Is Your District Audit-Ready?
Under the Uniform Guidance procurement standards, school districts are required to have written procedures related to the purchasing process. This means every step in your purchasing process needs to be documented and you must ensure your procedures comply with the standards.
In order to be in compliance with Uniform Guidance procurement standards written procurement procedures must be put in place. You must review and document each step of your purchasing process and incorporate all of the required elements from the Uniform Guidance procurement standards. This process includes a plethora of required elements, the consideration of specific dollar thresholds of purchases along with their corresponding methodologies and requirements. All procedures must reflect applicable state and local laws in addition federal law and procurement standards. This process can be detailed and time-consuming. Districts must also maintain a written conflicts-of-interest policy for purchases that use federal funds.
One of the first steps auditors or oversight agencies will take into account when beginning to test compliance with the Uniform Guidance procurement standards will be to review your written policies and procedures to develop audit procedures. Failure to have this documentation could result in audit findings, questioned costs, and possibly a modified opinion in your single audit report. This could lead to your entity being required to be audited as a high-risk auditee for the next two years. With a high-risk audit, 40 percent of federal expenditures are tested versus a low-risk audit in which only 20 percent are tested. In severe cases, failure to comply could result in a loss of funding, not to mention reputational damage.
These standards should have already been in place as of July 1, 2018. Contracts entered into subsequent to this date are subject to the aforementioned requirements. Taking action sooner rather than later is strongly recommended.
Rea & Associates can ease some or all of the burden for busy school districts. Our experience in the industry and knowledge of these requirements allows us to efficiently develop these procedures. In fact, we have a group of professionals who have obtained the AICPA Advanced Single Audit Certificate and have presented on Uniform Guidance Standards numerous times in the last year.
Depending on your needs, we can simply provide a template that you can customize to your school district, or we can document your entire process and tailor the written procedures for you. Our team is up to date on all recent threshold increases and the rules that go with them. These written procedures will be extremely important to develop your next audit as they will help determine what your auditors are testing. Make sure you have these in place in time to avoid findings and questioned costs or even a modified single audit opinion.
Contact Rea’s Government Team
Our team of government entity specialists are happy to help your district become audit-ready before it’s too late. Contact us today or click here to learn more about the services we provide to government entities, like yours.
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Please check out our educational resources for government entities with regard to the Uniform Guidance procurement standards. Our team works to maintain up-to-the-minute insight on this issue to help ensure that your policies and procedures are solid so that your government funding remains intact. Don’t hesitate to reach out to our team to learn more.
Single Audit Update
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