢ SFA Flowchart, Checklists, Forms
➢ Exercise #1 – State Project Determination
➢ Exercise #2 – Recipient/Vendor Determination
➢ State Projects Compliance Supplement Overview
➢ 10 Compliance Requirements
➢ Exercise #3 – Compliance Supplement Form
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Authority
➢ Section 215.97, F.S., “Florida Single Audit Act”
➢ Enacted in 1998; effective July 1, 2000
➢ Mirrors Federal Single Audit Act
➢ Applies to local governments, non-profits, and for-profit organizations
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Amended Rule
Chapter 69I-5, F. A. C., State Financial Assistance
➢ 2019 Rule Amendment
➢ Florida Single Audit Act forms revised
➢ 215.97 FS & Federal 2 CFR Part 200 updated
➢ FSAA web page, Links/Forms tab provided
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Key Terms
➢ State Resources
➢ State Program
➢ Vendor
➢ State Awarding Agency
➢ State Project Compliance Supplement
➢ State Financial Assistance
➢ State Project
➢ Recipient
➢ State Single Audit
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Types of Financial Assistance
GrantsLoans
Grants
Insurance
Loan Guarantees
Property
Direct AppropriationsTax Refunds
Tax Credits
Cooperative Agreements
Food Commodities
Investments
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Background
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Requires recipients/subrecipients to have the single audit if they receive state financial assistance and expend $750,000 (effective 7/1/2016) or more during the nonstate entity’s fiscal year.
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Background
Exempt Organizations
➢ District School Boards
➢ Charter Schools
➢ Community Colleges
➢ State Universities
➢ Contractors operating state-owned facilities
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Background
Mirrors Federal Single Audit Act, some differences:
FSAA FEDERAL SINGLE AUDIT
10 Compliance Requirements 14 Compliance Requirements
For-profits Included For-profit Exempted
Tax Credit/Refunds= SFA Tax Credits/Refunds: N/A
Recipient/Vendor Checklist Preponderance of Evidence
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The Purpose of the FSAA
➢ To provide uniform state audit requirements
➢ To ensure sound financial management
➢ To increase audit economy and efficiency
➢ To verify adequate monitoring by state agencies
➢ To identify state financial assistance in state and
non-state entity’s accounting records
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Before Florida Single Audit
Reed Foundation for Kids, Inc.
State GrantsAgency Grant No.DCF 06-ADOPHHS EMS09
Federal Single Audit
Annual financial statements
Federal programs – CFDA #93.558, 93.556
Schedule of Expenditures of Federal Awards
1 audit
1 audit
1 audit
= 3 Audits!!
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After Florida Single Audit
Reed Foundation for Kids, Inc.
A. Annual financial statements
B. Federal financial assistance
CFDA #93.556
CFDA #93.958
C. State financial assistanceCSFA #60.017 – Grant #EMS09
CSFA #64.006 – Grant # 06-ADOP
D. Schedule of Expenditures of Federal Awards and State Financial Assistance (Combined)
1 Single Audit!
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Financial Reporting Packages
1. Include Financial statements
2. Furnish auditor reports (internal controls, project compliance)
3. Incorporate a management letter
4. Provide auditee's written responses or corrective action plan
5. Review correspondence on follow-up of prior years' corrective actions taken
6. Present a schedule of Expenditures of State Financial Assistance
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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND
STATE FINANCIAL ASSISTANCE
Federal / State Agency, Pass through entity, Federal Program / State Project
CFDACSFANo.
Contract/ GrantNo. Expenditures
FEDERAL AWARDS
U.S. Department of Agriculture
Passed through Florida Department of Education
National School Lunch Program 10.555 08-A6D4
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513,135
Total expenditures of federal awards 513,135
STATE FINANCIAL ASSISTANCE
Florida Dept. of Children and Families
Children’s Mental Health Juvenile Restoration 60.049 LH638 5,106,184
Florida Dept. of Juvenile Justice
Vocational Training Services 80.013 L8G02 1,806,361
Delinquency Prevention 80.011 DP544 3,997,639
Total expenditures of state financial assistance 10,910,184
Total expenditures of federal awards and state financial assistance $ 11,423,319
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Key Players
Department of Financial Services
Auditor General
Independent (CPAs)
Coordinating Agency
State Agencies
Recipients/ Subrecipients
ACCOUNTABILITY
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Department of Financial Services
➢ Administers Florida Single Audit Act
➢ Establish new rules
➢ Maintains Catalog & Compliance Supplement
➢ Reviews/audits state financial assistance
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State Awarding Agencies
➢ Identify state projects
➢ Determine recipient and vendor relationships
➢ Provide recipient information on FSAA
➢ Review financial reporting packages
➢ Determine the state coordinating agency
➢ Identify State Financial Assistance (SFA) in state accounting records
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State Awarding Agencies
Annual Agency Certification
➢ Review information in Catalog and the Supplement for accuracy and completeness
➢ Notify DFS of any additions, deletions, or revisions to state projects for the previous year
➢ Submit updates to the Catalog by September 1st
See “Links/Forms” on FSAA website for more info
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State Awarding Agencies
State Project Updates
Agencies are encouraged to submit updates for the new fiscal year as soon as possible.
