Resolving Findings in OMB Circular A-133 Audits: A Briefing for Grant Recipients and Subrecipients

The current level of attention to audits performed on grant and subgrant recipients under OMB Circular A-133 is unprecedented. These audits have had a longstanding role in assuring accountability for federal funds. But now, under the Obama Administration’s Stimulus program, they are being viewed as perhaps the key tool for oversight of the massive expenditures being made with those funds. And, expenditures made under all of the programs authorized under the Stimulus must be considered “high risk” and audited accordingly. Against the backdrop of recent federal criticism of the quality of non-federal audits and changes to auditing standards on reporting deficiencies in internal controls, it’s no surprise that independent auditors are being more diligent and that more findings are showing up in these audits.

Grant recipients and subrecipients are responsible for following up on those findings and for taking corrective action when it’s warranted. But that process starts with discussions with the auditors during the field work and continues through the exit conference and the issuance of draft and final reports. Then, audit report users (also known as federal awarding agencies and pass-through entities) are required to review the findings in a timely way and to address them through decisions to disallow questioned costs, make financial adjustments, or require other corrective actions. Because of the potentially adverse impact that assertions about noncompliance or control weaknesses, resolution of these findings has the potential to be contentious.

The unique presentation team for this audio conference will help recipients and subrecipients handle their responsibilities during audit resolution in a measured and appropriate way, addressing and correcting the real problems but also protecting the interest of their organizations. Sefton Boyars is a former federal regional inspector general with the perspective of someone who has issued grant audit reports with findings that had to be made to stick On the other hand, Bob Lloyd has worked both in and with the grantee community, often successfully challenging the validity of audit findings because of shoddy audit work, incorrect interpretation of requirements, or mitigating facts and circumstances. Together they have decades of experience dealing with audits of federal grants.

Learning Points:

• The information that government program officials expect to see in audit findings;
• Sources of guidance contained in government and industry audit standards and in Circular A-133 itself;
• Details on the multiple required attributes of an audit finding;
• The types of criteria against which current conditions are often compared;
• Common mistakes that auditors make in presenting audit findings;
• Drafting management responses for inclusion in the text of the findings;
• Federal requirements on the timing and substance of audit follow-up actions;
• Guidance about disputes and appeals and practical considerations about whether to pursue them.

Attendees Who Will Benefit From This Audio Conference Include:

• Governing body members
• Audit committee members
• Organizational executives
• Legal counsels
• Financial managers
• Grant and contract managers
• Audit liaisons

Robert Lloyd

Robert M. Lloyd is a respected authority on policies affecting the acquisition, administration and audit of federal grants and contracts. The former executive director of the Grants Management Advisory Service, Mr. Lloyd has more than 35 years of experience in federal award implementation and oversight. After extensive work with two large federally funded organizations and a national firm, he formed his own management consulting practice in Washington, DC, in 1982. Since then, he has been a trainer, consultant and advisor to management and audit units in fifteen major federal grant making agencies and with grantee, subgrantees and independent audit organizations located in all fifty states, the District of Columbia and 17 foreign countries. In addition, he has served recipient and independent audit organizations located throughout the United States and eight foreign countries. Among his diverse clients are governmental units, colleges and universities, nonprofit organizations, associations and professional and commercial firms.

Sefton Boyars
Until his retirement in October 1996, Mr. Boyars had been the Department of Education's Regional Inspector General for Audit in Regions IX and X for sixteen years. During his 35-year career, Mr. Boyars worked for a variety of federal government audit agencies and a California county. Mr. Boyars is active in his profession. He is a member of the California CPA Society and was a long-time Chair of his chapter's combined committee on Accounting Principles and Auditing Standards and Government Accounting and Auditing. He served on the Qualifications Committee of the California State Board of Accountancy for three years. Mr. Boyars is a Certified Public Accountant, a Certified Government Financial Manager, a Certified Fraud Specialist and a Certified Internal Auditor. He is a past Chair of the Western Intergovernmental Audit Forum and often served as chair or co-chair of its subcommittees and roundtables. Mr. Boyars is a past President of the San Francisco chapter of the Association of Government Accountants (AGA). He is an experienced trainer and has taught for numerous organizations, including federal, state and local governments, professional associations (such as the Association of Government Accountants, the Institute of Internal Auditors and state CPA societies), the USDA Graduate School and Management Concepts, Incorporated. He received AGA's National Education and Training Award for 1998. Mr. Boyars authored AGA's revised study guide for Course 3 of the Certified Government Financial Manager: Governmental Financial Management and Control. The study guide was issued in the summer of 2008.