| Dear Center Members: |
This GAQC Alert informs you about several important matters including the following:
- The Office of Management and Budget (OMB) has issued a correction to the 2021 OMB Compliance Supplement (Supplement);
- The 2021 Supplement is now posted to the GAQC Web site by individual section;
- The release of the 2021 AICPA Audit and Accounting Guides, State and Local Governments (SLG Guide) and Not-For-Profit Entities (NFP Guide), and the status of the 2021 AICPA Audit Guide, Government Auditing Standards and Single Audits (GAS-SA Guide);
- Information about updated U.S. Department of Housing and Urban Development (HUD) agreed upon procedures (AUP) reports and plans for updates to other illustrative reports included in the HUD Consolidated Audit Guide (HUD Guide) and;
- Department of Education (ED) guidance on how ED programs that use alpha characters to identify subprograms such as the Education Stabilization Fund (ESF) are to be reported on the Data Collection Form (DCF). See right sidebar for more on this.
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Supplement Correction
On August 25, 2021, OMB posted a corrected 2021 Supplement (the original was issued on August 12, 2021 (see GAQC Alert #430). There was no public notice provided by OMB, nor are the sections with changes denoted with a watermark or any other identification in the official OMB replacement. Instead, OMB asked the AICPA and other stakeholder groups to communicate its action. We have expressed our concern with this approach but are providing the information nonetheless to ensure our members are aware. It is important for members that may have downloaded the original posting to pull down the latest file. Note that the GAQC posting of the Supplement discussed below does include the most up-to-date version provided to us by OMB and we did watermark the sections that were corrected. The following are the list of changes that OMB has informed us it made:
- The identification of higher risk programs in each relevant program section in Part 4, Agency Program Requirements, referred erroneously to the Medicaid cluster being higher risk. For example, the Education Stabilization Fund section stated that the Medicaid cluster was higher risk instead of the Education Stabilization Fund. Corrections were made to each of the following higher risk program sections included in the 2021 Supplement to refer to the correct program name: Provider Relief Fund (93.498), COVID-19 Uninsured Program (93.461), Airport Improvement Program (20.106), Federal Transit Cluster (20.500/20.507/20.525/20.526), Coronavirus Relief Fund (21.019), and the Education Stabilization Fund (84.425). Note that no correction was needed to the Medicaid section as it appropriately referred to the cluster as higher risk.
- Part 1, Background, Purpose, and Applicability, revised the section discussing Appendix IV, Internal Reference Tables, on page 1-8 to address a similar error relating to the higher risk programs included in the Appendix. The previous version only referred to the Medicaid cluster as higher risk. The correction made clarifies that there are seven higher risk programs included in the 2021 Supplement.
- The original release of the COVID-19 Uninsured Program was not the final approved version. Therefore, OMB replaced the entire program section.
- The original release of the Student Financial Assistance cluster in Part 5, Clusters of Programs, was not the final approved version. Therefore, OMB replaced the entire program section.
- The Table of Contents was revised to update the reference to Appendix V, List of Changes for the 2021 Compliance Supplement, to refer to the 2021 Supplement and not the 2020 Supplement.
- Appendix IX, Compliance Supplement Core Team, was updated to reflect updated contacts for ED.
- Appendix V, List of Changes for the 2021 Compliance Supplement, was revised to reflect the updated changes due to the errors noted above.
GAQC Posts 2021 Supplement
As promised in GAQC Alert #430, the GAQC has posted the 2021 Supplement by individual section on our GAQC 2021 OMB Compliance Supplement Resource Center page, along with our observations about key changes made. A few things you should be aware of:
- You will see the page looks slightly different than previous years. This is because you are getting a sneak peek of a new Web site that the GAQC will be launching in the coming months. This is an overall AICPA Web site update that the GAQC will be part of.
- As a public service, we are again leaving the GAQC Supplement page open to the public. However, to access the page, all visitors will have to have an account with the AICPA and login. It is easy for non-members to set up an AICPA account.
- As noted in the previous section, we have posted the error correction files received from OMB and have watermarked the pages and sections that OMB informed us that have changed.
- You will see an empty column for future OMB Addenda. Once OMB issues future updates to the Supplement (as discussed in GAQC Alert #430), we will be posting them to this same location.
Single Audit Q&A Web Event
If you perform single audits, you should attend the next GAQC live Web event, Single Audit Lightning Round Q&A, which will be held on Wednesday, September 22, 2021, from 1:00 PM to 3:00 PM (Eastern Time). This GAQC Web event will provide you with critical information now that the 2021 Supplement has been released. This session, led by a panel of current and former GAQC Executive Committee members, will cover commonly asked questions the GAQC is getting from members on both the Supplement and the impact of COVID-19 funding on single audits. It will provide participants with a fast-paced lightning round discussion. Topics to be covered include:
- 2021 Compliance Supplement challenges and issues;
- Challenges presented by COVID-19 funding;
- Impact of future OMB Supplement Addenda coming this Fall; and
- Best practice tips.
