Questions on OAG
Statewide Single Audit of the State of
Information being provided to all
Firms who requested RFP
1.
Where are the files and supporting
documentation maintained for the single audit fieldwork –
Response:
Certain information is currently available and located in the Chicago and
Springfield Offices (see item 11(b) on page 12 of the October 13, 2009 Request
for Proposals for those items. The OAG
address locations are located on the cover letter of the RFP No. 10-1. Audit work paper documentation is located at
KPMG LLP,
2.
How were the OAG staff utilized for
the single audit in the past (work associated with hours identified on page 14
of RFP)?
Response: RFP No. 10-1 is the first introduction of the
use of OAG staff performing actual fieldwork in the Statewide Single Audit
process. However, the OAG statewide
Single Audit Manager oversees the work performed by special assistant auditors,
reviews audit documentation, draft findings, draft report, etc. Further, some OAG staff are involved in the
final SEFA compilation process.
3.
Do the various state agencies
maintain and update documentation of internal controls over the 14 compliance
areas of the various grant programs awarded to their agencies? If not maintained by the agencies, is this
information maintained by the OAG or another agency? Please describe the format
of this documentation.
Response: Although each agency is responsible for
annual updating of internal controls and should have copies of the information
they submitted to our special assistant auditors (KPMG), the final documentation
of internal controls over the 14 compliance areas resides with KPMG. Any requests to review workpaper audit
documentation needs to be made to the Director of the Financial and Compliance
Audit Division at the Illinois Office of the Auditor General. The format is in Word documents and Excel
spreadsheets.
4.
Were there any challenges
encountered with the prior year (FY 08) or ongoing (FY 09) single audits? If
so, please describe.
Response: We are not sure if you can refer to them as
challenges since problems in an audit the size of the Statewide Single Audit in
the Illinois financial environment requires a flexible staffing with
appropriate level of expertise (as needed) to address a multitude of agency
issues that arise during this engagement.
These issues may be lack of staffing at the agency along with required
employee furlough days off, unseasoned employees, many internal and external
demands on employees, etc. Daily
priorities impact the availability and delivery of requested and follow-up
information. A review of the FY08 single
audit report will address past audit findings.
5. How many years has KPMG been performing the
single audit?
Response: KPMG has been the auditor on this engagement
since FY2000. The FY09 engagement is the
10th audit.
6.
Has the timeline established on
Pages 11-12 of the RFP been met in the last 3 completed audits (FY08, FY07,
FY06)? Specifically, the completion of fieldwork by November 25, draft report
by February 9, and final reports by March 12?
If not, please describe the circumstances and if similar circumstances
are expected for FY10.
Response: No.
The timeline as presented on pages 11-12 has been a challenge in
itself. The timeline is what is needed
to meet the federal filing deadline of March 31. The State of
7.
Please describe the process of
distributing audit findings and gathering agency responses. Specifically, has
the single audit firm coordinated this, or does the OAG office assist with the
coordination of this?
Response: There is no unique process applicable to the
statewide single audit findings. See
Chapter 24 of the Office of the Auditor General’s Audit Guide for the process
applicable to audit findings. A copy of
the OAG Audit Guide is being mailed to all firms who requested this RFP. The process is coordinated by our special
assistant auditors. The lack of an
adequate central grant accounting system provides for interesting presentation
and criteria to support development of the finding(s) by agency applicable to
the Schedule of Expenditures of Federal Awards and its relationship to the
State’s Comprehensive Annual Financial Report.
8.
Page 14 of the RFP states that the
contractor will be responsible to help facilitate and coordinate the
compilation of a “corrective action plan”. Please describe how this process has
worked in the past. Has the contractor been successful in obtaining all
responses in a timely manner from state agencies?
Response: Since there is no central grant accounting
system agency, the Governor’s Office of Management and Budget has assumed the
role of the “filer” of the Data Collection Form (DCF) package which includes
the Corrective Action Plan and other required documents with the Federal Audit
Clearinghouse. Also, with the enhanced
electronic filing that has been implemented by the Federal government for the
annual filing which contains the Corrective Action Plan, we have found it
advantageous for the audit firm to take the lead role in collecting the needed
data and transmitting the data to the Federal Audit Clearinghouse. The statewide Single Audit manager works with
the individual agencies to compile the statewide Corrective Action Plan for
transmission to the statewide single audit firm to attach to the DCF package
for filing.
9.
Bottom of page 14 and top of page 15
of RFP – Describes that OAG staff will be available to participate in the
contractor’s sponsored single audit training and instruction. Is this referring
to the contract firm’s internal staff training, or is there an expectation that
the audit firm will conduct a training course specifically for OAG or state
agencies?
Response:
This Office anticipates that the successful firm will need to provide
training and updating to its internal audit staff annually in the requirements,
especially current changes in OMB Circular A-133 Compliance Supplement. Since the RFP states that resources of 1,800
hours by OAG staff are committed to assist in the audit work they should
document their work efforts similar to the firm’s staff members. Thus, it is this Office’s position that we
would anticipate the need to make the OAG staff be available to the firm in its
need to inform (or train) the OAG audit staff in its audit plan and audit
program approach and related documentation and review practices, etc in their
assignments. In summary, OAG staff would
participate in firm’s internal staff training.
10. Page 14 of RFP discusses
contractor’s responsibility to participate in the cognizant agency’s quality control
review of the workpapers, if one is conducted. Has a quality review been
conducted by the cognizant agency in the last 3 years? If so, approximately how many hours were
spent by the contractor participating in this review?
