LIST OF SUBSTANTIVE CHANGES AND ADDITIONS. PPC's Guide to Single Audits. Twenty third Edition (August 2015)

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1 Route To: Partners Managers Staff File LIST OF SUBSTANTIVE CHANGES AND ADDITIONS PPC's Guide to Single Audits Twenty third Edition (August 2015) Highlights of this Edition The following are some of the important new features in the 2015 Edition of PPC's Guide to Single Audits: Comprehensively Revised for the Uniform Guidance. Your Guide has been revised to fully incorporate relevant portions of the OMB s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for s (Uniform Guidance), which supersedes, revises, and combines requirements from eight different OMB circulars (including the cost principles circulars and OMB Circular A 133) into one set of guidance. You cannot afford to be without this critical new guidance! The Uniform Guidance significantly changes the single audit process, for example by establishing new audit thresholds, new requirements for determining major programs and low risk auditees, and new requirements for reporting questioned costs. Your Guide s text and practice aids have been completely updated for the audit requirements of the Uniform Guidance. Your Guide also provides guidance on compliance requirements for continuing federal awards that might still fall under the previous cost principles circulars and administrative requirements. Updated for the The OMB Compliance Supplement is updated annually, superseding previous editions, and making it essential that you use the correct Compliance Supplement for your audits. The 2015 Compliance Supplement contains significant revisions, including separate sections of compliance requirements for (a) continuing awards that are not subject to the Uniform Guidance and (b) new awards or previous awards with incremental funding that are subject to the Uniform Guidance. Because your Guide s audit programs and checklists have been updated to incorporate the changes in the 2015 Compliance Supplement, you will be able to properly implement its requirements. Updated for the 2015 Edition of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Your Guide has also been updated to incorporate the guidance in the 2015 edition of the AICPA Audit Guide, Government Auditing Standards and Single Audits (previously, Government Auditing Standards and Circular A 133 Audits). Among other important changes, the Audit Guide has been expanded to include 10 additional chapters related to the Uniform Guidance. New and Updated Auditor s Reports. Your Guide s auditor s reports have been updated for changes to the AICPA s illustrative reports, including changes relating to implementation of the Uniform Guidance. Your Guide also includes three new reports (two Yellow Book reports and one Uniform Guidance report for use when the auditor identifies material weaknesses but no significant deficiencies). The Single Audit Reports Checklist in your Guide has also been updated for relevant report changes. Guidance on Proposed Changes to the Data Collection Form. The Federal Audit Clearinghouse is planning to revise the data collection form to include additional data required by the Uniform Guidance, such as whether a program s indirect costs are based on the new 10% de minimis rule. Your Guide s discussion of the data collection form will help you prepare for the proposed changes and make you aware of the information you need to collect in order to complete it properly. gsap15sub.pdf 1

2 ALL CHAPTERS 1. Updated throughout to incorporate relevant requirements in OMB's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Throughout chapters (as applicable) CHAPTER 1 Introduction and Overview 2. Revised the title of the OMB Compliance Supplement and the 2015 AICPA Audit Guide, Government Auditing Standards and Single Audits (AICPA GAS/SA Audit Guide). 3. Updated content from and references to the 2015 GAS/SA Audit Guide to reflect guidance in new Part III, which is applicable in Uniform Guidance audits. Note: Because of the comprehensive nature of the revisions necessary to update this Guide for the Uniform Guidance, the 2015 GAS/SA Audit Guide, and the 2015 OMB Compliance Supplement, this listing of substantive changes only focuses on certain significant changes relating to those subjects, as well as other changes made to the Guide. Auditors should carefully review the chapters and practice aids in the 2015 edition of this Guide. 1. Updated the introduction to discuss the Uniform Guidance, including coverage in the Guide, the comprehensive update of the Guide's text and practice aids for the Uniform Guidance, and certain transition practice aids provided for use in remaining single audits conducted under OMB Circular A Added a discussion about how the results of prior years' tests of controls might not be relevant in the year a nonfederal entity implements the Uniform Guidance. 3. Added a discussion about new Uniform Guidance requirements for cognizant agencies for audit. 4. Added a discussion about cognizant agencies for indirect costs. 5. Updated the discussion about responsibilities of federal awarding agencies. 6. Updated the definitions of recipient and certain related terms. 7. Updated the discussion regarding rules for determining whether a recipient is required to have a single audit. Throughout chapters (as applicable) Throughout chapters (as applicable) Updated the definitions of federal award and federal financial assistance. 9. Added a discussion about federal awarding agency exceptions to regulations in the Uniform Guidance. 10. Updated the lists of governmental pronouncements Updated the discussion about the Compliance Supplement

