Reminder: Auditees, not Auditors, Are Responsible for Preparing a Separate Corrective Action Plan
The Governmental Audit Quality Center has heard from
several federal agency representatives with concerns that auditees are not
preparing a separate Corrective Action Plan (CAP) and Summary Schedule of Prior
Audit Findings (SSPAF) as required in the
Uniform Guidance as identified in Section 200.512 Report Submission. There
appears to be confusion regarding these requirements as several packages
contained the following errors:
- Packages did not include a CAP but there were findings reported by the auditor.
- Packages excluded a CAP but the Auditor’s Schedule of Findings and Questioned Costs (SFQC) included a subheading in each finding such as “Management’s Corrective Action Plan” with a brief one sentence statement that followed.
- Packages included a separate page titled “Corrective Action Plan” but simply referred to the Auditor’s SFQC for each finding number.
- Several packages included the Summary Schedule of Prior Audit Findings (SSPAF) and/or the CAP as separate sections within the Auditor’s SFQC.
As a reminder, the Uniform Guidance requires that the Auditee must prepare a CAP in a separate document from the Auditor’s findings. The CAP must:
- Be placed on the auditee’s letterhead.
- Address each audit finding included in the current year auditor’s reports.
- Provide the name(s) of the contact person(s) responsible for the corrective action, the corrective action planned, and anticipated completion date.
- Include an explanation and specific reasons if the auditee does not agree with the findings or believes corrective action is not required.
Note also, that the Auditee is responsible for preparing the SSPAF.
As a best practice, the AICPA recommends that the SSPAF be placed on the Auditee’s letterhead. For more information on this topic, please refer to the AICPA’s Auditee Resource Center Article.
The Office of Management and Budget (OMB) has released the final 2017 Compliance Supplement.The 2017 Supplement contains several new pieces of guidance, along with the normal types of changes made by OMB each year such as the addition, deletion, and modification of various federal programs.This document supersedes the 2016 Supplement and applies to audits of fiscal years beginning after June 30, 2016. We recommend you review Appendix V, List of Changes for the 2017 Compliance Supplement, to learn more about the type of changes made and the specific programmatic changes by Catalog of Federal Domestic Assistance (CFDA) number.
Frequently Asked Questions Updated
OMB has also published an updated Frequently Asked Questions (FAQ) resource document. This document contains 24 new FAQ’s and revisions to 4 previously asked FAQ’s. The FAQ provides additional context, background, and clarification of the policies described in the Uniform Guidance and should be considered in the single audit work plan and reviews. Several of the new FAQ’s relate to indirect costs and other auditee topics such as subrecipient monitoring and risk assessment. Additionally, several FAQ’s directly relate to the audit requirement section of the Uniform Guidance including the following FAQ’s:
- An entity may organize the SEFA in an alternate way such as by state agency or departments of an organization and still be compliant with the requirement to list individual federal programs by federal agency.
- Including subtotals of expenditures by federal agency on the SEFA is not required in the Uniform Guidance but doing so is a best practice.
- The auditee should include the name of the cluster on the SEFA regardless of whether the expenditures were incurred under only one program or multiple programs within the cluster of programs.
We encourage you to review the FAQ in its entirety.