ED Letter Stresses Effective SEA Audit Oversight
(The following was excerpted from a recent article in the Single Audit Information Service.) The Department of Education (ED) Office of Grants Administration (OGA) recently sent a letter to state educational agency (SEA) heads reiterating their audit responsibilities when overseeing the single audit resolution process with local education agencies (LEAs), explaining the audit requirements in the Office of Management and Budget’s uniform guidance and citing examples of best practices.
ED OGA explained that in a March 2017 report, the ED Office of Inspector General found a wide variance in the quality and consistency of oversight from SEAs in different aspects of single audit resolution. “ED relies on SEAs to distribute federal education grant funds to subrecipients and to oversee their use,” the letter states. “Your oversight and internal controls should provide reasonable assurance that federal grants are awarded properly, recipients are eligible, funds are used as intended and corrective measures are taken when necessary. Lack of effective oversight and technical assistance can have a serious adverse impact on safeguarding federal education funds and ensuring that education programs comply with federal requirements.”
The letter notes that while SEAs are responsible for oversight of the LEA single audit process, the LEAs are responsible for taking corrective actions on single audit findings. This includes preparing a summary schedule of prior audit findings and a corrective action plan for current year findings. The corrective action plan must provide the name(s) of the contact person(s) responsible for corrective action, the corrective action(s) planned and the anticipated completion date. If the auditee does not agree with the audit findings or believes corrective action is not required, then the corrective action plan must include an explanation and specific reasons for the disagreement.
One key step that SEAs can take, according to ED OGA, to improve quality and consistency of LEA oversight is to ensure all recipients expending $750,000 or more in federal funds have a single audit conducted (§200.501). As a best practice, ED OGA notes that South Carolina sends a letter annually to all subrecipients (including entities that are not school districts) receiving federal funds. The state requests that subrecipients submit their single audit to the Federal Audit Clearinghouse by Dec. 1, or provide financial information to demonstrate that the entity expended less than $750,000 in federal funds in the most recently completed fiscal year. The state’s letter also explains that any entity expending less than $750,000 in such funds is not required to have an annual single audit conducted for that year.