If your organization has ever been involved with a single audit, you know that they are a “different animal”. Very different than a financial statement audit. Why? Single Audits involve testing for “compliance with rules”. RCO recently sponsored a workshop for the Executive Exchange where we highlighted common compliance deficiencies that we have observed while conducting single audits. In an effort to help not-for-profit organization become more compliant, we thought we would share these findings with our “blog community.”
There are potentially 14 areas of compliance requirements. The first step in compliance is knowing which of these requirements pertain to your grant(s). Which requirement relate to your grant, see this post. The compliance requirements are listed below and include some of the “common” deficiencies we have encountered.
- Allowable activities – activities that are being performed under the “guise” of a grant are not allowed by that grant.
- Allowable costs – expenses charged to the grant are not approved; documentation, such as invoices, can’t be located; expenses that are being allocated, such as salaries, are not done properly and/or proper documentation is not maintained.
- Cash management – funds that are drawn down are not spent timely; reimbursements are requested from the grantor before the funds are actually spent by the not-for-profit organization.
- Davis-Bacon Act – not knowing that this requirement applies to your grant (usually involves federal awards used for construction purposes).
- Eligibility – not maintaining proper documentation to show that program recipient was eligible for services; no review to ensure that staff are following guidelines.
- Equipment and real property management – not performing an inventory of items obtained with federal awards; not clearly marking/tagging property; not maintaining accurate records of items acquired and/or disposed of that were purchased with federal awards.
- Matching, level of effort, earmarking – not monitoring during the year to determine if you are meeting the match or level of effort; using income items for a match that do not qualify; documentation to determine if these items have been complied with have not been maintained or is incomplete.
- Period of availability – requesting reimbursement of an expense that was incurred before or after the grant period.
- Procurement – not checking the excluded parties list (at www.epls.gov) to determine if vendors with which you do business have been suspended or debarred; not following your organization’s procurement policies; not obtaining bids when required.
- Program income – not properly recorded or misclassified; used as part of your match when it is not allowed.
- Real property acquisition and relocation assistance – not doing your research when purchasing property that may require relocation of the current owners.
- Reporting – not submitting your reports to the grantor timely or not knowing when the reports are to be submitted; documentation for number of participants served or expenses requested for reimbursement on the reports does not agree with the documentation supporting these numbers.
- Subrecipient monitoring – not realizing that you have subrecipients; not properly monitoring those subrecipients
For more information about these compliance requirements, you can review the OMB Circular A-133, Compliance Supplement, OMB Circular A-122 (cost principles) and OMB Circular A-110 (administrative requirements) on-line.
Posted by Donna Mayes
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