➢ New projects
➢ Deleted projects
➢ Project title/other changes
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Coordinating Agency
➢ Reviews recipient audit reports to identify findings which affect all state projects
➢ Determines whether appropriate corrective action has been taken
➢ Notifies affected state agencies of recipient actions
Example: Internal control audit findings
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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE
FINANCIAL ASSISTANCE
Federal / State Agency, Pass through entity, Federal Program / State Project
CFDACSFANo.
Contract/ GrantNo. Expenditures
FEDERAL AWARDS
U.S. Department of Agriculture
Passed through Florida Department of Education
National School Lunch Program 10.555 08-A6D4
$
513,135
Total expenditures of federal awards 513,135
STATE FINANCIAL ASSISTANCE
Florida Dept. of Children & Families
Children’s Mental Health Juvenile Restoration 60.049 LH638 5,106,184
Florida Dept. of Juvenile Justice
Vocational Training Services 80.013 L8G02 1,806,361
Delinquency Prevention 80.011 DP544 3,997,639
Total expenditures of state financial assistance 10,910,184
Total expenditures of federal awards and state financial assistance $ 11,423,319
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SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND STATE
FINANCIAL ASSISTANCE
Federal / State Agency, Pass through entity, Federal Program / State Project
CFDACSFANo.
Contract/ GrantNo. Expenditures
FEDERAL AWARDS
U.S. Department of Agriculture
Passed through Florida Department of Education
National School Lunch Program 10.555 08-A6D4
$
513,135
Total expenditures of federal awards 513,135
STATE FINANCIAL ASSISTANCE
Florida Dept. of Children & Families
Children’s Mental Health Juvenile Restoration 60.049 LH638 5,106,184
Florida Dept. of Juvenile Justice
Vocational Training Services 80.013 L8G02 1,806,361
Delinquency Prevention 80.011 DP544 3,997,639
Total expenditures of state financial assistance 10,910,184
Total expenditures of federal awards and state financial assistance $ 11,423,319
5,804,000
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Recipients/Subrecipients
➢ Identify SFA in accounting records
➢ Arrange for state single audits
➢ Provide the FSAA information for the subrecipient
➢ Review the financial reporting package of the subrecipient
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Independent Auditors
➢ Perform single audits pursuant to Auditor General rules,
including an evaluation of internal controls
➢ Determine if each major state project complies with
Compliance Supplement requirements
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Auditor General
➢ Establishes audit standards and rules
➢ Provides technical assistance
➢ Performs audits and reviews
➢ Reviews financial reporting packages
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State Financial Assistance Flowchart
Research GAA,
Statutes, other
sources
State Project Determination
State Project
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Identifying State Projects
General Appropriations Act (GAA)
➢ Line item appropriations
➢ Grant and aid categories
➢ Proviso language (special purpose)
Supplemental Appropriations
➢ Analyze bills, clarify legislative intent
▪ Florida Statutes ▪ Agreements▪ Administrative Code
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Exercise 1: State Project Determination Checklist
Directions: Analyze the statute (pg. 2) and determine whether the state program is a state project by completing the checklist (pg. 3).
Section 381.989, F.S. – Health Education Centers
NOTE: The first page of the checklist is already completed. For this exercise, the program is not being funded by federal, state matching or maintenance of effort.