Status of 2021 Guides
SLG Guide. If you audit state and local governments, the SLG Guide is an extremely useful resource. You should also be aware that the 2021 edition of the SLG Guide is now available in both paperback and e-book formats. This edition is particularly important as it has been updated to reflect changes to reflect the AICPA reporting suite of auditing standards which become effective for 12/31/21, year-ends and later, including updates to the numerous illustrative reports included in the Guide. Members should be sure to refer to the updated guide for purposes of updating audit reports within your practices. The 2020 SLG Guide should be referred to for purposes of accessing the former reports for use in audits of periods prior to 12/31/21. The 2021 SLG Guide also includes other updates for accounting standards and pandemic implications.
NFP Guide. If you audit the financial statements of not-for-profits, the NFP Guide is an extremely useful resource. You should also be aware that the 2021 edition of the NFP Guide is now available. Changes made this year will help you understand and implement recent updates and changes, including those related to revenue recognition, and grants and contracts. It will also provide you with an understanding of the accounting issues unique to not-for-profit entities and assist in the implementation of auditor report changes due to the AICPA reporting suite of auditing standards.
GAS-SA Guide. This guide will be available in the coming weeks. Watch for a future GAQC Alert announcing its issuance. Updates will include revisions for the AICPA suite of reporting standards, including updates to all illustrative reports. It will also include sections to provide reminders relevant to pandemic implications.
HUD Reporting Update
AUP Engagements. HUD is at various stages of making needed updates to its hard-coded electronic agreed-upon procedures engagement (AUP) report templates for lenders and multifamily housing programs to reflect report wording revisions resulting from the issuance of the Statement on Standards for Attestation Engagements (SSAE) No. 19, Agreed-Upon Procedures Engagements, which became effective for AUP reports dated on or after July 15, 2021. As a reminder, these HUD AUP engagements involve the practitioner comparing an auditee's electronically submitted financial and compliance information to the related hard copy supporting documentation and then issuing an electronic AUP report template via the relevant HUD submission system. Practitioners do not have the ability to revise HUD’s AUP report template wording.
The GAQC has been working collaboratively with HUD to assist it in making needed updates. The following provides a status of progress made by HUD on the lender and multifamily AUP templates.
- Lenders – HUD staff working in this area have informed GAQC staff that the hard-coded electronic AUP report templates used for submissions in the Lender Electronic Assessment Portal (LEAP) have been updated to reflect the report wording requirements of SSAE No. 19.
- Multifamily Housing Programs – HUD staff working in this area have informed GAQC staff that needed updates to the Financial Assessment Subsystem - Multifamily Housing (FASSUB) to incorporate the new AUP language are in process but that they will not be in place for six to seven weeks. The announcement regarding the updated AUP report language that will be hard coded in the system includes links to the new report wording for not for profit and for-profit entities. The GAQC offers the following advice for practitioners as it relates to the required AUP engagement and an out-of-date AUP report templates. Practitioners are advised to proceed with clicking "Submit" to process the electronic AUP reports so that auditees are able to meet their submission requirement. However, we also recommend that practitioners issue a separate AUP report that reflects the requirements of the updated attestation standards for AUP engagements and provide it to the client. Being able to support that an AUP report was issued in accordance with the standards will assist practitioners in the event the AUP engagement is selected as part of your internal inspection process, a peer review, or a federal quality control review.
As it relates to public housing authorities (PHAs) the Financial Assessment Subsystem-Public Housing (FASS-PH) system no longer uses hard-coded electronic AUP report templates. This policy was updated by HUD on November 13, 2020. Instead, practitioners click "Agrees or Disagrees" radio buttons and then upload their own AUP report. The system enhancement removes the existing AUP report template functionality from FASS-PH and alleviates hard coded reports that become out of date as AICPA standards change. Note that the report upload file link becomes available after the "Agrees or Disagrees" radio buttons are completed by the practitioner. Members auditing PHAs should ensure that AUP reports issued after July 15, 2021, reflect the new report wording from SSAE No. 19.
HUD Guide Reports. The GAQC team is currently working with HUD as it develops updated report illustrations for Chapter 2, Report Requirements and Sample Reports, of the HUD Guide. As noted earlier, the AICPA suite of reporting standards become effective for 12/31/21, year-ends and later. The goal is for HUD to have updated report illustrations before calendar year end.
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Sincerely,
AICPA Governmental Audit Quality Center
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| In This Alert |
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| ESF Presentation on the DCF |
| On August 4, 2021, ED sent a memo to grant recipients explaining how ED programs that use alpha characters to identify subprograms within an Assistance Listing (such as ESF) are to be reported on the DCF. Although ED did not post this memo, the State of Wisconsin posted it. Access it here. The ED memo says that the guidance in the memo is effective for all single audit submissions that include ED programs on or after Monday, August 9, 2021. We have heard from some members that ED has already asked some grantees to resubmit the DCF due to this new guidance. |
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