What's in a FACCR?
Federal award compliance control records, or FACCRs, provide specific guidance to help auditors evaluate internal controls established to address the unique risks arising from ARRA funding. This guidance includes:
Who is required to enter data in the Ohio Stimulus Tracker
• Public school districts
• STEM schools
• Community schools
• Educational service centers
• Others found in the
Ohio Compliance Supplement
If the comic book hero Spider-Man was a certified public accountant rather than a science nerd, his motto might have been, “With great resources come great responsibility.”
That motto certainly rings true for a large number of local governments that continue to rely on funds from the American Recovery and Reinvestment Act of 2009 (ARRA).
According to Marnie Carlisle, senior audit manager with the Ohio Auditor of State’s Accounting & Auditing Support section, “The unprecedented level of federal funding that state and local governments are receiving under ARRA, and the speed with which these dollars must be spent, exponentially increases the risks of fraud, waste, abuse and noncompliance.”
Because of these substantial increases in funding and in risk, entities across Ohio have had to dedicate more resources in order to properly manage, monitor and account for federal awards – even while dealing with budget deficits and dwindling resources.
The Ohio Auditor of State’s Office is available to help entities meet new federal requirements and ensure ARRA funds are tracked and reported accurately, in full compliance with federal law.
For example, the Auditor of State’s Office was able to help schools develop separate accounting procedures for ARRA funds.
The Federal Accountability and Transparency Act and ARRA Title 1512 require all recipients of stimulus monies to separately track those revenues and expenditures, even when stimulus funds are received as part of a pre-existing federal program.
Because all schools in Ohio are required to use the same accounting system, the Ohio Auditor of State’s Office and the Ohio Department of Education were able to establish special cost centers to help schools track the ARRA portion of federal funds that the schools received.
The creation of special cost centers, a part of a school’s account code structure that divides specific funds, is a normal process. According to Jeff Wilchek, chief project manager for special projects in the Ohio Auditor of State’s Local Government Services section, the office does not typically specify which special cost centers should be used by school treasurers. However, specific guidelines have been provided in this case in order to assist schools with meeting ARRA requirements.
While these specific special cost centers only apply to schools, all local government entities that receive ARRA funds (directly or indirectly) should implement an accounting mechanism for separately tracking and identifying stimulus portions of programs and projects.
The Auditor of State’s Office is actively working to ensure that stimulus monies are tracked and spent appropriately. The Ohio Stimulus Tracker, a Web-based reference tool that can be accessed online at OhioStimulusTracker.com, was launched in 2009 to report how much federal stimulus money has been received by local governments in Ohio and the ways in which that money is spent.
State and local governments (with certain exceptions for specific state government entities) are required to report all stimulus receipts and expenditures in the Ohio Stimulus Tracker, whether those funds are received directly from a federal agency or are passed through a state agency.
Reporting of stimulus reimbursements into the Ohio Stimulus Tracker should occur within 10 business days of receiving the reimbursement. Additionally, local governments can report related stimulus expenditures at the same time as the reimbursement receipt is reported or within 10 days of the end of the calendar quarter.
The Auditor of State’s Office is using data entered into the Ohio Stimulus Tracker to conduct interim audit procedures throughout the state in order to help local governments mitigate the heightened risk of fraud due to receiving stimulus funds.
With the Ohio Stimulus Tracker, local governments also receive more immediate feedback on how they classify and spend stimulus monies.
For example, the Ohio Stimulus Tracker has a pre-populated list of CFDA (Catalog of Federal Domestic Assistance) numbers approved by ARRA. If an entity is using an outdated or inappropriate CFDA number to classify expenditures, entries in the Ohio Stimulus Tracker will not match up to the appropriate program and auditors will assist entities with finding the right classification number.
Additionally, Carlisle explained that auditors review all entries to the Ohio Stimulus Tracker for general allowability. While this is not a substitute for an audit, this check can help entities identify expenditure errors sooner than a regular financial audit.
ARRA grants have specific expenditures that are classified as either allowable or unallowable. For example, a school cannot use State Fiscal Stabilization Fund (SFSF) funds received through ARRA to pay for the school’s treasurer. Auditors checking entries to the Ohio Stimulus Tracker could identify the error and notify the entities, who can take immediate action to correct the problem.
The Auditor of State’s Office also provides specific guidance for local governments on how regular financial audits will address the unique requirements and risks presented by ARRA funds.
To assist in this process, the office has published several ARRA-specific federal award compliance control records (FACCRs), which are audit templates used for the performance of an A-133 single audit. FACCRs are intended to emphasize key points related to how auditors will conduct internal control testwork for major programs funded with ARRA awards.
These FACCRs include audit objectives, compliance requirements, general guidance for internal controls, specific control objectives and suggested audit procedures.
“FACCRs are a one-stop shop,” Carlisle said. “They are based on the OMB Compliance Supplement that outlines ARRA guidance and provides specific audit procedures that our auditors will use for ARRA funds.”
While many of the recent ARRA-specific FACCRs apply to specific types of entities, some could apply to any federal awards. For example, the FACCR on cross-cutting requirements includes information on what is considered an allowable or unallowable use of stimulus funds.
The American Recovery and Reinvestment Act of 2009 has indeed presented entities in Ohio with both resources and responsibilities. Fortunately, entities are not alone in a time of need for effective oversight. With resources and assistance from the Ohio Auditor of State’s Office, entities can tackle the challenges presented by ARRA and ensure Ohioans know their taxpayer dollars are handled with care in their home communities.