3 CHAPTER 2 Pre engagement Activities CHAPTER 3 Audits of Financial Statements and Schedule of Expenditures of s 12. Updated the discussion about peer review findings relating to single audits. 13. Updated the discussion about the AICPA GAS/SA Guide. 14. Updated the discussion about the AICPA Risk Alert for Single Audits. 15. Updated the list of items included in PPC's Government Documents Library. 16. Updated the list of electronically accessible audit information. 17. Updated the discussion of the Recovery Act for changes in the and Section Updated the discussion of the Uniform Guidance. Section Moved the discussion about the Report on National Appendix 1A Single Audit Sampling Project to a new appendix to the chapter. 1. Revised the list of authoritative literature for changes in the professional standards. 2. Revised the discussion about what GAAP requires for a nonprofit organization. 3. Added a discussion about additional basis of accounting considerations for single audits. 4. Updated the discussion about single audit procurement procedures. 5. Updated and condensed the discussion of independence. 6. Updated the discussion of other professional standards and requirements. 7. Updated the discussion of determining the need for a single audit for the Uniform Guidance. 8. Added a discussion about National Institutes of Health awards. 9. Updated the discussion of determining the amount of federal awards expended for the Uniform Guidance and for changes in the 10. Updated the discussion of determining the frequency of the audit and the audit period for the Uniform Guidance. 11. Updated the discussion of special planning considerations in initial engagements for the Uniform Guidance. 1. Updated the discussion of the schedule of expenditures of federal awards for the Uniform Guidance Section Section 205 Section 206 Section 207 Section 304 3

4 CHAPTER 4 Planning the Single Audit CHAPTER 6 Internal Control Considerations CHAPTER 7 Compliance Auditing CHAPTER 8 Subrecipient Considerations CHAPTER 9 Program specific Audits CHAPTER 10 Concluding the Single Audit CHAPTER 11 Reporting Under the Single Audit 1. Added a discussion about the 2015 Compliance Supplement. 2. Updated the discussion of auditing and reporting considerations in a single audit, including transition issues, cognizant or oversight agencies for audit, and major program determination for the Uniform Guidance and for changes in the 2015 Compliance Supplement. 3. Revised the discussion about use of third party service providers. 4. Revised and expanded the discussion about use of internal auditors. 5. Condensed the discussion about Recovery Act considerations. 1. Updated the authoritative literature and added a discussion of the Uniform Guidance requirements regarding internal control, and changes to the 2015 AICPA GAS/SA Guide and the 2015 Compliance Supplement (including the removal of the content previously in Part 6). 1. comprehensively updated for the Uniform Guidance, the 2015 AICPA GAS/SA Guide, and the 2. comprehensively updated for the Uniform Guidance, the 2015 AICPA GAS/SA Guide, and the 1. comprehensively updated for the Uniform Guidance, the 2015 AICPA GAS/SA Guide, and the 2. Updated the list of practice aids for use in program specific audit, including the new audit program GSA AP Updated the discussion to address upcoming changes to the 2015 data collection form. 4. Updated reports and related notes based on report examples in the 2015 GAS/SA Audit Guide Sections 401, 402, and , and sections Appendixes 9A 1, 9A 2, and 9B 1 1. Revised the discussion about the data collection form. Section comprehensively updated for the Uniform Guidance, the 2015 AICPA GAS/SA Guide, and the Updated the discussion about audit report due dates Updated the discussion about basis of accounting Added new reports to list of illustrated auditor's reports and included in the appendices to the chapter. 5. Updated the illustrative schedule of expenditures of Exhibit 11 4 federal awards. 4

