+-----------+--------------------------------+----+------------------+
| **Guide   |                                |    |                  |
| for       |                                |    |                  |
| Review of |                                |    |                  |
| HOPWA     |                                |    |                  |
| Financial |                                |    |                  |
| Man       |                                |    |                  |
| agement** |                                |    |                  |
+-----------+--------------------------------+----+------------------+
| **Name of |                                |    |                  |
| Program   |                                |    |                  |
| Parti     |                                |    |                  |
| cipant:** |                                |    |                  |
|           |                                |    |                  |
| **     ** |                                |    |                  |
+-----------+--------------------------------+----+------------------+
| **Staff   |                                |    |                  |
| Con       |                                |    |                  |
| sulted:** |                                |    |                  |
|           |                                |    |                  |
| **     ** |                                |    |                  |
+-----------+--------------------------------+----+------------------+
| **Name(s) |                                | ** |                  |
| of        |                                | Da |                  |
| Revi      |                                | te |                  |
| ewer(s)** |                                | ** |                  |
+-----------+--------------------------------+----+------------------+

**NOTE:** All questions that address requirements contain the citation
for the source of the requirement (statute, regulation, NOFA, or grant
agreement). Except for questions 20 and 40, if the requirement is not
met, HUD must make a finding of noncompliance. All other questions
(questions that do not contain the citation for the requirement) do not
address requirements, but are included to assist the reviewer in
understanding the participant\'s program more fully and/or to identify
issues that, if not properly addressed, could result in deficient
performance. Negative conclusions to these questions may result in a
\"concern\" being raised, but not a **\"finding.**\"

**[Instructions]{.underline}:** This Exhibit is designed to monitor a
program participant's conformity to financial management requirements.
The HOPWA program participant's financial management system is to be
reviewed for compliance with 24 CFR Part 84 (for grants made to
nonprofit organizations or institutions of higher education) or 24 CFR
Part 85 (for grants made to states and units of local government). The
Exhibit is divided into eight sections: Financial Management System;
Advances; Internal Controls; Accuracy of Report Information; Salaries
and Wages; Indirect Costs; Minority-Owned Financial Institutions; and
OMB Circular A-133. Additional instructions for a review of compliance
with OMB Circular A-133 are provided on a worksheet in Section IX. The
sampling guidance in Section 10-5 of the introduction to this Chapter
should be followed in selecting financial transactions to review.

**[Questions:]{.underline}**

A. [Financial Management System]{.underline}

1\.

+------------------------------------------------------------+---------+
| Does the program participant have written procedures       |         |
| covering the recording of transactions, an accounting      |         |
| manual and a chart of accounts or other documentation of   |         |
| proper accounting?                                         |         |
|                                                            |         |
| \[24 CFR 574.450\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

2\.

+------------------------------------------------------------+---------+
| Does the program participant maintain a policy manual or   |         |
| other written procedures covering the authority for        |         |
| approving financial transactions?                          |         |
|                                                            |         |
| \[24 CFR 574.450\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

3\.

+------------------------------------------------------------+---------+
| Does the program participant identify expenditures in its  |         |
| accounting records according to eligible activities        |         |
| identified in the approved Consolidated Plan or approved   |         |
| competitive applications?                                  |         |
|                                                            |         |
| \[24 CFR 91.220 for units of local government; 24 CFR      |         |
| 91.320 for states; 24 CFR 574.240 for competitive grants\] |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

4\.

+------------------------------------------------------------+---------+
| Do the fiscal records indicate evidence that the program   |         |
| participant has effective internal control and             |         |
| accountability of all grant funds, property and other      |         |
| assets?                                                    |         |
|                                                            |         |
| \[24 CFR 574.450\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

5\.

+------------------------------------------------------------+---------+
| Does a review of the sample transaction records indicate   |         |
| that grant expenditures were eligible costs under          |         |
| regulations?                                               |         |
|                                                            |         |
| \[24 CFR 574.300(b)\]                                      |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

6\.

