Child Support Director’s
Association
2007 Training Conference
Administrative Audits
Presentation #107
September 18, 2007
Facilitator
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Lynn Titialii
Deputy Director Administration
San Diego DCSS
Lynn.Titialii@sdcounty.ca.gov
619-578-6130
Presenters
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Linda Dippel
Director
Contra Costa County DCSS
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Bill Davis
Assistant Director
Sacramento DCSS
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ldippel@dcss.cccounty.us
925-957-7300
davisbi@saccounty.net
916-875-7848
Scott Limpach
Chief, Office of Audits and Compliance
California DCSS
scott.limpach@dcss.ca.gov
916-464-3296
Presentation Outline
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Authority and References
Pre-Audit Process
On Site Activity
Post Audit Process
Most Common Findings
Authority and References
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Federal Office of Management and Budget
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OMB Circular A-87
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OMB Circular A-133
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All Circulars available at www.whitehouse.gov/OMB/circulars/index.html
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45 CFR 302.10 and 302.14
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Requires adequate accounting systems to support claims for federal funds.
Requires periodic evaluations of local operations.
LCSA Letter 05-09 – Agreed Upon Procedures of Local Child Support Agency
Administrative Costs
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Agreed Upon Procedures – February 15, 2005
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Materiality Standard in consideration
CSS Letter 04-20 Clarification of Child Support Administrative Claiming and Financial
Policies
CSS Letter 05-05 Clarification of Non-Electronic Data Processing Automation Requests
and Cost Threshold for Equipment Inventories
Criteria Used for Fiscal Audits
Pre-Audit Process
DCSS Planning
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Audit Selection Criteria
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Risk Assessment
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Various input
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Regional Administrators consulted
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Audit Plan
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Timing
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Workload balance
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Final Selection
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Regional Administrators consulted
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Balance against project schedules
Pre-Audit Process
Engagement Planning
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Audit Manager calls LCSA Director
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Schedule an agreeable entrance date
Discuss space needs
Confirm by Engagement letter
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Confirms first day on site
Attachment defines documentation
required
On Site Activity
Entrance Conference
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Meet the Team
 First day on site
 Introductions
 Scope of audit – see Agreed Upon Procedures
 Designation of LCSA contact
Facility tour
 Access to space, phone, etc.
 Use of copy machine
 Receipt of documentation requested in letter
Rules of Engagement
 Whom and how to contact
 Confidentiality
On Site Activity
Audit Work
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Interviews of key staff
Documentation access and review
Communication with LCSA contact
Weekly updates
Discussions of possible findings
“Walk Away” meeting
On Site Activity
Exit Conference
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Scheduled weeks after walk away
Discussion of draft findings
Outline of draft findings, discussion only
Discussion of further information needed
Management Representation Letter
requested
Explain the report process
Provide estimated date for draft report
Post Audit Process
Report Preparation
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Draft report provided to LCSA
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10 days to respond – often extended
Response can:
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Identify further information to refute findings
Dispute findings
Accept findings
This is the time to raise issues!
LCSA response is attached to final
report
Report is made final and distributed
Post Audit Process
Report Response
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Demand letter
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From County Allocation Office
Will describe each finding and process
for resolution
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May require payment
May require Federal report revision
May be a process change
LCSA Responsibilities
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Respond in a timely manner
Post-Audit Process
Corrective Action
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LCSA has an obligation to resolve
findings identified in final report
State will verify compliance after
reasonable time
Most Common Findings
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Cash v. accrual basis
Programs receiving federal funds are required to operate on a cash accounting basis. Cash
claiming requires that expenditures be reported in the quarter in which they are purchased. No
carry-forward of unobligated funds.
Unabated Interest
Interest earned on child support funds and child support collections must be abated on the CS
356 report.
Controls over Inventory of Equipment
Physical inventory performed at least once every two years. Property Ledger to record
equipment information as follows:
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Acquisition date.
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Equipment description.
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Serial Number, model number, or other Id. number.
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Funding Source.
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Equipment cost or other basis of valuation.
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Who holds title.
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Percent of federal, state and county participation in the cost of the property.
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Location.
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Disposition data, including the date of disposal and sales price.
Unallowable Costs – as defined in A-133 and A-87
Cost must be necessary and reasonable for proper and efficient performance and administration
of federal awards. Costs of goods or services for personal use of the government unit’s
employees are unallowable regardless of whether the cost is reported as taxable income to the
employees.