IHS Office of Tribal Self-Governance
Financial Training Session
Audits and Compliance
Presenter: Mark Moadel,
IHS Director, Division of Audit,
Office of Finance and Accounting
The Single Audit Act
and OMB Circular A-133
The Single Audit Act of 1984, P.L. 98-502, as amended by the Single Audit Act
Amendments of 1996, P.L. 104-156, established uniform audit requirements for
State, local, and tribal governments and nonprofit organizations receiving Federal
financial assistance. The Single Audit Act eliminated the grant-by-grant approach
to auditing Federal awards.
Office of Management and Budget (OMB) Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations, provides instructions to Federal
agencies on how to implement the Single Audit Act.
State, local, and tribal governments and nonprofits must comply with the Single
Audit Act and OMB Circular A-133. OMB Circular A-133 requires recipients of
Federal awards who spend $500,000 or more in a year in total Federal awards to
have an annual single audit conducted.
The Indian Self-Determination and Education Assistance Act , P.L. 93-638,
requires all tribes/tribal organizations that compact with the IHS under Public Law
93-638, Title V, to comply with the Single Audit Act.
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Single Audit Process with P.L. 93-638 Requirements
Financial Statements Preparation
Upon expenditure of $500,000 or more total Federal funds from all sources, a
Single Audit is required under provisions of the Single Audit Act and as specified
by OMB Circular A-133. P.L. 93-638 specifies that if 638 funds are provided,
reporting requirements may be met through the Single Audit. The tribe/tribal
organization engages an independent auditor (CPA) to conduct the audit.
The tribe/tribal organization is responsible for the preparation of the financial
statements and the Schedule of Expenditures of Federal Awards and
accompanying notes. The tribe/tribal organization is also responsible for an
acceptable A-133 audit and should take steps to ensure that a competent CPA is
engaged for the completion and submittal of the audit.
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Single Audit Process with P.L. 93-638 Requirements
Single Audit Performance and Reporting
The CPA conducts an audit of the auditee (the tribe/tribal organization) as
specified in A-133. This includes a financial audit and the required Single Audit
reports.
The CPA is responsible for the auditor’s opinion on the financial statements and
the Schedule of Expenditures of Federal Awards, the Single Audit reports, the
Schedule of Findings, the Status of Prior Year Findings, and the Summary of
Results.
The tribe/tribal organization prepares a Corrective Action Plan to be included in
the audit package.
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Single Audit Process with P.L. 93-638 Requirements
Single Audit Reporting Package Submission
The tribe/tribal organization and CPA are jointly responsible for the preparation of
the Data Collection Form (SF-SAC).
The tribe/tribal organization is responsible for distribution of the completed audit
package and filing the audit and SF-SAC with the Single Audit Clearinghouse.
Submission of the completed audit package is due the earlier of 30 days after the
tribe/tribal organization receives the audit or 9 months after the end of the
tribe/tribal organization’s fiscal year.
OMB Circulars direct that the reporting package is to be electronically filed with
the Clearinghouse. The Clearinghouse verifies the SF-SAC is acceptably
completed, and logs receipt of the audit package. If there are no findings, the
audit is not distributed to funding agencies. If the SF-SAC is incomplete,
inconsistent or unclear, the Clearinghouse requests corrections. The
Clearinghouse does not review the audit nor assess acceptability of the audit.
This is done by the awarding agencies.
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Single Audit Process with P.L. 93-638 Requirements
HHS OIG National External Audit Review Center (NEAR) Review
NEAR is the official receipt point for all audits reporting on HHS funding and
programs. The NEAR Center is a unit of the U.S. Department of Health and
Human Services Office of Inspector General, Office of Audit Services, and located
in Kansas City, Missouri.
The NEAR office receives all audit reports and logs them in as official
Departmental records. Evidence of this receipt and logging process is the
Common Identification Number (CIN) assigned by the NEAR office.
NEAR determines whether the audit report documentation received is complete.
