| Dear Center Members: |
| This GAQC Alert informs you about the following important matters: |
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Head Start Event
The U.S. Department of Health and Human Services (HHS) Office of Head Start (OHS) and the GAQC are cosponsoring the next live GAQC Web event titled, The Head Start Program: COVID-19 Implications and Other Program Updates, to be held on Tuesday, November 16, 2021, from 1:00 PM – 3:00 PM (Eastern Time). If you audit the Head Start program as part of your single audits, this event will assist you in better understanding the latest important information. The presenters for this event will include several HHS staff and two auditors that have experience auditing the Head Start program. Topics to be covered in the session include:
- An overview and background of Head Start;
- Pandemic funding added to the Head Start program and allowable uses;
- Pandemic-related flexibilities and other program updates; and
- Auditing the Head Start program.
GAQC Member Registration with CPE (fee). Access the CPE registration page.
GAQC Member Registration with no-CPE (free). Access the no-CPE registration page.
This event will also be informative for Head Start recipients. You may invite your clients to participate by using the public registration information at: https://www.aicpa.org/cpe-learning/webcast/the-head-start-program-covid-19-implications-and-other-program-updates-wc. If recipients do not wish to attend and pay for the CPE offering, a no-CPE archive of the event will be provided shortly after the event and will be left open to the public.
New PRF-Related TQA
As described further in GAQC Alert #429, the SEFA reporting for PRF is required to tie to an entity’s reporting into the HHS Reporting Portal. Due to how HHS has defined the PRF Reporting Portal reporting periods, it will not be uncommon for the SEFA to include PRF amounts from a prior fiscal year. The GAQC began receiving questions on whether an auditor could report on a SEFA that contains out-of-period PRF amounts in-relation-to the current year financial statements as is required in a single audit. In response, the GAQC worked collaboratively with the AICPA’s auditing standards team to issue a new TQA 9160.36, Reporting on the Provider Relief Fund in the Schedule of Expenditures of Federal Awards in Relation to the Financial Statements in a Single Audit. The TQA provides nonauthoritative guidance, including background to explain why out-of-period amounts occur, and concludes that an auditor can issue an in-relation-to opinion on the SEFA in this scenario when certain conditions and requirements are met.
OMB Addenda Status
The following is the latest status we have on the expected OMB Addenda to the 2021 Supplement. We cannot predict exact timing but hope that Addendum #1 will be issued in the coming weeks. The timing for Addendum #2 is less certain but we hope it will be issued by the end of the calendar year.
Addendum #1. This Addendum is in final clearance at OMB. It will include a new program section for the Coronavirus State and Local Government Fiscal Recovery Fund (21.027) which is a very large new Treasury program established by the ARPA. It will also include updates to Section 1 of the Education Stabilization Fund (ESF) (84.425) to address provisions of ARPA.
Addendum #2. This Addendum is further behind. Of key importance is that the expected contents of this addendum do not align with what OMB described in the 2021 Supplement (in Appendix VII, Other Audit Advisories) would be in Addendum #2. The programs now expected to be included are as follows:
10.542 - Pandemic EBT – Food Benefits (new program going primarily to states)
10.649 - Pandemic EBT – Admin Costs (new program going primarily to states)
14.871/14.879 - Section 8 Housing Choice Vouchers (existing program – changes primarily to address new ARPA funding provisions)
20.315 - National Railroad Passenger Corporation Grants (new program)
93.499 - Low Income Household Water Assistance Program (new program)
93.558 – Temporary Assistance for Needy Families (existing program – changes primarily to address new ARPA funding provisions)
93.489/93.575/93.596 - Child Care Development Fund Cluster (existing program – changes primarily to address new ARPA funding provisions)
A word of caution is that the above list is based on the programs the GAQC was asked to comment on for Addendum #2. As has been the case previously, things are changing regularly so there could be changes to the above list. Also, the other programs that had been identified in Appendix VII of the 2021 Supplement as potential Addenda candidates (all Treasury programs) will not be included in Addendum #2 of the 2021 Supplement. Instead, Treasury is currently considering whether to include those programs in the 2022 Supplement.
Consistent with our past position, the GAQC recommends that, if possible, it is best to wait to perform single audits that have any of the above new programs as major programs until the related Addendum is issued. As it relates to existing programs that will be included, the decision to wait will be based on facts and circumstances. For example, if you are auditing a recipient where ESF is a major program but your client only expended funding under the ESF subprograms in Section 2 of the ESF Supplement program section (or in non-ARPA subprograms in Section 1), you may proceed. Or, if you are auditing TANF and your client did not expend significant ARPA funding under that program, you may also proceed. However, if, for example, your client's array of funding is such that one of the above existing programs has significant ARPA funding, it may be best to wait if possible.
Update to ARPA Program Listing
As noted in GAQC Alert #432, OMB previously issued a list of new and existing COVID-19 federal financial assistance programs with ARPA funding. A few errors were noted in the original listing including several that related to the identification of new ARPA programs (identfied in the listing with an asterisk). OMB investigated the discrepancies and found that several corrections were needed. Access the updated listing. A note in the introduction of the document describes the changes made.
Governmental Guides Updated
2021 GAS-SA Guide. The 2021 edition of the AICPA GAS-SA Guide is now available in both paperback and e-book formats. You should have this guide in your resource library if you are performing audits under Government Auditing Standards and single audits. Access purchase information for the GAS-SA Guide. Key changes in the 2021 edition include updates for the 2020 revision to the Uniform Guidance and full implementation of the AICPA's reporting suite of standards (i.e., Statements on Auditing Standards (SAS) Nos. 134-140), including updates to all illustrative reports. It is important to note that the updates to auditor reports included in the AICPA GAS-SA Guide for these new standards are required for audits of fiscal periods ending on or after December 15, 2021. Thus, auditors with clients having year ends prior to that date that have not early implemented the new reporting standards should refer to the 2020 GAS-SA Guide for the relevant auditing guidance and illustrative auditor reporting.
2021 SLG Guide. The 2021 edition of the AICPA SLG Guide is now available in both paperback and e-book format. It is a key resource for auditors performing state and local government financial statement audits. Access purchase information. There have been substantial changes to the guide to adopt SAS Nos. 134 -140 and all illustrative reports have been updated. Similar to the GAS-SA Guide, auditors will have to look back to the 2020 SLG Guide for reporting guidance in effect prior to the effective date of the new reporting standards. Updates have also been made for recently effective standards of the Governmental Accounting Standards Board.
Updated Audit Reports Posted
As noted above, the 2021 GAS-SA Guide and SLG Guide contain substantive updates to various illustrative audit reports due to the implementation of SAS Nos. 134-140 as follows:
- Yellow Book report illustrations
- Single audit report illustrations
- State and local government financial statement audit report illustrations
As a public service, the GAQC has again posted a sampling of the reports included in both guides. They can be accessed on the GAQC Illustrative Auditor’s Reports Resource Center.
Auditors should exercise professional judgment in any situation not specifically addressed in the illustrative reports provided. Keep in mind that the GAQC is only providing a sampling of reports. Auditors may access additional report illustrations in each specific guide which may be purchased at the AICPA store (see purchase links above).
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Sincerely,
AICPA Governmental Audit Quality Center
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| In This Alert |
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| Fundamentals Events Rebroadcasts |
| Have staff needing fundamentals training? Have them view Single Audit Fundamentals (a four-part series with up to 8 hours of CPE) on November 18 and 19, 2021 (access registration information for all parts or individual parts). |
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| Additional Resources |
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| Stay Informed |
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