Response: With the implementation of the Statewide
Single Audit in FY2000, the cognizant agency has conducted two QCR’s (i.e.
about every fourth year). The QCR is
composed of approximately 5 to 6 federal inspector general offices and lasts
approximately 7 to 10 working days. The
amount of time spent by the firm in this effort has not been separately
reported but would vary from one QCR to another.
11. Page 14 of RFP – PHI Section –
identifies that OAG has implemented certain procedures and governing PHI which
the engagement partner and OAG manager must complete and file with OAG’s legal
counsel. Please describe these procedures. Also, if there are forms to be
signed by the engagement partner related these procedures, please provide a
copy.
Response: This information is enclosed as an
attachment.
12. Page 15 of RFP– Attendance at LAC hearings –
when do the LAC hearings typically occur (which months of the year)? Approximately how many LAC hearings did the
contracting firm’s representative attend for the FY08 and FY07 audits?
Response: LAC meetings are held approximately
8-9 times a year. The meetings are held
in either
13. Page 15 of RFP – Major Program
Selection Process – The late identification of additional Type A programs is
understandable. We would also anticipate that ARRA expenditures will have a
significant impact on major program determination. When is a reasonably
accurate estimate of ARRA expenditures by CFDA number anticipated to be
available for the FY10 audit?
Response: FY10 information will most likely be available by the end of
November 2010. We currently anticipate
an approximate 8 additional programs to be audited in FY10 due to ARRA;
however, this number could change.
14. Do you currently have any estimates
of ARRA expenditures, by CFDA number, for FY10 that we could obtain to help us
properly scope this audit?
Response: Yes, however, it is preliminary in
nature and for planning purposes only. Summary
information on anticipated Type A programs (i.e. over $30 million) is an
appendix (11-a-2) to the RFP.
15. Other than ARRA awards, are there
any other significant changes in Type A programs expected for FY10?
Response: No, most Type A programs have been
consistent over the years. We expect
perhaps +/- 3 programs each year.
16. Page 15 of RFP – AUP Letters – Just
to confirm our understanding of the AUP letters, it appears these are prepared
by separate contractors (not OAG staff or the single audit contractor)?
Response: It could be a combination of both
OAG staff and other special assistant auditors.
The AUP letters are prepared by either OAG staff or special assistant
auditors performing work for the Auditor General’s Office for those agencies
expending federal funds. The AUP work is
performed on SCO 563, 567 and 568 forms agencies file with the State
Comptroller as part of their year-end GAAP Accounting forms.
17. Page 16 of RFP– State Revolving
Funds and SWICAP Testing – will there be any separate report required to be
issued in connection with the testing of the indirect cost plan described in
this section?
Response: No, a separate report will not be required.
18. Has the State made a decision on
whether to participate in the expedited reporting of internal control matters
pilot? We understand the Federal
Government was asking for States to identify their intention to participate by
October 16, 2009. It was noted on page 16 of your RFP that a decision on
whether to participate had not been made as of October 13, 2009.
Response: Yes, a decision has been made. At this time, the State of
19. Section 1.12 of the RFP indicates
that the “Auditor General Procurement Rules” can be obtained by contacting the
project contact. We would like to obtain these rules please.
Response: This information is enclosed as an attachment.
20. Page 10 of the RFP indicates the
Audit Guide for Performing Financial Audits and Compliance Attestation
Engagements of Illinois State Agencies (“Audit Guide”) may be obtained upon
request. We would like to obtain this please.
Response: This information is enclosed as an attachment.
21. When is the preliminary Schedule of
Expenditures of Federal Awards (SEFA) typically available and who is
responsible for preparing it? What is the process for making revisions to the
SEFA (frequency, significance, who provides them)?
Response: The data file used to prepare the SEFA is
provided by the State Comptroller’s Office in late November/December. Currently, the OAG staff makes the final SEFA
compilation and makes any material adjustments needed based on review of the
AUP’s discussed above (question #16). In
addition, the OAG statewide single audit manager sends out a confirmation to
each agency regarding expenditures per program, CFDA #, etc.
22. Does OAG assist the auditors with
risk assessments for Type A and Type B programs? What is the process that is
used?
Response: No, the OAG does not assist the special
assistant auditors with the risk assessments for Type A and B programs. This is done by the primary auditor following
all applicable standards and related guidance.
23. Are the number and type of findings
generally consistent from year to year? Do state agencies place a high priority
on remedying their respective findings?
Response: In the past 4 years, the number of
findings has been 101 in FY05, 95 in FY06, 87 in FY07, and 97 in FY08. Numerous findings are repeated from year to
year. A review of the FY08 Single Audit
Findings will reflect whether the findings are repeated and if so the past
audits where the finding appears.
24. Please describe the working
relationship between the following parties (amicable, contentious, cooperative,
indifferent, etc):
a.
Audit firm and state agencies
b.
Audit firm and OAG
c.
OAG and state agencies
Response:
Overall, the working relationship between all parties has been
amicable and cooperative. However, at
times based on discussion of various issues, we have agreed to disagree with
certain State agencies. Some audit
findings contain an auditor’s comment which addresses the auditor position in
these situations.
25. How have federal granting agencies
responded to the findings reported in recent years?
Response: The federal granting agencies have been slow
to respond in most instances, however, when they have responded they have been
accepting of the audit findings.