+----------------------------------------------------------+-----------+
| If the program participant draws down HOPWA funds on an  |           |
| advance basis, do the financial records reveal that      |           |
| payments made for eligible costs occurred within three   |           |
| business days of the deposit of grant funds?             |           |
|                                                          |           |
| \[24 CFR 574.605 and 24 CFR 84.22 or 24 CFR 85.23, as    |           |
| applicable\]                                             |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

7\.

+------------------------------------------------------------+---------+
| Are the financial transactions drawn for this review       |         |
| supported by adequate source documentation, e.g.,          |         |
| invoices, contracts, or purchase orders?                   |         |
|                                                            |         |
| \[24 CFR 574.605 and 24 CFR 84.22 or 24 CFR 85.23, as      |         |
| applicable \]                                              |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

8\.

+------------------------------------------------------------+---------+
| Does the program participant identify expenditures by:     |         |
|                                                            |         |
| -   specific grant for approved projects for               |         |
|     [formula]{.underline} grants; or                       |         |
|                                                            |         |
| -   by approved budget line items for                      |         |
|     [competitive]{.underline} grants?                      |         |
|                                                            |         |
|     \[24 CFR 574.605, 24 CFR 84.21(b)(2) or 85.20(b)(2),   |         |
|     as applicable\]                                        |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

9\.

+------------------------------------------------------------+---------+
| Do accounting records include unexpended/unobligated       |         |
| balances?                                                  |         |
|                                                            |         |
| \[24 574.605, 24 CFR 84.21(b)(2) or 24 CFR 85.20(b)(2), as |         |
| applicable\]                                               |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

B. [Advances]{.underline}

10\.

+----------------------------------------------------------+-----------+
| If the program participant requests funds in advance     |           |
| (and not on a reimbursement basis), does the participant |           |
| minimize the time elapsed between the transfer of funds  |           |
| from the U.S. Treasury and disbursement by the           |           |
| participant?                                             |           |
|                                                          |           |
| \[24 CFR 574.605 and 24 CFR 84.22(a) or 24 CFR 85.21(b), |           |
| as applicable\]                                          |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion**                        |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

11\.

+----------------------------------------------------------+-----------+
| a\. Does the participant submit the SF-272, Federal Cash |           |
| Transactions Report?                                     |           |
|                                                          |           |
| \[24 CFR 574.605 and 24 CFR 84.52(a)(2) or 24 CFR        |           |
| 85.41(c), as applicable\]                                |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

+----------------------------------------------------------+-----------+
| b\. If the answer to "a" above is "yes," has the         |           |
| participant submitted timely and complete reports in the |           |
| SF-272 for the last 3 reporting periods?                 |           |
|                                                          |           |
| \[24 CFR 574.605 and 24 CFR 84.52(a)(2) or 24 CFR        |           |
| 85.41(c)(4), as applicable\]                             |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

  ---------------------------------------------------------- ------------
  c\. In its review of these reports, has HUD identified any 
  problems where cash advances have been received and held   
  in excess of three days?                                   

  **Describe Basis for Conclusion:**                         

                                                             
  ---------------------------------------------------------- ------------

12\.

+----------------------------------------------------------+-----------+
| If grant advances are deposited into an interest-bearing |           |
| account, what provisions been made for return of         |           |
| interest income to HUD?                                  |           |
|                                                          |           |
| \[24 CFR 574.605 and 24 CFR 84.22(l) or 24 CFR 85.21(i), |           |
| as applicable\]                                          |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

C. [Internal Controls]{.underline} (Reference for some of the questions:
GAO/AIMD-98-21.2.1, "Framework for Federal Financial Management System
Checklist," May 1998)

13\.

