Questions on OAG
Statewide Single Audit of the State of
Information being provided to all Firms who requested RFP
Where are the files and supporting
documentation maintained for the single audit fieldwork –
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
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.
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
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.