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State Financial Assistance Flowchart
Agency Requests New
CSFA for State Project
State Project
Recipient
vs. Vendor
Determination
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Recipients vs. Vendors
• Are served by the program
• Have accountability of funds
• May make programmatic decisions
• May have a match or MOE
• Must return residual funds
• Are required to have the State Single Audit if threshold is met
Recipients
• Are providing the program
• Do not have accountability of funds
• Do not make programmatic decisions
• Do not have a match or MOE
• May keep funds as profit
• Are not required to have the State Single Audit
Vendors
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Exercise 2: Recipient vs. Vendor Determination Checklist
Directions: Complete PART B of the checklist (pg. 8) for each contract.
#LUHECR9 – Lee University, Knight School of Medicine (pg. 5)
#FHCCV9 – South Florida Advertising, Inc. (pg. 6)
NOTE: Both contracts are under the Health Education Centers program (s. 381.989, F.S.), which was determined to be a state project in
Exercise #2. No federal, state matching, or Maintenance of Effort (MOE) funds are involved.
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Recipient and Subrecipient Requirements
Required to have combined federal and state single audit, if both thresholds are met
Required to return unobligated funds to the State, unlessauthorized to retain funds
Required to comply with the provisions of CFO Memo #3, (2014-2015)
Required to include standard contract language per CFO Memo #4 provisions in Subrecipient agreements
JEOPARDY GAME
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State Compliance Supplement
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State Project Compliance Supplement
➢ Acts as a Liaison
➢ Saves time
➢ Serves as notification
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State Project Compliance Supplement
➢ Part One: Background, Applicability, & Overview
➢ Part Two: Matrix of Compliance Requirements
➢ Part Three: Compliance Requirements
➢ Part Four: State Project Compliance Requirements
➢ Part Five: Internal Controls
➢ Part Six: Guidance for Auditing Projects Not Included in the Compliance Supplement
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Part One: Background
➢ If a state project is selected for audit, use of the Supplement is highly recommended.
➢ Adherence to the Supplement satisfies the audit requirements of s. 215.97, F.S.
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Part Two: Matrix of Compliance Requirements2017-2018
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Part Three: Compliance Requirements
➢ The 10 compliance requirements are found within the Florida Single Audit Act, per 215.97 F.S.
➢ The procedures for the audit are general and outline compliance requirements that may be tested.
➢ The judgment of the auditor is necessary to determine which compliance requirements will be tested.
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Part Four: State Project Compliance Requirements
➢ The compliance supplement provides objectives, procedures, and requirements specific to an individual project.
➢ The compliance supplement outlines the requirements necessary to complete audits of state financial assistance.
➢ The compliance supplement is mandatory. If it is not submitted, the Department of Financial Services will require an explanation.
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Part Four: State Project Compliance Requirements
598 State Projects
Only 521 have State Project Compliance Supplements 87%
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Part Five: Internal Controls
The compliance supplement provides objectives, procedures and compliance requirements specific to an individual project.
➢ It outlines the requirements necessary to complete audits of state financial assistance.
➢ It is mandatory. If not submitted, the Department of Financial Services will require an explanation.
➢ It provides objectives, procedures and compliance requirements specific to an individual project.
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Part Six: Guidance for Auditing Projects Not in the Compliance Supplement
➢ Projects without a supplement are forwarded to part six
➢ Part six provides limited project information for the CPA
➢ The State Agency determines the success criteria of the state project
➢ The completion of part six provides the CPA information to accurately assess the project
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Preparing the Compliance Supplement Form
(Part Four)
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General Information
➢ State Agency
➢ CSFA Number
➢ Project Title
➢ Completed by
➢ Phone/E-mail
➢ IG/AD Review
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Program Information
Program Objectives
Explains what will be accomplished in the program
Program Procedures
Describes how state financial assistance is awarded
➢ Includes references
➢ Provides other relevant information about the operation or administration of the state project
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Compliance Requirements
A. Activities Allowed or Unallowed
B. Allowable Costs
C. Cash Management
D. Eligibility
E. Equipment & Real Property Management
F. Matching
G. Period of Availability of State Funds
H. Reporting
I. Subrecipient Monitoring
J. Special Tests & Provisions
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Compliance Requirements
➢ Requirements are unique to each state project and are found in laws, rules, and provisions of contract or grant agreements
➢ DFS considers these to apply to each project:
A. Activities Allowed or Unallowed
B. Allowable Costs
G. Period of Availability of State Funds
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A. Activities Allowed or Unallowed
Examples
Allowable activities include health assessments, computer training and animal therapy
Unallowable activities include entertainment activities and meals
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B. Allowable Costs
➢ Allowable costs require that expressed or implied authority must be provided in order to expend state funds (AG Opinion 078-101)
➢ Allowable costs require that recipients and sub-recipients must
comply with the Reference Guide for State Expenditures, even if
the agreement is awarded on a fixed-price basis or competitively
procured under chapter 287, F.S.