+------------------------------------------------------------+---------+
| a\. Does the program participant have an organization      |         |
| office staffing chart that sets forth the actual lines of  |         |
| responsibility?                                            |         |
|                                                            |         |
| \[24 CFR 574.605\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| b\. Are duties for key employees of the program            |         |
| participant defined so that financial transaction          |         |
| principles for separation of duties are likely to be       |         |
| followed?                                                  |         |
|                                                            |         |
| \[24 CFR 574.605 and 24 CFR 85.20, as applicable\]         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| c\. Has the program participant obtained fidelity bond     |         |
| coverage for responsible officials?                        |         |
|                                                            |         |
| \[24 CFR 574.605\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| d\. Does the program participant's chart of accounts       |         |
| include a complete listing of the account numbers used to  |         |
| support the control needed to ensure that resources used   |         |
| do not exceed resources authorized?                        |         |
|                                                            |         |
| \[24 CFR 574.605\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| e\. Does the program participant's approval controls       |         |
| provide reasonable assurance that appropriate individuals  |         |
| approve recorded transactions in accordance with           |         |
| management's general or specific criteria?                 |         |
|                                                            |         |
| \[24 CFR 574.605\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| f\. Does the program participant's controls over the       |         |
| design and use of documents and records provide reasonable |         |
| assurance that transactions and events are properly        |         |
| documented, recorded, and auditable?                       |         |
|                                                            |         |
| \[24 CFR 574.605\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
|                                                            |         |
| **     **                                                  |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| g\. Does the program participant's segregation of duties   |         |
| controls effectively reduce the opportunity for someone to |         |
| perpetrate or conceal errors or irregularities in the      |         |
| normal course of duties?                                   |         |
|                                                            |         |
| \[24 CFR 574.605\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| h\. Is it clear that all personnel are responsible for     |         |
| communicating upward the program participant's operating   |         |
| problems and noncompliance with laws and regulations?      |         |
|                                                            |         |
| \[24 CFR 574.605\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| i\. Does the program participant's internal control        |         |
| procedures support its ability to prepare financial        |         |
| statements that are fairly presented in conformity with    |         |
| generally accepted or other relevant and appropriate       |         |
| accounting principles and regulatory requirements? (One    |         |
| level of assurance of the accuracy and integrity of data   |         |
| is provided by the attainment of an unqualified opinion on |         |
| the audited annual financial statements and internal       |         |
| controls.)                                                 |         |
|                                                            |         |
| \[24 CFR 574.605\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

D. [Accuracy of Report Information]{.underline}

14\.

+-----------------------------------------------------------------------+
| a\. How does the program participant demonstrate that its systems     |
| and/or procedures ensure that accurate information is collected and   |
| reported to HUD and that such systems and/or procedures comply with   |
| Federal policies and requirements governing reporting?                |
|                                                                       |
| \[24 CFR 91.520, 24 CFR 574.450 and 24 CFR 574.520\]                  |
+-----------------------------------------------------------------------+
| **Describe Basis for Conclusion:**                                    |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+

+------------------------------------------------------------+---------+
| b\. Does the financial information (e.g., drawdowns,       |         |
| unexpended balances) recorded in HUD's financial           |         |
| management systems (e.g., LOCCS, IDIS) match the official  |         |
| accounting records of the program participant for the      |         |
| period covered by the last CPD-required performance        |         |
| report?                                                    |         |
|                                                            |         |
| \[24 CFR 91.520, 24 CFR 574.450 and 24 CFR 574.520\]       |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| c\. Does the program income information in the program     |         |
| participant's official accounting records for the period   |         |
| covered by the most recently completed performance report  |         |
| match the performance report information?                  |         |
|                                                            |         |
| \[24 CFR 91.520, 24 CFR 574.450 and 24 CFR 574.520\]       |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

15\.

+----------------------------------------------------------+-----------+
| a\. Does the program participant have a system for       |           |
| tracking program income generated by subrecipients or    |           |
| other entities to which funds are passed through?        |           |
|                                                          |           |
| \[24 CFR 574.605, 24 CFR 24 CFR 84.21(b)(3) or 24 CFR    |           |
| 85.20(b)(3), as applicable\]                             |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

  ---------------------------------------------------------- ------------
  b\. If program income is retained by the subrecipient or   
  pass-through entity, does the program participant have a   
  system for ensuring that such income is reported in a      
  timely and accurate manner?                                

