|Dear Center Members:
|This GAQC Alert covers the following important topics:
- Registration information for the required 2019 Webcast, GAQC Annual Update, to be held on Tuesday, April 30, 2019, from 1:00 PM - 3:00 PM (Eastern Time);
- Reminder that the March 31st single audit submission deadline extends to April 1st this year;
- New information for members performing audits of entities subject to audit regulations of the USDA Rural Utilities Service (RUS); and
- New information about engagements performed under USDA Rural Housing rules.
This year's Webcast will provide members with a summary of the key issues that should be considered by audit teams as part of planning for the 2019 audit season. The presenters are: Heather Acker, CPA, Baker Tilly; Mary Foelster, CPA, AICPA; Erica Forhan, CPA, Moss Adams LLP; and Kim McCormick, CPA, Grant Thornton LLP. Topics to be covered include.
The Webcast is required for firm designated audit quality partners and state audit organization designated single audit leaders. However, all levels of staff will benefit from attending. While it is best to view the live offering prior to starting your 2019 audits, there will be several CPE rebroadcasts for those that have scheduling conflicts. We will also post a no-CPE archive of the event on the GAQC Web site for later viewing.
- The latest on single audits and related regulatory matters, including the status of the 2019 OMB Compliance Supplement;
- A summary of various accounting and auditing standard-setters' activities, including the latest on 2018 revisions to Government Auditing Standards;
- Auditing guidance relating to "other compliance audits" such as those required by HUD and the Department of Education;
- The status of initiatives to enhance governmental audit quality; and
- Available resources and tools.
Unlike other GAQC Web events, this event will be Web-based with streaming audio and video. Once you register, instructions will be provided on how to test your computer to ensure you will be able to access it.
GAQC Member Registration: GAQC members can register now using the CPE or no-CPE options.
To ensure you receive CPE for this Webcast, please complete your online registration by noon on Tuesday, April 30th. If you are interested in registering a group, the Webcast registration page provides you with "how to" and pricing information. A "Webcast Group Viewing" document also provides additional instructions.
Single Audit Submission Deadline
We have received several questions about what happens when the single audit submission deadline falls on a weekend. That is because many are working hard this week to finish up their June 30, 2018, single audits and the 9-month deadline for those audits is March 31st, which is a Sunday. Per section 200.512(a) of the Uniform Guidance, when the single audit submission due date falls on a Saturday or Sunday, the reporting package is due the following business day. So, April 1, 2019, will be the required date for submissions this year.
USDA RUS Update
As described in GAQC Alert #363, in June 2018 the GAQC commented on a proposed Final Rule issued by RUS titled, Policy on Audits of RUS Borrowers and Grantees, and related proposed revisions to RUS Bulletin 1773-1. While the proposal improved the previous out-of-date RUS rules, the GAQC asked RUS to make several technical corrections and clarifications.
We had thought the predecessor regulation and Bulletin would continue until such time that RUS addressed the comments received on the 2018 proposal. However, we were recently informed that RUS was not able to address comments received on the proposal due to staffing changes. Therefore, the Final Rule and Bulletin 1773-1, as proposed, are considered effective for December 31, 2018, year-end RUS audits and should be referred to by auditees and auditors. The Bulletin provides more detailed guidance, including illustrative financial statements and auditor's reports.
In general, the new guidance maintains the same type of engagements performed in the past (i.e., a financial statement audit performed under Government Auditing Standards and negative assurance reporting on compliance with aspects of contractual agreements and regulatory requirements in connection with audited financial statements). While there are technical inaccuracies within the regulation and Bulletin (e.g., the Bulletin erroneously refers to an opinion on the effectiveness of internal control), the ultimate outcome of what RUS is expecting for these engagements is evident in the illustrative auditor reports that are included in the Bulletin.
If you are in process of performing one of these engagements and were not aware of the new rules, you should review them to ensure an appropriate understanding. Areas to focus on include requirements for the engagement letter; mandatory audit procedures in connection with the financial statement audit and compliance reporting; several new auditee requirements; tweaks to what is covered in the auditor's report on compliance with aspects of contractual agreements and regulatory requirements; and clarifications for how audit information is to be submitted to RUS. Auditors should also closely check the illustrative reports provided by RUS against related AICPA illustrations before issuing.
While the audits are not due to RUS until 120 days after year-end, auditors are required by the rules to submit the auditor elements of the reporting package to the auditee within 90 days (which for 12/31/18 year-ends would be 3/31/18). If you are just becoming aware of the new RUS rules and believe you will need more time to ensure that your audit adequately meets the new RUS requirements, we recommend that you work with your client to receive an extension past the 90 days and have your client contact RUS for approval of such action.
USDA Rural Housing Update
As noted in GAQC Alert #355, over the course of the last year and a half, USDA Rural Housing Service (RHS) has been in process of revising the financial reporting requirements for for-profit rural multifamily housing entities to align more closely with those of HUD. In February, RHS issued a new Unencumbered Letter (UL) to multifamily borrowers electing to submit their fiscal year (FY) 2018 annual requirements using the requirements in the November 24, 2017, Final Rule, Multi-Family Housing Program Requirements To Reduce Financial Reporting Requirements. The new UL continues previous USDA guidance indicating that the reporting change is optional for FY 2018 and mandatory starting in FY 2019. It also provides illustrative financial statements, auditor reports, and instructions for how entities can request approval from RHS to not submit the previously required agreed-upon procedures engagements. Finally, we have heard indirectly that RHS is providing an extension for entities planning to submit FY 2018 annual reports from April 1, 2018, to May 31, 2019, but have not been able to confirm this in an authoritative RHS document. Therefore, we suggest if more time is needed for a FY 2018 submission that your client reach out to RHS to confirm the extension.
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As always, thank you for your commitment to governmental audit quality.
AICPA Governmental Audit Quality Center
|In This Alert
|Archived Event Available
|The archive of the GAQC Web event, GASB Leases: What Preparers & Auditors Need to Know to be Ready for Implementation, is now available. Access archived event.
|We welcome any suggestions or questions - please send them by e-mail at GAQC@aicpa.org.
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