2 AAC 45.010 - Audit requirements
(a) A state agency
that enters into a financial assistance agreement to provide financial
assistance to an entity shall, in coordination with any other state agencies
providing financial assistance to that entity, require that entity to submit to
the department an audit of the recipient entity if that entity is subject to an
audit under this section. The audit must be conducted and submitted as
described in this section. In order to ensure compliance with this subsection,
a state agency must include the audit requirements of this section in any
financial assistance agreement subject to this subsection.
(b) An entity that expends financial
assistance with a cumulative total of $750,000 or more during the entity's
fiscal year shall submit an audit report for the audit period to the
department, by
(1) the earlier of
(A) 30 days after the entity receives its
audit report for the audit period; or
(B) nine months after the end of the audit
period; or
(2) a later
date than the date calculated under (1) of this subsection, if
(A) the state agency that provides the
financial assistance agrees to the change of date; and
(B) the agreement under (A) of this paragraph
is made in
(i) writing; and
(ii) advance of the date calculated under (1)
of this subsection.
(c) An audit required by this section must be
conducted by an independent auditor, according to the following audit standards
effective at the time of review for the audit period:
(1)Government Auditing
Standards, July 2007 Revision, adopted by the comptroller general of
the United States, and adopted by reference;
(2) generally accepted auditing standards, as
accepted by the American Institute of Certified Public Accountants in the
Codification of Statements on Auditing Standards , January
2017 revision for the type of entity being audited, adopted by
reference;
(3)State of
Alaska Audit Guide and Compliance Supplement for State Single Audits,
May 2017 revision, prepared by the department, adopted by
reference.
(d) The audit
required under this section must report on the following:
(1) the system of internal controls of the
entity and the auditor's identification of significant deficiencies and
material weaknesses of the entity, using the applicable standards set out in
(c) of this section;
(2) the
entity's compliance with applicable state statutes and regulations and
applicable financial assistance agreements affecting the expenditure of the
financial assistance; the report must identify findings and known questioned
costs that exceed $5,000 in the aggregate for all transactions of expenditures
tested for the financial assistance being audited;
(3) the entity's financial
statements;
(4) the schedule of
state financial assistance;
(5) the
schedule of findings and questioned costs.
(e) As part of the audit report required
under this section, the entity must provide
(1) written comments on any
(A) findings;
(B) known questioned costs;
(C) significant deficiencies, including
material weaknesses; and
(D)
recommendations contained in the audit report;
(2) the entity's plan for corrective action,
if any findings are identified or any recommendations are made in the audit
report;
(3) the status of the
entity's implementation of any plans for corrective actions related to
(A) the audit reports required under this
section for the fiscal year before the audit period; and
(B) unresolved findings of audit reports
required by this section for audit periods before those specified in (A) of
this paragraph; and
(4)
a written explanation of the reasons why corrective action will not be taken if
the entity does not intend to take corrective action on the findings and
recommendations in any audit report required by this section.
(f) An audit report required under
this section need not evaluate the effectiveness of a program funded by
financial assistance. However, a program evaluation or financial monitoring may
be conducted by the state agency or requested of the entity by the state agency
that entered into the financial assistance agreement.
(g) An audit required by this section must
cover the entire operations of the entity.
(h) An entity shall provide the department
with sufficient copies of each audit report to allow submission of a copy to
each state agency providing financial assistance to the entity. The department
will determine if auditing standards have been met and will forward a copy of
the audit to the appropriate state agencies. The department will coordinate the
assignment of the resolution to one state agency, if the exceptions concern
more than one state agency. The applicable state agency providing financial
assistance to the entity must meet its responsibilities under other law for
ensuring compliance with the audit report.
(i) Unless additional audit requirements are
imposed by state or federal law, a state agency that provides financial
assistance to an entity shall accept the audit required by this section in
satisfaction of any other audit requirement. If additional audit work is
necessary to meet the needs of a state agency, the audit work must be based on
the audit required by this section. Nothing in this subsection authorizes a
state agency to seek payment from the entity for the additional audit
work.
(j) A third party that
receives financial assistance through an entity, in an amount described in this
section, is subject to the applicable requirements of this section. An entity
that disburses $750,000 or more in state financial assistance to a third party
shall ensure that the third party complies with the requirements of this
section. That entity shall also ensure that appropriate corrective action is
taken within six months after a third party's noncompliance with an applicable
state statute or regulation, or financial assistance agreement, is
disclosed.
(k) Repealed
7/1/98.
(l) For purposes of this
section, if an entity has not identified its fiscal year, that entity's fiscal
year is July 1 through June 30.
(m)
Financial assistance in the following form is not included when calculating
whether an entity meets the threshold monetary requirement under (b) of this
section:
(1) community revenue sharing money
provided under
AS
29.60.850-;
(2) repealed 3/31/2008;
(3) aviation fuel tax money provided under
AS
43.40.010;
(4) electric and telephone cooperative gross
revenue tax refunds provided under
AS
10.25.570;
(5) alcoholic beverage license fee refunds
provided under
AS
04.11.610;
(6) fisheries tax refunds provided under
AS
29.60.450,
AS
43.75.130, and
AS
43.77.060;
(7) PERS/TRS relief funding under money
appropriated to pay employer unfunded liability attributable to the entity
under AS 14.25 and AS 39.35;
(8)
money expended for projects that are solely managed, supervised, and controlled
by the Alaska Energy Authority under AS 44.83 and turned over to the grantee at
the conclusion of the project.
(n) Financial assistance in a form listed in
(m) of this section is not exempt from compliance testing if the entity meets
the threshold monetary requirement under (b) of this section.
(o) Repealed 7/1/98.
Notes
Authority:AS 37.05.020
AS 37.05.190
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