  **Describe Basis for Conclusion:**                         

                                                             
  ---------------------------------------------------------- ------------

+----------------------------------------------------------+-----------+
| c\. Upon expiration of any agreements between the        |           |
| participant and the subrecipient and/or pass-through     |           |
| entity, does the participant have a system for ensuring: |           |
|                                                          |           |
| i.  the timely and accurate transfer of any funds to be  |           |
|     returned to the participant; and/or                  |           |
|                                                          |           |
| ii. the time and accurate transfer of outstanding loans  |           |
|     or accounts receivable?                              |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

E. [Salaries and Wages]{.underline}

16\.

+----------------------------------------------------------+-----------+
| Are charges to the HOPWA program for salaries and wages, |           |
| whether treated as direct or indirect costs, consistent  |           |
| with the generally accepted policies or practices of the |           |
| governmental unit or organization and approved by a      |           |
| responsible official(s)?                                 |           |
|                                                          |           |
| \[24 C FR 574.605, OMB Circular A-87, Attachment B,      |           |
| #8(h)(3), or OMB Circular A-122, Attachment B, #8(m)\]   |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

17\.

+----------------------------------------------------------+-----------+
| a\. For employees working solely on the HOPWA program,   |           |
| are charges for their salaries and wages supported by    |           |
| periodic certifications or reports that the employees    |           |
| worked solely on that program for the period covered by  |           |
| the certification or report?                             |           |
|                                                          |           |
| \[24 CFR 574.605, OMB Circular A-87, Attachment B,       |           |
| #8(h)(3), or OMB Circular A-122, Attachment B, #8(m)\]   |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

+------------------------------------------------------------+---------+
| b\. Were the certifications or reports prepared at least   |         |
| semi-annually and signed by the employee or a supervisory  |         |
| official having first hand knowledge of the work performed |         |
| by the employee?                                           |         |
|                                                            |         |
| \[24 CFR 574.605, OMB Circular A-87, Attachment B, Section |         |
| 8(h)(3), OMB Circular A-122, Attachment B, Section 8(m)\]  |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| c\. For employees working on multiple activities or cost   |         |
| objectives, are charges for their salaries and wages       |         |
| supported by personnel activity reports or equivalent      |         |
| documentation, which meet the requirements of the          |         |
| Circular?                                                  |         |
|                                                            |         |
| \[24 CFR 574.605, OMB Circular A-87, Attachment B, Section |         |
| 8(h)(3), OMB Circular A-122, Attachment B, Section 8(m)\]  |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

F. [Indirect Costs]{.underline}

18\.

  ------------------------------------------------------------- ---------
  a\. Are indirect costs charged to the program?                

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

+----------------------------------------------------------+-----------+
| b\. If indirect costs are charged to the program, have   |           |
| Cost Allocation Plans and/or an Indirect Cost Rate       |           |
| proposal been developed in accordance with OMB Circular  |           |
| A-87, Attachment A, Section F (for units of state and    |           |
| local government) or OMB Circular A-122, Attachment A,   |           |
| Section C (for nonprofit organizations), or OMB Circular |           |
| A-21, J.8 (for institutions of higher education)?        |           |
|                                                          |           |
| \[24 CFR 574.605\]                                       |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

+----------------------------------------------------------+-----------+
| c\. Is there any evidence to indicate that costs are not |           |
| being billed in accordance with the Indirect Cost Rate?  |           |
|                                                          |           |
| \[24 CFR 574.605; OMB Circular A-87, Attachment A,       |           |
| Section F, or OMB Circular A-122, Attachment A, Section  |           |
| C, or OMB Circular A-21, J.8\]                           |           |
+----------------------------------------------------------+-----------+
| **Describe Basis for Conclusion:**                       |           |
+----------------------------------------------------------+-----------+
|                                                          |           |
+----------------------------------------------------------+-----------+

G. [Minority-Owned Financial Institutions]{.underline}

19\.