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B. Allowable Costs
Example
Allowable Costs:
1. Travel expenditures
2. Speaker fees
3. Informational materials
Unallowable Costs:
1. Promotional items, refreshments, greeting cards
2. Travel costs unrelated to outreach activities
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C. Cash Management
Refers to cash advances, not a method of payment
➢ Agreements with advances may contain clause permitting recipients to temporarily invest proceeds
➢ Interest income returned to State or applied against agency’s obligation to pay the contract amount
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C. Cash Management
Example
Interest earned on cash advances provided by the State shall be returned to the department.
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D. Eligibility
Specifies the criteria for determining eligibility of:
1. Beneficiaries (individuals/groups of individuals);
2. Subrecipients that can participate in the project and the amounts for which they qualify
NOTE: Does not refer to recipient eligibility criteria (non-profits, for-profits, local governments)
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D. Eligibility
Examples
Clients between the ages of 3 and 17 attending the Stevens Educational Center are eligible for services.
Eligible subrecipients are for-profit, private businesses that employ less than 100 people with a revenue stream of less than $1 million.
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E. Equipment and Real Property Management
Specifies the use, management, and disposition of equipment and
real property
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E. Equipment and Real Property Management
Examples
➢ Upon purchase, laptop computers become the local
government’s property. Maintenance costs are the responsibility
of the local government.
➢ Non-expendable equipment costing $1,000 or more is subject to
agency property reporting requirements for the contract period.
Upon project completion, such equipment shall return to the
agency.
F.S. 273.02
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F. Matching
Specifies Matching Requirements:
➢ How match is computed
➢ How in-kind contributions are valued
➢ Types of expenditures or in-kind contributions that can be used to meet the match
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F. Matching
Example
A 10% local match is required
Eligible match sources include: Cash and in-kind service costs
Land value acquired under other state or federal grant land acquisition programs is ineligible
(Rule 69I-5.005 F.A.C.)
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G. Period of Availability of State Funds
Specifies the time period during which nonstate entity may obligate/expend state financial assistance
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G. Period of Availability of State Funds
Examples
➢ State Fiscal Year
➢ Contract/Grant Agreement Period
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H. Reporting
Verification of data contained in reports required of recipients and subrecipients
Types of Reports
➢ Financial – Revenue/expenditure reports
➢ Performance – Benchmarks
➢ Activity – Number of clients served
➢ Special Reports – Program-specific
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H. Reporting
Example
Recipient shall maintain individual participant files and attendance rosters to support the data in the annual Fiscal and Participant Report, which shall include:
➢ Actual number of enrollments➢ Actual number of participants successfully
completing each session➢ Total project expenditures (by expense category)
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I. Subrecipient Monitoring
Verify that the recipient/subrecipient monitored subrecipients per project requirements
➢ On-site visits
➢ Limited-scope audits
➢ Expenditure review
➢ Review subrecipient audit reports
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I. Subrecipient Monitoring
Example
Recipient shall conduct 1 on-site review of each subrecipient in the grant period, which includes:
➢ Programmatic review of all required contract deliverables and performance measures
➢ Expenditure review to ensure that grant funds were spent only for allowable costs
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J. Special Tests and Provisions
Types of Special Tests:
➢ Related-party transactions
➢ Professional qualifications
➢ State procurement guidelines
➢ Recipient vs. Vendor Checklist
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J. Special Tests and Provisions
Example
Compliance Requirement:
Corporations represented on the Board cannot receive over 65% of the total dollar amount of all contracts issued
Audit Objective:
Determine if recipient complied with laws for awarding contracts to corporations represented on the Board
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Exercise 3: Identifying Compliance Requirements
Identifying Compliance Requirements
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Updates to the Catalog & Compliance Supplement are
welcome throughout the year!
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State Project Compliance Supplement
➢ Section 215.97, F.S.
➢ DFS Rule 69I-5, F.A.C.
➢ FSAA website:
https://apps.fldfs.com/fsaa
➢ Auditor General Q&A:
http://www.myflorida.com/audgen/pages/flsaa.htm
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