•
If the documentation is determined not complete, NEAR procedures determine
the disposition and any required notifications.
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If the documentation is determined to be an audit that can be processed, the
report is assigned to a reviewer for further analysis and review.
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Departmental policy is that management letters are a part of the audit and
need to be included with the audit report; management letters not included will
be requested.
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Single Audit Process with P.L. 93-638 Requirements
HHS OIG National External Audit Review Center (NEAR) Review
NEAR determines whether HHS has cognizant/oversight responsibilities for this
audit under terms and conditions of OMB Circular A-133. If HHS has
cognizant/oversight responsibilities, a determination is made on the acceptability
of the audit report and will be communicated in the transmittal package issued by
NEAR.
NEAR identifies findings and/or questioned costs requiring Departmental
resolution. These findings may be auditor-identified or developed by the NEAR
reviewer from the audit report. Such findings are coded for tracking in the
Departmental Stewardship System (AIMS) and assigned to the appropriate
funding agency for resolution; such information is shown on the NEAR transmittal
letter Attachment A, as the Resolution Agency who is the action official for
resolution of the finding.
An HHS Resolution Official for the entire audit is also assigned by NEAR based
on the findings. The Resolution Official is listed in the transmittal letter with the
office mailing address.
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Single Audit Process with P.L. 93-638 Requirements
HHS OIG National External Audit Review Center (NEAR) Review
NEAR also assesses the audit for unusual or serious items and potential impact
upon Departmental funding and programs. Examples of these items would
include going concern issues, frauds, illegal activities, serious internal control
issues, and other matters of grave concern. Any necessary notifications
concerning these serious and unusual items are prepared.
Upon completion of review, the transmittal letter is prepared for issuance by
NEAR. The transmittal letter contains the audit and related correspondence, the
transmittal letter and its Attachment A, and other related documents. NEAR
notifies the tribe/tribal organization and their CPA of the results of the review by
sending the transmittal letter and its related attachments. At the same point in
time, the transmittal letter is sent to the funding agencies within HHS.
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Single Audit Process with P.L. 93-638 Requirements
Tribe/Tribal Organization Management Response to Findings
The tribe/tribal organization receives the transmittal letter from NEAR. In
accordance with instructions given in the transmittal letter, a response to the
Attachment A findings and questioned costs is to be sent to the Resolution Official
designated in the transmittal letter.
IHS Division of Audit
The IHS Division of Audit is located with the Office of Finance and Accounting and
handles issues related to the audits of IHS funds and programs. The Division of
Audit receives the transmittal letter from NEAR at approximately the same time as
the tribe/tribal organization. The transmittal letter is logged into the DARMIS audit
resolution database, along with any related materials or correspondence, to track
the status of the resolution process and to accumulate a historical picture for the
specific organization.
The transmittal letter is forwarded to the appropriate IHS awarding officials with a
request for the Letter of Determination (LOD) in order to resolve the audit in the
Departmental Stewardship System (AIMS).
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Single Audit Process with P.L. 93-638 Requirements
Office of the Secretary (OS)/ASRT/Office of Finance, Division of Systems
Policy and Audit Resolution (DSPAR)
The Division of Systems Policy and Audit Resolution is located within the Office of
the Secretary, HHS. DSPAR receives the transmittal letter from NEAR at
approximately the same time as the tribe/tribal organization and the IHS Division
of Audit. The transmittal letter is distributed to DSPAR when the identified
findings and/or questioned costs affect more than one funding agency within
HHS. The transmittal letter is logged into the DARMIS audit resolution database.
As the HHS Resolution Official, DSPAR will notify the funding agencies of their
assigned HHS Resolution Agency responsibilities and distribute any
correspondence and/or Corrective Action Plan received to the funding agencies
listed in the Attachment A.
