Recovery Act Resource Center

The AICPA Governmental Audit Quality Center (GAQC) helps member CPA firms meet the challenges of performing quality audits.  The passage of the American Recovery and Reinvestment Act of 2009 (Recovery Act) is certain to result in new challenges for auditors that perform audits under Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.   This GAQC Resource Center is intended to provide members with a “one-stop” repository location to more easily locate various GAQC Recovery Act communications, other related GAQC tools and resources, and links to other Web sites that may provide information to assist auditors going forward.  Keep in mind that the Center will continue to push timely information and updates out to member firms via GAQC Alerts, GAQC Updates, and Center calls.

If you are not a member firm and would like to learn more about membership in the GAQC, click here.

Background

GAQC Tools

OMB Guidance on the Recovery Act

Other Useful Web Sites, Tools, and Information

Background

The Recovery Act, issued in early 2009, is capturing news headlines around the country.  Approximately $300 billion dollars in additional federal funds are being passed down from federal agencies to entities that are generally subject to single audit such as state and local governments and institutions of higher education. These federal funds are intended to either supplement existing federal programs (e.g., existing block grants for states), create new programs, or to provide more broad fiscal relief. In some cases, the funds will be passed directly to states or institutions of higher education and spent at that level. In other cases, direct recipients of Recovery Act federal funds will pass the funds through to subrecipients such as local governments or not-for-profit organizations.   For this reason, the law mandates that there be an unprecedented amount of oversight and transparency around the spending of all funds associated with the law. Single audits will be impacted starting with June 30, 2009, year-ends, with more of an effect expected for single audits of year-ends thereafter.  

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GAQC Tools

The following is a list of tools being offered by the GAQC, as well as a summary of communications that the Center has issued to member firms regarding the Recovery Act. Some of these tools are open and available to the general public as a public service. 

Archived Center Conference Calls

·         NEW This archived Governmental Audit Quality Center (GAQC) member-only conference call titled, The Recovery Act: A Practitioner's Perspective, was presented by panel of CPA practitioners and moderated by Mary Foelster of the AICPA.  The GAQC held this call to provide you with another resource to help your firm better understand the implications of Recovery Act funds to your clients and your single audits. To date, the GAQC has issued a number of GAQC Alerts and other resources on this topic area. With so much information on the Recovery Act and the rate at which guidance is being issued, we thought it important for members to have the opportunity to hear how other practitioners with clients affected by the Recovery Act have been addressing some of the related challenges.  Whether you are an auditor in the midst of performing a June 30th single audit with Recovery Act considerations or you have clients that have not yet received Recovery Act funds but will in the future, this call should be of interest to you. Click here to listen to the call and to download the slides.

·         In June 2009, the Center held a call titled, The Recovery Act and Its Potential Impact on 2009 Single Audits, which is available in an archived format.  The purpose of the call was to provide auditors with Recovery Act information for both the purpose of communicating with clients, as well as understanding the implications for June 30, 2009, single audits and in the future. The call, led by three federal presenters that included representatives from the Office of Management and Budget and federal Inspectors General offices, was extremely informative.  It included two walk-through exercises to illustrate the impact of the Recovery Act on major program determination, as well as a question and answer session that included many practical questions from practitioners. Click here to listen to the call and to download the slides and related handouts.

Archived GAQC Alerts 

·         NEW GAQC Alert #123, sent on September 11, 2009, provides readers with updated information that the OMB has asked us to relay to GAQC members relating to major program determination when an entity has expended funds received under the American Recovery and Reinvestment Act of 2009 (the Recovery Act). After reading this Alert you will be aware of: (1) The federal government's latest thinking on the effect on major program determination when Type A programs that have both Recovery Act and non-Recovery Act expenditures. Keep in mind that this information could affect your June 30, 2009, single audits that may already be underway, and your future single audits; (2) Other recent Recovery Act activities including a Senate oversight hearing held September 10, 2009; and (3) Recovery Act resources available to you on the GAQC Web site.

·          GAQC Alert #118, sent on August 6, 2009, and informs members that the Office of Management Budget (OMB) issued the long awaited addendum to the March 2009 Compliance Supplement titled, Compliance Supplement Addendum #1 (the Addendum) on August 5. The purpose of GAQC Alert #118 is to provide members with information about the Addendum that you need to be aware of and also other recent activities relating to the Recovery Act. Click here to view this GAQC Alert.

·         GAQC Alert #112, sent on May 26, 2009, provided members with the new Appendix VII of the 2009 OMB Circular A-133 Compliance Supplement, which includes information and guidance for auditors on the Recovery Act.  The Alert discusses the Appendix and its implications on audits performed under Circular A-133.  You will also find information on the other changes made to the 2009 Compliance Supplement.  Click here to view this GAQC Alert.

