Updated 05/16/11... tm
Frequently Asked Questions
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.”
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.”
2. Are there examples of a zero balance MEDMS reconciliation and acceptable language and format for the Essential Programs and Services Funding Act?
Yes, please see the following documents for both: (MSFA Assurances Example and Zero Item MEDMS Recon Example)
3. 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 six (6) 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.
4. What are the penalties if a school administrative unit fails to meet Federal and State audit requirements, including submitting a Corrective Action Plan?
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-A (http://www.mainelegislature.org/legis/statutes/20-A/title20-Asec6801-A.html) (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.”
5. If the school administrative unit cannot meet the six month submission date for the State requirements, can the school administrative unit apply for an extension?
The school administrative unit may apply for an extension if it cannot meet the six (6) month State deadline for annual audits. (link to the extension form)
Federal Audit Requirements
1. What are DOE’s Federal audit requirements for school administrative units and private non-profit agencies?
Federal audit requirements for school administrative units and private non-profit agencies are found in http://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a133/a133.pdf – Audits of States, Local Governments, and Non-Profit Organizations or http://www.whitehouse.gov/omb .
Highlights of the Single Audit Process http://harvester.census.gov/fac/cfoBrochure2005.pdf
2. 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.
School Construction Audits
- 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.
- How should the Department be notified that a project is ready to be audited?
Complete Form EF-B-55B in XLS
Upon receipt of the report, Department audit staff will call and schedule a time for the audit.
- What should be done to prepare for the audit?
All records pertaining to the project should be made available for the Department auditor including
- Paid vendor invoices and corresponding warrants
- Bank and investment statements
- Canceled checks
- General ledger & general journal
- Approved original “Moveable Equipment List”
- Approved “Additional Moveable Equipment List”
- Cost statement(s) of temporary borrowing
- 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.
- 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.
- 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.