+------------------------------------------------------------+---------+
| Has the program participant used minority-owned financial  |         |
| institutions in conjunction with the grant program?        |         |
|                                                            |         |
| (**Note**: Because program participants are [not           |         |
| required]{.underline} to use minority-owned financial      |         |
| institutions, they are encouraged to do so pursuant to 24  |         |
| CFR Section 84.22(j) and 85.21(h), a "No" response to this |         |
| question would **NOT** constitute a finding.)              |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

H. [OMB Circular A-133: Audits of States, Local Governments, and
Non-Profit Organizations]{.underline}

**[Instructions]{.underline}:** Program participants under many CPD
programs are subject to OMB Circular A-133, which establishes audit
requirements pursuant to the Single Audit Act Amendments of 1996 for
states, local governments, and non-profit organizations that receive
Federal aid. The Circular defines responsibilities for implementing and
monitoring those requirements. Program participants that, in turn,
provide Federal funds to secondary organizations are called pass-through
entities. For simplification purposes, the term "subrecipient" will be
used in this guide to refer to all such secondary organizations.
Pass-through entities are required by OMB A-133, §\_\_\_.400(d) to
establish systems to oversee subrecipient compliance with A-133. This
section of the Exhibit is designed to assist in determining whether the
participant is in compliance with the required elements of an audits
management system. An audits management review worksheet is attached to
help document the results from testing a sample of grants to
subrecipients against the participant's control system.

20\.

  ------------------------------------------------------------- ---------
  Does the program participant meet the threshold, or have any  
  subrecipients that meet the threshold, for having a single    
  audit performed? If no, stop here.                            

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

21\.

+-----------------------------------------------------------------------+
| What is the program participant's means of ensuring that audits are   |
| conducted to meet all of the following:                               |
|                                                                       |
| a.  at the proper time? \[OMB Circular A-133, §\_\_\_.320(a)\]        |
|                                                                       |
| b.  by independent, qualified personnel? \[OMB Circular A-133,        |
|     §\_\_\_.305\]                                                     |
|                                                                       |
| c.  In a manner which meets the Comptroller General's audit           |
|     standards? \[OMB Circular A-133, §\_\_\_.500\]                    |
|                                                                       |
|     \[24 CFR 574.650\]                                                |
+-----------------------------------------------------------------------+
| **Describe Basis for Conclusion:**                                    |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+

22\.

+------------------------------------------------------------+---------+
| a\. Does the program participant's audit report include an |         |
| opinion on whether the financial statements are presented  |         |
| fairly in all material aspects in conformity with GAAP and |         |
| whether the schedule of expenditures is presented fairly   |         |
| in all material respects?                                  |         |
|                                                            |         |
| \[24 CFR 574.650, OMB Circular A-133, §\_\_\_.310(a)\]     |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

+------------------------------------------------------------+---------+
| b\. Do the program participant's financial statements      |         |
| reflect its financial position, results of operations or   |         |
| changes in net assets and, where appropriate, cash flows   |         |
| for the fiscal year?                                       |         |
|                                                            |         |
| \[24 CFR 574.650, OMB Circular A-133, §\_\_\_.310(a)\]     |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

23\.

+-----------------------------------------------------------------------+
| a\. What is the program participant's procedure for informing         |
| subrecipients of the OMB Circular A-133 audit requirements?           |
|                                                                       |
| \[24 CFR 574.605, OMB Circular A-133, §\_\_\_.400(d)(2)\]             |
+-----------------------------------------------------------------------+
| **Describe Basis for Conclusion:**                                    |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+

  ------------------------------------------------------------- ---------
  b\. Has the program participant determined if subrecipients   
  expending \$300,000 or more in Federal awards in the fiscal   
  year \[\$500,000 or more for fiscal years ending after        
  December 31, 2003\] met the requirements of OMB Circular      
  A-133?                                                        

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

24\.

  ------------------------------------------------------------- ---------
  a\. Are the financial statements of subrecipients presented   
  fairly in all material respects in conformity with generally  
  accepted accounting principles?                               

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

  ------------------------------------------------------------- ---------
  b\. Are the schedules of expenditures of Federal awards       
  presented fairly in all material respects in relation to the  
  financial statements of subrecipients taken as a whole?       

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

25\.

