Welcome!
Florida Single Audit
Act Training
Department of Financial Services
Bureau of auditing
Mark Merry, Bureau Chief
Introductions
1.
Florida Single Audit Act Summary
2.
SFA Flowchart, Checklists, Forms
3.
Exercise #1 – State Project Determination
4.
Exercise #2 – Recipient/Vendor Determination
5.
State Projects Compliance Supplement Overview
6.
10 Compliance Requirements
7.
Exercise #3 – Compliance Supplement Form
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
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
key terms
State resources
State financial assistance
State program
State project
Vendor
Recipient
State awarding agency
State single audit
State Project Compliance Supplement
Types of financial
Assistance
Grants
Loans
Tax
Credits
Insurance
Property
Loan
Guarantees
Tax
Refunds
Food
Commodities
Investments
Direct Appropriations
Cooperative Agreements
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Requires recipients/subrecipients to have state
single audit, if $500,000 or more in state financial
assistance is expended during the non-state
entity’s fiscal year.
Florida Single Audit
Act
Exempt Organizations
District School Boards
Charter Schools
Community Colleges
State Universities
Contractors operating state-owned facilities
Florida Single Audit
Act
 Mirrors Federal Single Audit Act, some differences:
FSAA
Federal Single Audit
 10 compliance requirements
 14 Compliance Requirements
 Includes For-Profits
 For-Profits Exempted
 Tax Credits/Refunds = SFA
 Tax Credits/Refunds: N/A
 Recipient/Vendor Checklist
 Preponderance of Evidence
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Purpose
1. Uniform state audit requirements
2. Sound financial management
3. Audit economy and efficiency
4. Adequate monitoring by state agencies
5. Identify state financial assistance in state and
non-state entity’s accounting records
Knight Foundation for Kids, Inc.
State Grants
Agency
DCF
Health
AWI
Grant No.
06-ADOP
EMS09
RWB-HC-3
1 audit
1 audit
1 audit
Federal Single Audit
Annual financial statements
Federal programs – CFDA #15.206, 93.556
Schedule of Expenditures of Federal Awards
1 audit
= 4 Audits!!
Knight Foundation for Kids, Inc.
A. Annual financial statements
B. Federal financial assistance
CFDA #93.556
CFDA #93.957
1 Single Audit!
C. State financial assistance
CSFA #60.017 – Grant #EMS09
CSFA #64.006 – Grant # 06-ADOP
CSFA #75.012 – Grant #RWB-HC-3
D. Schedule of Expenditures of Federal Awards and State
Financial Assistance (Combined)
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1. Financial statements
2. Auditor reports (internal controls, project
compliance)
3. Management letter
4. Auditee's written responses or corrective action plan
5. Correspondence on follow-up of prior years'
corrective actions taken
6. Schedule of Expenditures of State Financial
Assistance
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND
STATE FINANCIAL ASSISTANCE
Federal / State Agency,
Pass through entity,
Federal Program / State Project
CFDA
CSFA
No.
Contract/
Grant
No.
10.555
08-A6D4
Expenditures
FEDERAL AWARDS
U.S. Department of Agriculture
Passed through Florida Department of Education
National School Lunch Program
$
Total expenditures of federal awards
513,135
513,135
STATE FINANCIAL ASSISTANCE
Florida Dept. of Children and Families
Children’s Mental Health Juvenile Restoration
60.049
Florida Dept. of Juvenile Justice
Vocational Training Services
Delinquency Prevention
LH638
5,106,184
80.013
L8G02
1,806,361
80.011
DP544
Total expenditures of state financial assistance
Total expenditures of federal awards and state financial assistance
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3,997,639
10,910,184
$ 11,323,319
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Search by:
State Agency
Subject
Applicant Type
Keyword
CSFA #
DFS
Auditor
General
State
Agencies
ACCOUNTABILITY
-
Coordinating
Agency
Independent
(CPAs)
Recipients/
Subrecipients
 Administers Florida Single Audit Act
 Responsible for establishing rules
 Maintains Catalog & Compliance Supplement
 Reviews/audits state financial assistance
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Identify state projects
Determine recipient and vendor
relationships
Provide recipient information on FSAA
Review financial reporting packages
Determine the state coordinating agency
Identify SFA in state accounting records
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.
See “Links/Forms” on FSAA website for more info.
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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 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
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND
FINANCIAL ASSISTANCE
Federal / State Agency,
Pass through entity,
Federal Program / State Project
CFDA
CSFA
No.
Contract/
Grant
No.
STATE
Expenditures
FEDERAL AWARDS
U.S. Department of Agriculture
Passed through Florida Department of Education
National School Lunch Program
$
10.555
08-A6D4
Total expenditures of federal awards
513,135
513,135
STATE FINANCIAL ASSISTANCE
Florida Dept. of Children & Families $5,106,184
Children’s Mental Health Juvenile Restoration
60.049
Florida Dept. of Juvenile Justice
Vocational Training Services
Delinquency Prevention
$5,804,000
LH638
5,106,184
80.013
L8G02
1,806,361
80.011
DP544
Total expenditures of state financial assistance
Total expenditures of federal awards and state financial assistance
3,997,639
10,910,184
$ 11,323,319
 Identify SFA in accounting records
 Arrange for state single audits
 Provide subrecipients FSAA information
 Review subrecipient financial reporting packages
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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
 Establishes audit standards and rules
 Provides technical assistance
 Performs audits and reviews
 Reviews financial reporting packages
Research GAA, Statutes,
Other Sources
State Project Determination
State
Project
Agency Requests New
CSFA for State Project
Recipient vs. Vendor
Determination
RECIPIENT
X
VENDOR
X
EXEMPT
ORG.
State Financial Assistance Process
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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
 Administrative Code
 Agreements
Research GAA, Florida
Statutes, other sources
State Project Determination
State Financial Assistance Process
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 MOE.
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Research GAA, Florida
Statutes, other sources
State Project Determination
STATE
PROJECT
Agency Requests New
CSFA for State Project
Recipient vs. Vendor
Determination
State Financial Assistance Process
Recipients vs. Vendors
Recipients
Vendors
Benefits citizens
Benefits the State
Accountability of funds
No accountability of funds
Programmatic
decisions
No programmatic decisions
May have match/MOE
No match or MOE
Returns residual funds
Residual funds = Profit
Audit required
No state single audit
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 #1. No federal, state matching, or MOE funds are involved.
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Research GAA, Statutes,
other sources
State Project Determination
State
Project
Agency Requests New
CSFA for State Project
Recipient vs. Vendor
Determination
RECIPIENT
X
VENDOR
X
EXEMPT
ORG.
State Financial Assistance Process
State single audit (combined federal & state
single audit, if both thresholds are met)
Unobligated funds returned to the State, unless
authorized to retain funds
Comply with CFO Memo #3 (14-15) provisions
Subrecipient agreements must have standard
contract language, CFOM #4 provisions, etc.
State Projects
Compliance Supplement
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
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
 If a state project is selected for audit, use of
the Supplement is mandatory.
 Adherence to the Supplement satisfies the
audit requirements of s. 215.97, F.S.
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
10 compliance requirements auditors should
consider in a single audit (s. 215.97, F.S.)