·         GAQC Alert #111, sent on May 19, 2009, provided the latest OMB guidance issued on the Recovery Act; a summary of the Government Accountability Office (GAO) Recovery Act Report, and an update on what auditors can expect going forward. Click here to view this GAQC Alert.

·         GAQC Alert #106, sent on March 16, 2009, provided background on the Recovery Act, initial information on the first round of OMB Recovery Act guidance, and the potential implications for single audits.  Click here to view this GAQC Alert.

Other GAQC Recovery Act Tools

·         Click here to access nonauthoritative examples to illustrate the impact of the Recovery Act on planning a single audit and major program determination.

·         Click here to access client Recovery Act talking points for auditors to use with clients, even with those that have not yet received Recovery Act funds but likely will in the future.

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OMB Guidance on the Recovery Act

The OMB has issued various documents that provide guidance to auditors and program managers.  Below is a list of guidance issued thus far by OMB that should be of interest to auditors, starting with the latest documents:

·         New OMB's Compliance Supplement Addendum #1 to the March 2009 Compliance Supplement is effective for audits of fiscal years beginning after June 30, 2008 (that is, for your June 30, 2009, single audits and year-ends thereafter), where your clients have expended Recovery Act funds.  It should be used in conjunction with other Parts and Appendices of the Compliance Supplement in determining the appropriate audit procedures to support the auditor's opinion on compliance for each major program with expenditures of Recovery Act awards. The guidance in Part 5, Clusters of Programs, of the Addendum includes critical information on how Recovery Act programs are to be clustered which will have an effect on your major program determination process. You should also read GAQC Alert #118 for a summary of Recovery Act guidance included in Compliance Supplement Addendum #1.

·         Implementing Guidance for the Reports on Use of Funds Pursuant to the Recovery Act (issued June 22, 2009): http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-21.pdf

o    Supplement 1, List of Programs Subject to Recipient Reporting

o    Supplement 2, Recipient Reporting Data Model

·         The 2009 OMB Circular A-133 Compliance Supplement, issued on May 26, 2009, (and dated March 2009) with a new Appendix VII, which includes information and guidance for auditors on the Recovery Act and its implications on audits performed under Circular A-133. It is effective for audits of fiscal years beginning after June 30, 2008: http://www.whitehouse.gov/omb/circulars_a133_compliance_09toc/

o    Also see GAQC Alert #112

·         M-09-18, Payments to State Grantees for Administrative Costs of Recovery Act Activities (issued May 11, 2009)

·         Follow-Up OMB Implementing Guidance at (issued April 3, 2009): http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-15.pdf

o    Also see GAQC Alert #111

·          Initial Implementing Guidance at (issued February 18, 2009): http://www.whitehouse.gov/omb/assets/memoranda_fy2009/m09-10.pdf

o    Also see GAQC Alert #106

·         Frequently Asked Questions (FAQ) on OMB Recovery Act Guidance:  http://www.whitehouse.gov/omb/recovery_faqs/

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Other Useful Web Sites, Tools, and Information

·         The U.S. Government's official Recovery Act Web site is located at: http://www.recovery.gov/

·         The Recovery Accountability and Transparency Board Nationwide Data Collection System is located at (note that this is the location that auditees will submit required reporting beginning with the September 30, 2009, reporting that is due on October 10, 2009):  http://www.federalreporting.gov/

·         The GAO Recovery Act Web site is located at: http://www.gao.gov/recovery/

·         The OMB Web site on Grants, Circular A-133, the Compliance Supplement, and the Recovery Act is located at (note that addendums to the Compliance Supplement will be posted to this Web site): http://www.whitehouse.gov/omb/grants_default/

o    Click here to view Appendix VII of the 2009 Compliance Supplement as issued in the March 2009 version of the Supplement.

o    Click here to view Frequently Asked Questions on the Recovery Act prepared by OMB for citizens and federal agencies.

o    Click here to link to a location on www.recovery.gov that will connect you to various federal agency Recovery Web sites.

·         Electronic Code of Federal Regulations: For purposes of identifying Recovery Act program requirements, the Electronic Code of Federal Regulations (e-CFR) is a currently updated version of the Code of Federal Regulations (CFR) that might prove useful. Although not an official legal edition of the CFR, it is an editorial compilation of CFR material and Federal Register amendments produced by the National Archives and Records Administration's Office of the Federal Register (OFR) and the Government Printing Office. The OFR updates the material in the e-CFR on a daily basis. The current update status appears at the top of all e-CFR web pages. http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&tpl=%2Findex.tpl

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