 SLG Audit Planning Web Event
The annual GAQC Web event, 2023 State and Local Government Audit Planning Considerations, will be held on Thursday, May 18, 2023, from 1:00 PM – 3:00 PM (Eastern Time). It will help members that perform state and local government (SLG) financial statement audits learn about key audit and accounting developments at the time when many are beginning the audit planning process. The presenters are Michelle Watterworth, Plante Moran; Tony Boras, Crowe; and Amy Sutherland, Moss Adams. Topics to be covered include:
- Current developments affecting SLG audits and planning considerations;
- Updates on recent audit, accounting, and ethics standards affecting SLGs;
- Emerging practice issues and risky areas; and
- Perspectives and insights from practitioners in this area.
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.
Public Registration with CPE (fee). If you have clients that would be interested in attending this event, please provide them with the public CPE registration page.
HRSA Releases an Updated Post-Payment Notice of Reporting Requirements
On April 7, 2023, HRSA released an updated PRF and ARP Distributions Post-Payment Notice of Reporting Requirements (Notice of Reporting Requirements), which supersedes all previously issued Notices. Updates include:
- The addition of reporting requirements for Periods 8 and 9.
- Expanded guidance to clarify that the period of availability for reconsideration payments is based on the date the reconsideration payment is received [which per the Notice is the deposit date for automated clearing house (ACH) payments or the check cashed date].
- Clarifying information regarding the use of PRF and ARP Rural payments for lost revenues after the COVID-19 Public Health Emergency ends. PRF and ARP Rural recipients may use payments for lost revenues attributable to COVID-19 incurred within the period of availability, but only up to June 30, 2023, the end of the quarter in which the COVID-19 Public Health Emergency ends. To reflect these changes, HRSA modified and retitled Table 1 and added Table 2.
- An encouragement from HRSA (not a requirement) for for-profit recipients to submit their audits electronically through the HRSA Commercial Audit Reporting Portal (see next section).
Although not new, auditors are reminded that the previous Notice from October 2022 added a requirement for providers to apply ARP Rural payments towards eligible health care expenses and lost revenues attributable to COVID-19 before using PRF payments.
For-Profit Audit Submissions to HRSA
In 2022, HRSA opened the Commercial Audit Reporting Portal (the Portal) to allow PRF for-profit recipients to comply with HRSA audit submission requirements. As noted in the previous section, HRSA is encouraging for-profit organizations to submit their audits electronically through the Portal. The Portal's User Guide indicates that for-profit entities can submit the audit but there are several places in the User Guide and within the Portal that discuss the organization assigning the auditor to submit the audit. Auditors are cautioned that submitting audits to the Portal is a management function and that taking on such a management function raises independence concerns. We have communicated our concerns about this to HRSA and understand that HRSA will be making clarifications to both the Portal and the User Guide to clarify that the submission of the audit is a responsibility of the for-profit recipient and not the auditor. We will communicate any developments in a future GAQC Alert.
SFA News
As we reported in GAQC Alert #451, ED has had implementation issues relating to the National Student Loan Data System (NSLDS) that impact an institution's ability to comply with enrollment reporting requirements. This issue has had implications for auditors testing of this compliance area when auditing the SFA Cluster. The previous guidance issued by ED on this topic communicated the expectations of auditors for audits of institutions with fiscal years ending through February 28, 2023, and stated that auditors would not be expected to include any enrollment reporting data due from July 19, 2022, through February 28, 2023. It also provided revised audit objectives and suggested audit procedures for testing enrollment reporting and stated that future guidance would be issued for later audits of institutions. In April, that updated guidance was issued.
The new guidance, Update for Suggested Single Audit Procedures Related to NSLDS Enrollment Reporting, which is to be used when testing enrollment reporting for the SFA Cluster, is updated to address fiscal periods ending after February 28, 2023, and further revises the audit objectives and suggested audit procedures provided in the originally issued guidance. These revised objectives and suggested audit procedures will also be included in the 2023 Office of Management and Budget Compliance Supplement section for the SFA Cluster. As a reminder, ED separately issued similar guidance for impacted proprietary school compliance audits in a previously issued Dear CPA Letter, CPA-23-01: Modified Enrollment Reporting Testing Due to National Student Loan Data System Issues, which provides a revised objective and revised procedures for enrollment reporting testing for those audits.
ED Update on Third-Party Servicer Guidance
As noted in GAQC Alert #453, ED previously issued a Dear Colleague Letter, (GEN-23-03) Requirements and Responsibilities for Third-Party Servicers and Institutions (Updated Feb. 28, 2023), providing updates on guidance to institutions that contract with a third-party servicer 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. That guidance was scheduled to go into effect on September 1, 2023.
In an announcement titled, Update on the Department of Education’s Third-Party Servicer Guidance, dated April 11, 2023, ED announced a delay in the implementation of the third-party servicer guidance to give ED time to review and consider any revisions in guidance in response to the comments received. The announcement also states that ED has removed the effective date of September 1, 2023, and the new effective date will be at least six months after ED publishes the revised final guidance. In the meantime, ED indicates that Dear Colleague Letters GEN 12-08, GEN 15-01, and GEN 16-15 (as amended by ED's March 8, 2017, electronic announcement) remain in effect. The announcement also highlights several key areas of information that the servicers and institutions should be aware of now. Read the announcement to learn more.
CSLFRF News
Members having clients with CSLFRF funding should be aware that Treasury has issued an updated FAQ #4.11 in April 2023. Access the latest FAQs. It discusses how the end of the COVID-19 National Emergency impacts the CSLFRF program and clarifies that recipients generally will be able to continue to make investments using their CSLFRF funds without changes, with the exception of projects in the premium pay eligible use category, as discussed further in the FAQ. Other items discussed in the FAQ include the impact of the end of the emergency on using funds to respond to the public health and negative economic, revenue loss, and using CSLFRF funds under the water, sewer, and broadband infrastructure eligible use category. We also expect additional guidance from Treasury in the future on the impact of the recent State, Local, Tribal and Territorial Fiscal Recovery, Infrastructure and Disaster Relief Flexibility Act, which provides additional flexibility for how CSLFRF funding can be used, which includes infrastructure, community development and natural disaster response. Watch for a future GAQC Alert when such guidance is issued.
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Sincerely,
AICPA Governmental Audit Quality Center
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