| Dear Center Members: |
As the new year begins, we are sending this GAQC Alert to inform you about the following activities and developments:
- New guidance issued by the Federal Student Aid (FSA) section of the U.S. Department of Education (ED) titled, Suggested Single Audit Procedures Related to NSLDS Enrollment Reporting, relevant to single audits that include the Student Financial Assistance (SFA) Cluster and similar guidance expected for compliance audits of proprietary institutions;
- Recently adopted revisions to the AICPA Code of Professional Conduct (AICPA Code) pertaining to independence requirements for compliance audits;
- Registration information for several upcoming GAQC Web events including the February 9th event on audit considerations related to for-profit recipients of the Shuttered Venue Operators Grant (SVOG) program; and
- A reminder to complete GAQC Membership Compliance Questionnaire (see sidebar).
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SFA News
If you perform single audits that include the SFA Cluster, you should be aware that FSA has recently issued an Electronic Announcement, Suggested Single Audit Procedures Related to NSLDS Enrollment Reporting. The announcement explains implementation issues that have occurred relating to the National Student Loan Data System (NSLDS) that impact an institution's ability to comply with enrollment reporting requirements and communicates ED's expectations of auditors in light of the issues.
Of most interest to auditors, the announcement states that for institutions with fiscal years ending through February 28, 2023, auditors would not be expected to include any enrollment reporting data due from July 19, 2022, through February 28, 2023, in their evaluation of the institution's compliance with the enrollment reporting requirements. FSA also states that institutions were expected to be in compliance with the enrollment reporting requirements for all other periods within their fiscal year.
For impacted single audits performed in accordance with the 2021 and 2022 Office of Management and Budget Compliance Supplement, the announcement also includes a revised Audit Objective and Suggested Audit Procedures to be used for the SFA Cluster's Special Test 4, Enrollment Reporting. For single audits of institutions with fiscal years ending after February 28, 2023, FSA states that it will issue guidance no later than March 1, 2023. Read the electronic announcement for more details.
If you perform audits of proprietary institutions in accordance with the ED Audit Guide, Guide For Audits of Proprietary Schools and For Compliance Attestation Engagements of Third-Party Servicers Administering Title IV Programs, the announcement states the ED Office of Inspector General (OIG) is expected to issue a Dear CPA Letter to provide a revised objective and revised procedures for Enrollment Reporting testing. This guidance is expected any day and we anticipate that it will be posted on the ED OIG Proprietary Schools, Foreign Schools, and Third-Party Servicer Audits Web page.
Compliance Audit Ethics Updates
The AICPA Professional Ethics Executive Committee adopted revisions to the AICPA Code pertaining to independence requirements for compliance audits that are effective for compliance audits commencing after June 15, 2023, with early implementation allowed. The changes clarify requirements to help promote consistency in practice and align the requirements to applicable risks.
The revisions include two new definitions ("compliance audit" and "compliance audit client") and changes to the definition of "financial statement attest client" to remove the requirements to
- apply the "Independence Rule" (ET sec. 1.200.001) and its interpretations with respect to any entity that meets both of the following criteria: (a) not subject to compliance audit procedures and (b) includes amounts in the schedule or statement in the compliance audit that are trivial and clearly inconsequential to the schedule or statement as a whole, and
- apply the “Affiliates, including State and Local Government Affiliates” subtopic (ET sec. 1.224) with respect to a compliance audit client.
The Professional Ethics Division has also issued Q&As related to the revisions to assist members in implementing the requirements. You can find those in the Ethics Questions and Answers, section 10 (paragraphs .01-.06).
Upcoming GAQC Web Events
Register now for the following GAQC Web events to be held from 1:00 PM – 3:00 PM (Eastern Time) unless stated otherwise below:
Thursday, February 9, 2023, Auditing For-Profit Entities Receiving the Shuttered Venue Operators Grant. This event will help you understand how to audit for-profit recipients of the SVOG program. See GAQC Alert #450 for more information about this session.
GAQC Member Registration with CPE (fee). Access the member CPE registration page.
GAQC Member Registration with no-CPE (free). Access the member no-CPE registration page.
Thursday, February 16, 2023, 2023 Auditing State and Local Governments Lightning Round. This GAQC web event finds solutions to challenging issues encountered when performing SLG financial statement audits in a fast-paced lightning round of questions and answers commonly received by the GAQC. A panel of experienced practitioners will lead this presentation and provide insights on the following:
- Common peer review matters found in state and local governments audits
- State and local government audit performance considerations
- Common financial statement accounting and reporting challenges
- Best practices, tips, available resources, and tools
GAQC Member Registration with CPE (fee). Access the member CPE registration page.
GAQC Member Registration with no-CPE (free). Access the member no-CPE registration page.
February 23 and February 24, 2023, Single Audit Fundamentals Series. This is a rebroadcast of the popular GAQC series that is intended to help members train new staff or offer a refresher for staff that perform single audits. Since it is a rebroadcast, there is only a CPE option. You can always access the no-CPE archive of this series at any time.
March 16, 2023, Evaluating and Reporting Findings in a Single Audit. This GAQC Web event is intended to raise awareness of the importance of evaluating findings and reporting in a single audit. With the addition of historic amounts of federal funding into the single audit pipeline, getting your findings right and issuing correct reporting is more important than ever. You will learn about:
- How to evaluate and report single audit findings;
- The requirements for addressing prior year findings;
- Common single audit reporting issues; and
- What to do if you have to reissue a prior year report.
GAQC Member Registration with CPE (fee). Access the member CPE registration page.
GAQC Member Registration with no-CPE (free). Access the member no-CPE registration page.
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Sincerely,
AICPA Governmental Audit Quality Center |
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| In This Alert |
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| Member Questionnaire Due Soon |
| The annual mandatory GAQC membership compliance questionnaire for firms is due Tuesday, January 31, 2023. The separate questionnaire sent to our state auditor members is due Friday, February 17, 2023. Any questions or concerns about either questionnaire should be sent to gaqc@aicpa.org. |
| Did You Miss These Events? |
| If you missed our Hot Topics in Pandemic Funding event held last November or the Yellow Book Independence event held in December, you can now access the no CPE archives. |
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| Additional Resources |
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| Stay Informed |
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