Focusing on documentation and internal controls, can help ensure successful external and regulatory audits for federal program spending.
Without a doubt, it has been a year to take a deep breathe as everyone has been trying to manage the various federal COVID-19 funding streams—how to spend them, when to spend them, and when and where to account for them. Whether you’re wrapping up or are in the throes of your financial statement audit, below are a few reminders that may help reduce some of the stress and allow you to enjoy the upcoming holidays.
- Identify all federal programs by the proper Assistance Listing Number (ALN). Here a few of the programs along with their assigned ALNs that have caused confusion:
- Provider Relief Fund – 93.498
- Coronavirus Relief Fund (CRF) – 21.019
- CRF Prior Purchase Reimbursement Program – 21.019
- Elementary and Secondary School Emergency Relief (ESSER) Prior Purchase Reimbursement Program - 84.425D
- CRF Texas Education Agency (TEA) Match – 21.019
- CRF City/County Match – 21.019
- ESSER I and II – 84.425D
- ESSER III – 84.425X
- Texas Department of Agriculture - Child Nutrition Emergency Operational Cost Reimbursement Program (School Lunch) – 10.555
- Texas Department of Agriculture - Child Nutrition Emergency Operational Cost Reimbursement Program (Child and Adult Care Food Program)– 10.558
- In addition to the Annual Financial Report submission requirements, don’t forget that your audit must be submitted to other entities as well:
- Texas Health and Human Services Commission
- Federal Audit Clearinghouse – Data Collection Form
- Municipal Advisory Council (Continuing Disclosure Requirements)
- ESSER I and/or II may be major funds for financial statement purposes. This is separate from the major program designation that auditors use for Single Audit purposes.
- ESSER I, II and III should not be treated as separate programs for auditing purposes. The ALN of 84.425 is treated as one population, so please make sure that you provide your auditor with the information for all components of ESSER.
- The Maintenance of Equity (MoEquity) reporting requirements are due December 3, 2021 and December 10, 2021 for those that are self-certifying (Document Submission Plan) or using the tool TEA provided in its recent MoEquity Handbook.
The overarching theme for audits today and in the coming years is documentation and internal controls. Make sure that all documentation tells the full story of your federal spending and little to no verbal explanation is needed in case of an audit. Lastly, each federal compliance requirement should have an internal control associated with it (review, approval, monitoring, etc.) and those controls should be evidenced in the documentation you maintain. If you focus on these two things, you should have a more successful external audit and/or regulatory audit.
From the Whitley Penn family to yours, Happy Thanksgiving! We are so thankful for you!