Contains general audit procedures

Auditor judgment is necessary



Discusses project objectives, procedures, and
compliance requirements specific to a project
Auditors use specific compliance requirements in
audits of state financial assistance
An explanation needs to be provided to DFS if a
Compliance Supplement is not prepared
536 State Projects
Only 441 have State Project
Compliance Supplements (82%)
As of March 2015
20% of State Projects had Supplements in
2002
62% of State Projects had Supplements in
2009
74% of State Projects had Supplements in
2012
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


“A process designed to provide reasonable
assurance regarding achievement of objectives”
Contains internal control characteristics for each
compliance requirement
Requires auditors to obtain an understanding of
internal controls, assess control risk, and perform
tests of controls
 Guidance for auditors to identify applicable
compliance requirements for projects not
included in Part Four.
State Agency is in best position to determine
what is important to success of state project.
Preparing the compliance
supplement form
(part four)
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 State Agency
 CSFA Number
 Project Title
 Completed by
 Phone/E-mail
 IG/AD Review
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
A. Activities Allowed or
Unallowed
F. Matching
B. Allowable Costs
G. Period of
Availability
C. Cash Management
H. Reporting
D. Eligibility
I. Subrecipient
Monitoring
E. Equipment & Real
Property Management
J. Special Tests &
Provisions
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 Requirements are unique to each state project and
are found in laws, rules, and provisions of contract
or grant agreements.
 DFS considers these apply to each project:
A. Activities Allowed or Unallowed
B. Allowable Costs
G. Period of Availability of State Funds
EXAMPLES
Allowable activities include tutoring, job
readiness skills training, and health education.
Unallowable activities include field trips and staff
professional development.
B. Allowable Costs
Requires expressed or necessarily implied
authority to expend state funds (AG Opinion 078101)
At minimum, recipients/subrecipients 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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EXAMPLE
Allowable Costs:
1) Travel expenditures
2) Conference registration fees and lodging
3) Printing costs for flyers
Unallowable Costs:
1) Promotional items, refreshments, greeting cards
2) Any travel costs unrelated to outreach activities
Refers to cash advances, not 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.
EXAMPLE
Interest earned on cash advances provided by the
State shall be returned to the department.
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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)
EXAMPLES
Clients between the ages of 3 and 22 attending
the Harris Educational Center are eligible for
services.
Eligible subrecipients are for-profit, privately
held, investment-grade businesses that employ
between 10 and 50 persons and generate
between $1 million and $25 million in annual
revenue.
Specifies the use, management, and
disposition of equipment and real property
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E. Equipment & Real Property
Management
EXAMPLES
 Upon installation, the emergency power generators
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.
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
F. Matching
EXAMPLE
A 25% local match is required, except for local
governments which qualify for the Green Initiative.
Eligible match sources include: cash; in-kind service
costs; and land value of applicant-owned project sites
which do not contain recreational facilities.
Land value acquired under other state or federal grant
land acquisition programs is ineligible.
(Rule 62D-5.055(4)(c), F.A.C.)
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Specifies the time period during which non-state
entity may obligate/expend state financial
assistance
Examples
 State Fiscal Year
 Contract/Grant Agreement Period
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
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:
a) actual number of enrollments;
b) actual number of participants successfully
completing each session; and
c) total project expenditures (by expense category).
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Verify that the recipient/subrecipient monitored
subrecipients per project requirements
 On-site visits
 Limited-scope audits
 Expenditure review
 Review subrecipient audit reports
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, and
 Expenditure review to ensure that grant funds
were spent only for allowable costs.
Types of Special Tests:
 Related-party transactions
 Professional qualifications
 State procurement guidelines
 Recipient vs. Vendor Checklist
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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.
Suggested Audit Procedures:
Compare the amount of contracts awarded to relatedparty organizations with the total amount of contracts
awarded.
Identifying Compliance
Requirements
Updates to the Catalog & Compliance
Supplement are welcome
throughout the year!
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
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

FSAA Line: (850) 413-3060
The End
Department of Financial Services
Bureau of Auditing
Mark Merry ……………….……………Bureau Chief
Teresa Weeks…………..…...... Financial Administrator
Phillip Sley………....Professional Accounting Specialist
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