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Home > Data Center > Audit > Frequently Asked Questions
Updated 9/7/05 ... scm

Frequently Asked Questions

 
Federal and State Audit Requirements

  1. What are the Department of Education’s (DOE) State audit requirements for school administrative units?

DOE State audit requirements are found in Title 20-A M.R.S.A., Section 6051 – Audit requirements for school administrative units or for all of Title 20-A, go to http://www.maine.gov under “state legislature.”

  1. What are DOE’s Federal audit requirements for school administrative units?

Federal audit requirements for school administrative units are found in U.S. Office of Management and Budget Circular A-133 – Audits of States, Local    Governments, and Non-Profit Organizations or http://www.whitehouse.gov/omb .  

Highlights of the Single Audit Process, produced by The Grants Management Committee, Chief Financial Officers Council, provides basic information on the single audit process in straightforward and concise language.

  1. What are DOE’s State audit requirements for private non-profit agencies?

DOE State audit requirements for private non-profit agencies are found in Title 20-A M.R.S.A., Section 2953 – Audit or for all of Title 20-A, go to http://www.maine.gov under “state legislature.”   

  1. What are DOE’s Federal audit requirements for private non-profit agencies?

Federal audit requirements for private non-profit agencies are found in U.S. Office of Management and Budget Circular A-133 – Audits of States, Local Governments, and Non-Profit Organizations or http://www.whitehouse.gov/omb .

  1. Where can I find a copy of the State of Maine Single Audit Report?

The audit report can be located on the Department of Audit’s website .

  1. What are the penalties if a school administrative unit fails to meet Federal and State audit requirements?

Penalties that may be applied to a school administrative unit by the Commissioner of Education for Federal noncompliance will be in accordance with Office of Management and Budget Circular A-133, Section ___.225 Sanctions and in accordance with 34 CFR, Section 80.12 - Special Grant or Subgrant Conditions for “High-Risk” Grantees and Section 80.43 - Enforcement.   A copy of the Circular can be found at http://www.whitehouse.gov/omb . 34 CFR - USDOE and 7 CFR - USDA can be found at http://www.gpoaccess.gov/ecfr .  

Penalties that may be levied by the Commissioner of Education for State noncompliance will be in accordance with Title 20-A M.R.S.A., Section 6801 (penalties for failure or unwillingness to comply with the requirements of Title 20-A) and Title 20-A M.R.S.A., Section 15604 (penalties for failure or unwillingness to comply with the reporting requirements of Title 20-A).  Title 20-A of the Maine statutes can be found at http://www.maine.gov under “state legislature.”

  1. What do some of the abbreviations in Federal and State documents and guidelines stand for?

AICPA            American Institute of Certified Public Accountants

CFDA             Catalog of Federal Domestic Assistance

CFR               Code of Federal Regulations

CPA               Certified Public Accountant

CPE               continuing professional education

EDGAR           U.S. Education Department General Administrative Regulations

GAAP             generally accepted accounting principles

GAAS             generally accepted auditing standards

GAGAS           generally accepted government auditing standards

GAO              U.S. General Accounting Office

OMB              U.S. Office of Management and Budget

SAS               AICPA Statements on Auditing Standards

  1. What is the due date for submission of the school administrative unit’s annual audit report to the Department of Education?

The annual audit report is due within nine (9) months after the end of the audit period, Title 20-A M.R.S.A., Section 6051 .   The Federal Single Audit Report is due within nine (9) months after the end of the audit period.

  1. If the school administrative unit or its auditor cannot meet the nine month submission date for the Federal Single Audit, can the school administrative unit or its auditor apply for an extension for filing?  

Yes, the school administrative unit or its auditor must request an extension from the Federal government if the Federal Single Audit report will not be submitted within nine months.   The written request for an extension for filing the Federal Single Audit report must be submitted to:   U.S. Department of Education, Post Audit Group, Office of the Chief Financial Officer, 400 Maryland Avenue, S.W., Washington, D.C. 20202, phone (202) 401-1823.

There is no provision in State statutes under Title 20-A M.R.S.A that allows the Commissioner of Education to grant an extension for filing the annual audited financial statements within nine months after the end of the audit period.

 

Procuring an Auditor and the RFP Process

  1. What procedures are used to procure an external auditor?

“Choosing an External Auditor” published by Mid-America Intergovernmental Audit Forum in March 2000, was developed specifically to assist State and local governments with hiring an audit organization capable of conducting a thorough, quality audit of federal grant funding.   The guide outlines a five-step process to help State and local governmental units hire an audit firm whose work will result in an audit that meets all industry and government standards.

  1. How often must a school administrative unit put its audit out to bid or arrange for a request for proposal (RFP)?

There are no Federal or State requirements to RFP for audit services within an established period of time. It is customary for school units to solicit audit services once every three to five years.   All school administrative units receiving Federal funds for education purposes must comply with Federal procurement regulations of 34 CFR, Part 80.36.

 

Records Management

  1. How long must a school administrative unit retain local school records?

Local school records must be retained in accordance with the record retention requirements of the Secretary of State, Maine State Archives – Disposition Schedule L – School Records.

  1. Is the retention period for Federal records the same as for non-Federal records?

No, retention and access requirements for Federal records is in accordance with 34 CFR, Part 80.42 .

 

School Construction Audits

  1. When is a school construction project considered completed and ready to be audited?

A project is considered completed when all invoices have been paid, all existing litigation/arbitration issues have been resolved, all applicable arbitrage computations have been prepared by bond counsel, the school administrative unit auditor, or other authorized person, and no further financial transactions are anticipated. Where required, certificates of occupancy shall have been obtained.

  1. How should the Department be notified that a project is ready to be audited?

Complete Form EF-B-55 available at http://www.maine.gov/education/forms/construction.htm

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Upon receipt of the report, Department audit staff will call and schedule a time for the audit.

  1. What should be done to prepare for the audit?

All records pertaining to the project should be made available for the Department auditor including

  1. Paid vendor invoices and corresponding warrants
  2. Bank and investment statements
  3. Canceled checks
  4. General ledger & general journal
  5. Approved original “Moveable Equipment List”
  6. Approved “Additional Moveable Equipment List”
  7. Cost statement(s) of temporary borrowing
  8. Applicable Internal Revenue Service (IRS) tax forms for arbitrage computation(s) - Form 8038-T – Arbitrage Rebate and Penalty in Lieu of Arbitrage Rebate or a letter from the party preparing the computation that states no arbitrage rebate is due the IRS.
  1. The audit is complete but there are unspent bond proceeds.   Can the remaining funds be spent on the project?

No further purchases from the construction account are allowed once the final audit is conducted.   Refer to Section 11 (7) of the Rules for Major Capital School Construction Projects regarding disposition of unexpended bond proceeds.

  1. What happens to the interest that was earned on the investment of temporary borrowing and bond proceeds?

School Administrative Units are required to return the State’s share of net interest income earned from investment of project funds to the Department.   Refer to Section 11 (6) of the Rules for Major Capital School Construction Projects regarding interest earned on investments.