Auditing Federal Funds

Questions:

Do audits that are performed under Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards also include the Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards or Yellow Book report?

Most audits performed under Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards include a Yellow Book report. Audits performed on a single federal program, or program specific audits, are not required to include the Yellow Book report.

Are federal funds considered in determining the type of report a local auditee must submit to LLA?

Yes, but the consideration is different for quasi-public agencies (which are mostly nonprofits that receive local and/or state assistance) and local government agencies.
All funds that a local government agency receives are considered to be public funds; therefore, all funds that a local government agency receives are to be included in determining the type of report that the local government must submit to LLA (audit, review/attestation, or compilation). See What Kind of Report Does My Agency Need to Provide to the Legislative Auditor?
Once a nonprofit agency receives or expends any local or state assistance in any fiscal year, it must provide a report to LLA. After this initial criterion for reporting to LLA is reached, any federal funds the nonprofit receives must be included in the calculation to determine the type of report that the nonprofit must provide to LLA, even if those federal funds were received directly from the federal government, and not passed through a local or state government agency.
A nonprofit agency that receives only direct federal funds, and no local or state assistance, is not required to report to LLA.

The federal government requires submission of the Single Audit report within the earlier of 30 calendar days after receipt of the auditor's report(s) or nine months after the agency’s fiscal year end. The Louisiana audit law requires submission of reports within six months after the end of the audit period. Will LLA accept local auditee reports that include Single Audits nine months after the local auditee’s fiscal year end, without a late report finding?

Generally, no. LLA expects reports to be complete and ready to be issued when they are submitted, and does not allow submission of a report that is not complete and does not have all of its required components.

Local auditee reports that include a Single Audit report must usually be submitted to LLA within six months of the local auditee’s fiscal year end. The report that is submitted to LLA must also include the Single Audit report, the SEFA, and all other reports required by Uniform Guidance. If the report is submitted after the Louisiana statutory due date, it must include a late report finding.

An exception is made if a local auditee's audit report is ready to be submitted to LLA, but because of delays in federal guidance related to the expenditure of federal funds the local auditee has received, the Single Audit will be delayed. If a local auditee wishes to submit their audit report to LLA without the Single Audit report due to a delay in federal guidance, the local auditee or the CPA must notify LLA through the extension request form⁴on LLA's website before the due date of the audit report. A full explanation of the reason for the delay of the Single Audit report must accompany the request, and the request must plainly state that the extension is for the Single Audit report only, not the audit report, the statewide agreed-upon procedures report, the school board/charter school performance measures agreed-upon procedures report, or any other report that is required by Louisiana statute or LLA policy.

Upon receipt of the original audit report and other reports required by Louisiana statute or LLA policy, LLA will review and issue the report package as a public document. If the extension is approved by LLA and the audit report and other required reports except the Single Audit are submitted to LLA by the statutory due date, no late report finding is required to be included in the audit report or the Single Audit report.

When the local auditee's Single Audit report is complete the CPA will submit a revised report package to ereports@lla.la.gov that includes the Single Audit report, the original audit report and any other reports that were originally submitted to LLA, and a letter prepared on the letterhead of either the local auditee or the CPA firm stating that the original report package that was submitted to LLA has been revised to include the Single Audit report. The letter will be issued with the audit report and the Single Audit report, as the first page of the report package.

The auditor should review and follow the guidance in AU-C Section 560.13 (AU-C 560A.11 - A.17) to determine whether it is necessary to dual date the auditor's opinion in the revised report package; and AU-C Sections 560.15 - 18 (AU-C 560A.18 - A.26) regarding notification to the parties to whom the original audit report was distributed.

CPA firms also have the option, with the agreement of the local auditee, of performing the Single Audit with the existing federal guidance and submitting the audit report and the Single Audit report to LLA by the state statutory deadline; with the understanding that the report may need to be revised if the new federal guidance is materially different from the guidance under which the audit was performed.

Are loans made to the local auditee by the federal government subject to audit under Uniform Guidance?

The CPA should refer to Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart F, to determine if any loans made to a local auditee by the federal government are subject to the Single Audit and should be included on the SEFA.