| Dear Center Members: |
The purpose of this GAQC Alert is to inform you of the following matters:
- Registration information is available for the May 2, 2023, GAQC Annual Required Update Webcast;
- Registration information is available for the April 20, 2023, GAQC Web event focusing on single audits of school districts;
- The GAQC responded to the Office of Management and Budget (OMB) Request for Information (RFI) related to upcoming revisions of the Uniform Guidance.
- U.S. Department of Education (ED) has issued an updated audit guide for proprietary schools and third-party servicers; and
- A Dear Colleague Letter has been issued by ED on third-party servicers.
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Required GAQC Webcast
Annually, the GAQC hosts a required Webcast for firm designated audit quality partners (DAQPs) and state audit organization (SAO) designated audit quality leaders (DAQLs). This year's event, 2023 GAQC Annual Required Update Webcast, will be held on Tuesday, May 2, 2023, from 1:00 PM – 3:00 PM (Eastern Time). The purpose of the event is to provide members with a summary of the key issues that should be considered by audit teams as part of planning for the 2023 audit season.
While the event is required for DAQPs and DAQLs, all levels of staff will benefit from attending. It is highly recommended that you view the live offering prior to starting your 2023 audits, there will be several CPE rebroadcasts scheduled later for those that have scheduling conflicts. We will also post a no-CPE archive after the event. The presenters this year are: Mary Foelster, AICPA; Jeff Markert, KPMG; Kim McCormick, Grant Thornton; and Lindsey Oakley, FORVIS.
Topics to be covered include:
- The latest on single audits and related regulatory matters, including what is expected for the 2023 OMB Compliance Supplement;
- A summary of various accounting and auditing standard-setters' activities; and
- 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.
School District Single Audits
The GAQC event, Auditing the Most Common Programs Received by School Districts, will be held on Thursday, April 20, 2023, from 1:00 PM – 3:00 PM. This event should be of great interest to the many GAQC firms and SAOs that perform single audits of school districts and will focus on audit considerations of several federal programs most commonly received by school districts including the Child Nutrition Cluster, Title I Grants to Local Educational Agencies, and the Special Education Cluster. All three programs have specific nuances and unique characteristics that present challenges for both recipients and auditors. Although the session is primarily for auditors, auditees may find the session useful as well.
The presenters are: Teresa Hicks, Ohio Auditor of State's Office, Matthew Kelly, Plante Moran, and Lindsey Kennimer, Snow Garrett Williams. Topics to be covered include:
- An overview of the three common federal programs and related requirements in the OMB Compliance Supplement;
- The implications of the ED Cross-Cutting section in the Compliance Supplement for certain ED-funded programs;
- Key auditor challenges and reminders; and
- Best practices and tips.
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.
Uniform Guidance RFI
As noted in GAQC Alert #452, OMB is planning a complete update to the Uniform Guidance during 2023 with a full public exposure document expected sometime this summer. In advance of that, OMB issued an RFI notice with a request to hear from various stakeholders about their ideas for changes needed to the Uniform Guidance. Access the GAQC's comprehensive response to the RFI. You may also browse all other comments submitted.
Updated ED Audit Guide
If you perform audits of proprietary schools or third-party servicers, you should be aware that ED has recently issued an updated Guide titled, 2023 Guide for Financial Statement Audits of Proprietary Schools and For Compliance Attestation Examination Engagements of Proprietary Schools and Third-Party Servicers Administering Title IV Programs (Guide), that is effective for fiscal years beginning on or after January 1, 2023. Early implementation is allowed. This Guide supersedes the September 2016 edition of the Guide, related Frequently Asked Questions, and several Dear CPA Letters (which are listed in the transmittal letter).
The transmittal letter details the changes to the Guide which include changing the compliance engagement relevant to proprietary schools to an examination-level attestation engagement. Additionally, the Guide clarifies when it can be used as a "safe harbor" and the auditor's responsibility for ensuring that the requirements subject to audit are current and the attestation procedures are sufficient. As it relates to the detailed auditor requirements, there are also several additions, clarifications, and eliminations. See the transmittal letter for a listing of the changes and a detailed crosswalk comparing the changes between the 2016 Guide and the 2023 Guide. Questions about the updated Guide can be sent to the Non-Federal Audit Team at: oignon-federalaudit@ed.gov.
ED Dear Colleague Letter
ED has also issued a Dear Colleague Letter, (GEN-23-03) Requirements and Responsibilities for Third-Party Servicers and Institutions (Updated Feb. 28, 2023), that provides updates on guidance to institutions that contract with a third-party servicer (TPS) to administer any aspect of the institution’s participation in the student assistance programs under Title IV of the Higher Education Act of 1965 (Title IV), as amended. The GAQC verified with ED that the requirements of the letter apply to entities that contract with an institution, whether that institution is public, non-profit, or for-profit.
The letter provides a definition of a TPS as any entity or individual that administers, any aspect of an institution’s participation in Title IV programs. Additionally, it provides a listing of functions or services that a TPS generally performs, tables that include a non-exhaustive list of functions that when outsourced would render a third party a TPS, and a number of related questions and answers. The letter states based on ED reviews of contractual arrangements between institutions and TPSs, that most activities and functions performed by outside entities on behalf of an institution are intrinsically intertwined with the institution’s administration of the Title IV programs and thus the entities performing such activities are appropriately subject to TPS requirements. This may be a different understanding than institutions and TPSs have historically had, thus expanding the pool of entities considered a TPS for which ED requirements will apply to.
Since the letter’s first issuance on February 15, 2023, ED posted an update on February 28, 2023, which adjusted the effective date of the guidance to September 1, 2023. Institutions will be required to report any arrangements with TPSs that have not been reported to ED, and entities meeting the definition of a TPS will be required to submit the Third-Party Servicer Data Form to ED by that date. Additionally, because ED announced these changes during a comment period, it adjusted the comment period to March 28, 2023. Comments can be submitted via the Federal eRulemaking Portal at Regulations.gov under Docket ID ED-2022-OPE-0103.
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Sincerely,
AICPA Governmental Audit Quality Center |
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| In This Alert |
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| Did You Miss These Events? |
| If you missed our Lightning Round events (i.e., single audit and state and local government) or our Shuttered Venue Operators Grant event, you can now access the no CPE archives. |
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| GAQC Website Access |
| On March 25 and 26, 2023, members will not be able to access the GAQC Website since the entire AICPA site will be unavailable that weekend due to system maintenance. If you have any specific items you may need to access from our site that weekend, please pull them down in advance. We apologize for any inconvenience this downtime may cause. |
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| Additional Resources |
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| Stay Informed |
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