5 CHAPTER 12 Audit Follow up and Oversight CHAPTER 13 Indirect Costs ALL PRACTICE AIDS GSA CX 1.1 Engagement Acceptance and Continuance Form Award GSA CX 1.3 Evaluating Independence Government Auditing Standards, 2011 Revision 6. Updated reports and related notes based on report examples in the 2015 GAS/SA Audit Guide. 7. Added two Yellow Book reports on internal control and on compliance and other matters when material weaknesses but no significant deficiencies were identified. 8. Added a new Uniform Guidance report on compliance and internal control over compliance when material weaknesses but no significant deficiencies were identified. 9. Updated sample findings for Uniform Guidance requirements. Appendixes 11A, 11B, and 11C Appendixes 11B 5 and 11B 6 Appendix 11C 3 Appendix 11E 1. Updated the discussion of the corrective action plan. Section Updated the discussion of reviews by federal agencies, including updated information about the CIGIE Section 1202 desk review and quality control review checklists and access to regulators to workpapers. 3. Updated the discussion about audit quality concerns, including the list of common deficiencies noted in reviews. 4. Updated the discussion about single audit roundtables. 5. comprehensively updated to provide a summary of key information based on the Uniform Guidance, the 2015 AICPA GAS/SA Guide, and the 2015 Compliance Supplement. 1. Updated to incorporate relevant requirements in OMB's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for s (Uniform Guidance). 2. Revised the title of the OMB Compliance Supplement and the AICPA Audit Guide, Government Auditing Standards and Single Audits (GAS/SA Audit Guide). 3. Updated content from and references to the 2015 GAS/SA Audit Guide to reflect guidance in new Part III, which is applicable in Uniform Guidance audits. 1. Revised existing items and added new items to consider during the acceptance or continuance process. 1. Revised the instructions and updated for additional clarity GSA CX, GSA CL, GSA AP (as applicable) GSA CX, GSA CL, GSA AP (as applicable) GSA CX, GSA CL, GSA AP (as applicable) GSA CX 1.1 GSA CX 1.3 5

6 GSA CX 1.5, GSA CX 1.6, GSA CX 1.7 Major Program Determination Worksheets Uniform Guidance Audits GSA CX 1.8 Subrecipient and Contractor Determination Form GSA CX 2.1 Planning Materiality GSA CX 3.2 Engagement Team Discussion Federal Award GSA CX 3.4 Audit Inquiries Summary Form GSA CX 5.1 Internal Control System Federal Award GSA CX 5.2 Internal Control System Matrix GSA CX 6.1 Entity Risk Factors GSA CX 7.3 Risk of Material Noncompliance Assessment Federal Award GSA CX 7.4 Inherent Risk on Noncompliance Assessment Form 1. Revised the worksheets for determining major programs for use in Uniform Guidance audits. (Note: These checklists should not be used for audits subject to the audit requirements in OMB Circular A 133; see Appendix B.) 1. Revised the title and updated for use in Uniform Guidance audits. GSA CX 1.5, GSA CX 1.6, and GSA CX 1.7 GSA CX Revised certain terminology and wording. GSA CX Expanded the instructions and added additional discussion topics to the checklist. GSA CX Revised the form for changes in the audit programs. GSA CX Updated for changes in the 2015 Compliance Supplement, including removal of Davis Bacon Act and Real Property Acquisition and Relocation Assistance as types of compliance requirements. Added discussion of the removal of the internal control information from Part 6 of the Compliance Supplement and related OMB and AICPA guidance. 1. Added discussion of the removal of the internal control information from Part 6 of the Compliance Supplement and related OMB and AICPA guidance. 1. Revised and expanded the list of entity risk factors to consider. 1. Updated for the Uniform Guidance and changes in the 1. Updated for the Uniform Guidance and changes in the GSA CX 5.1 GSA CX 5.2 GSA CX 6.1 GSA CX 7.3 GSA CX 7.4 6