If also an assigned HHS Resolution Agency, DSPAR will review its assigned audit
findings and the corrective action plan in the audit report, including recent
updates. If additional information is needed to complete the resolution process,
DSPAR will discuss this with the tribe/tribal organization, CPA, NEAR, and funding
agencies and awarding officials, as appropriate.
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Single Audit Process with P.L. 93-638 Requirements
HHS Resolution Agency Awarding Officials
Upon receipt of the transmittal letter, the awarding official should contact the
tribe/tribal organization for any needed information or materials. Once the
awarding official has sufficient information and documentation to satisfy
themselves regarding the issues identified in the finding or as a questioned cost,
a determination on the matter is made.
The determination on the disposition of the finding or questioned cost is
communicated to the tribe/tribal organization in a Letter of Determination (LOD).
A copy of the Letter of Determination is sent to the assigned Resolution Official
and is the basis for the Office of Inspector General Clearance Document (OCD).
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Single Audit Process with P.L. 93-638 Requirements
Office of Inspector General Clearance Document (OCD)
IHS Division of Audit: Based upon the Letter of Determination, the IHS Division
of Audit prepares and transmits an Office of Inspector General Clearance
Document (OCD) to the HHS OIG. A copy of the OCD is also sent to the
awarding official.
If a questioned cost is determined to be a disallowed cost, a copy of the Letter of
Determination and resulting OCD are transmitted to the Program Support Center
(PSC) and a receivable is established.
DSPAR: Once DSPAR makes a determination on the disposition of findings as an
assigned Resolution Agency, then it will send a Letter of Determination to the
tribe/tribal organization notifying them of the results of the review and the
disposition of the findings, and prepare and transmit an OCD to the HHS OIG.
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IHS Division of Audit Contact Information
IHS Division of Audit Single Audit Resolution Services Assignments
James Baker: Bemidji, Billings, Nashville, Oklahoma City
• phone: 301-443-4984, email: James.Baker@ihs.gov
Kathyrine Soliven: Albuquerque, Alaska, Navajo, Portland
• phone: 301-443-4973, email: Kathyrine.Soliven@ihs.gov
Susan Blair: Aberdeen, California, Phoenix, Tucson
• phone: 301-443-3252, email: Susan.Blair@ihs.gov
Mark Moadel: Lead - Single Audit Resolution Services
• phone: 301-443-4873, email: Mark.Moadel@ihs.gov
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Example NEAR Transmittal
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Example NEAR Transmittal
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Example NEAR Transmittal Attachment A
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Example NEAR Transmittal Attachment A
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Example Letter of Determination (LOD)
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Example Letter of Determination (LOD)
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Important Indian Self-Determination and Education
Assistance Act (ISDEAA) Audit Provisions
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25 U.S.C. § 458aaa-5(c)(1)
o Title V tribes/tribal organizations must comply with the Single Audit Act
o 42 C.F.R. § 137.165 - Self-governance tribes/tribal organizations are
required to undertake annual audits
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25 U.S.C. § 450j-1(f), Limitation on remedies relating to cost disallowances
o “The 60-day rule”: audits are deemed accepted if not rejected by National
External Audit Review Center (NEAR) within 60 days.
o “The 365-day rule”: disallowances are barred if the tribe/tribal organization
isn’t notified of the disallowance within 365 days of NEAR’s receipt of the
audit.
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Auditee Responsibilities
The Tribe/Tribal Organization (auditee) must:
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Identify all of its Federal awards received and spent and the Federal
programs under which each was received.
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Comply with Federal laws and regulations and contract and grant provisions
related to the appropriate Federal program.
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Maintain an internal control system over Federal programs which provide
reasonable assurance that it is managing its Federal awards in compliance
with Federal laws and regulations and contract and grant provisions.
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Prepare appropriate financial statements that reflect its financial position,
results of operations or changes in net assets, and, where appropriate, cash
flows for the fiscal year audited.
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Ensure that audits are completed in accordance with OMB Circular A-133 and
submitted on time.
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Follow up and take corrective action on audit findings.
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