7 GSA CX 10.1 Compliance Test Worksheet Federal Award (For Awards Made prior to December 26, 2014) GSA CX 10.2 Compliance Test Worksheet Federal Award (For Awards Made on or after December 26, 2014, and Incremental Funding with Changed Terms and Conditions) GSA CX 11.1 Closing Entry and Audit Adjustment Form GSA CX 12.2 Audit Documentation Checklist GSA CX 14.1 Single Audit Reports Checklist GSA CX 14.2 Disclosure Checklist for the Schedule of Expenditures of s GSA CL 1.1, GSA CL 1.2, and GSA CL 1.3 Engagement Letters GSA CL 2.1, GSA CL 2.2, and GSA CL 2.3 Management Representation Letters GSA AP 1, GSA AP 2 General Procedures 1. Updated the worksheet for Part 3.1 of the 2015 Compliance Supplement, including removal of Davis Bacon Act and Real Property Acquisition and Relocation Assistance as types of compliance requirements. 1. Created new worksheet based on part 3.2 of the 2015 Compliance Supplement. 1. Revised checklist for better functioning in the electronic environment. 1. Added questions relating to the use of internal auditors. 1. Updated the checklist for the reporting considerations included in the Uniform Guidance and the AICPA GAS/SA Guide. 1. Updated the checklist for the reporting considerations included in the Uniform Guidance and the 2015 AICPA GAS/SA Guide. 1. Updated the letters and notes for current developments, the Uniform Guidance, the 2015 AICPA GAS/SA Guide, and to provide additional clarity. 1. Updated the representations and notes for current developments, the 2015 AICPA GAS/SA Guide, and to provide additional clarity. 1. Updated the audit program for current developments, including the Uniform Guidance, the 2015 AICPA GAS/SA Guide, and the 2. Revised steps regarding documentation of independence. GSA CX 10.1 GSA CX 10.2 GSA CX 11.1 GSA CX 12.2 GSA CX 14.1 GSA CX 14.2 GSA CL 1.1, GSA CL 1.2, and GSA CL 1.3 GSA CL 2.1, GSA CL 2.2, and GSA CL 2.3 GSA AP 1 and GSA AP 2 GSA AP 1 and GSA AP 2 7

8 GSA AP 3 Audit Program for the Schedule of Expenditures of s GSA AP 4 Audit Program for Not Included in the Compliance Supplement. GSA AP 5 Audit Program for Compliance Requirements (For Awards Made prior to December 26, 2014) GSA AP 6 Audit Program for Compliance Requirements (For Awards Made on or after December 26, 2014, and Incremental Funding with Changed Terms and Conditions) APPENDIX A Acronyms and Compendium of Technical Literature APPENDIX B Additional Checklists 1. Updated the audit program for current developments, including the Uniform Guidance, the 2015 AICPA GAS/SA Guide, and the 1. Updated for changes in the 1. Revised the audit program based on Part 3.1 of the 1. Added a new audit program based on Part 3.2 of the 1. Updated the appendix for changes in technical literature since publication of the twenty second edition of PPC's Guide to Single Audits. 1. Replaced content in the appendix with major program determination checklists for use in OMB Circular A 133 audits. Note: Appendixes B 2, B 3, and B 4 were previously included as GSA CX 1.5, GSA CX 1.6, and GSA CX 1.7, respectively, in the 2014 edition of PPC's Guide to Single Audits. Appendixes B 2, B 3, and B 4 include updated information based on the 2015 OMB Compliance Supplement. The checklists in Appendix B should not be used for audits subject to the audit requirements in the Uniform Guidance; see GSA CX 1.5 through GSA CX 1.7. GSA AP 3 GSA AP 4 GSA AP 5 GSA AP 6 Appendix A 2 Appendixes B 1, B 2, B 3, and B 4 8