  ------------------------------------------------------------- ---------
  Does the program participant ensure that each                 
  subrecipient/project sponsor audit has determined whether the 
  subrecipient has internal accounting and other control        
  systems to provide reasonable assurance that it is managing   
  Federal financial assistance programs in compliance with      
  applicable laws and regulations? (24 CFR 574.605 and OMB      
  Circular A-133, §\_\_\_.400(d)(3) and (4), as well as         
  §\_\_\_.500(c))                                               

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

26\.

  -----------------------------------------------------------------------
  Did the program participant review each audit report of its
  subrecipients that expended \$300,000 or more in Federal awards in the
  fiscal year \[\$500,000 or more for fiscal years ending after December
  31, 2003\] to determine whether the audit report states the
  subrecipient has complied with laws, regulations, and provisions of
  contracts or grant agreements that may have a direct and material
  effect on each of its major programs?

  **Describe Basis for Conclusion:**

       
  -----------------------------------------------------------------------

27\.

  -----------------------------------------------------------------------
  Did the program participant ensure that audit reports of its
  subrecipients that expended \$300,000 or more in Federal awards in the
  fiscal year \[\$500,000 or more for fiscal years ending after December
  31, 2003\] were submitted within 30 days after receipt of the auditor's
  report, but not later than nine months after the end of the audit
  period (or such longer period agreed to in advance by the program
  participant)?

  **Describe Basis for Conclusion:**

       
  -----------------------------------------------------------------------

28\.

+-----------------------------------------------------------------------+
| How does the program participant ensure that audit costs are          |
| allowable as a direct cost, or as an allocated indirect cost, as      |
| determined in accordance with the applicable OMB cost principles?     |
|                                                                       |
| \[24 CFR 574.605, OMB Circular A-133, §\_\_\_.230, and                |
| §\_\_\_.400(d)(4)\]                                                   |
+-----------------------------------------------------------------------+
| **Describe Basis for Conclusion:**                                    |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+

29\.

+------------------------------------------------------------+---------+
| Does the program participant have a means for determining  |         |
| what corrective actions by the subrecipient are necessary  |         |
| and appropriate to resolve findings and that such actions  |         |
| are taken?                                                 |         |
|                                                            |         |
| \[24 CFR 574.605, OMB Circular A-133, §\_\_\_.400(d)(5)\]  |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

30\.

+------------------------------------------------------------+---------+
| Does the system ensure that the program participant issues |         |
| management decisions for audit findings within six months  |         |
| after receipt of subrecipient audit reports, and provide   |         |
| follow-up to ensure that the subrecipient takes            |         |
| appropriate and timely corrective action?                  |         |
|                                                            |         |
| \[24 CFR 574.605, OMB Circular A-133, §\_\_\_.400(d)(5)\]  |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

31\.

+------------------------------------------------------------+---------+
| Does the program participant have a means for deciding     |         |
| whether the subrecipient audit necessitates adjustment of  |         |
| the participant's records?                                 |         |
|                                                            |         |
| \[24 CFR 574.605, OMB Circular A-133, §\_\_\_.400(d)(6)\]  |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

32\.

+------------------------------------------------------------+---------+
| Did record review disclose any items that should have been |         |
| adjusted in the program participant's records, but were    |         |
| not?                                                       |         |
|                                                            |         |
| \[24 CFR 574.605, OMB Circular A-133, §\_\_\_.400(d)(6)\]  |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

33\.

+------------------------------------------------------------+---------+
| Does the program participant's system or procedure require |         |
| each subrecipient to permit independent auditors and       |         |
| participant staff to have access to the records and        |         |
| financial statements, as necessary, to comply with the     |         |
| Circular?                                                  |         |
|                                                            |         |
| \[24 CFR 574.605, OMB Circular A-133, §\_\_\_.400(d)(7)\]  |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

34\.

+-----------------------------------------------------------------------+
| What is the program participant's process for reviewing and reaching  |
| determinations to accept or reject findings and properly documenting  |
| such determinations?                                                  |
|                                                                       |
| \[24 CFR 574.605, OMB Circular A-133, §\_\_\_.400(d)(5)\]             |
+-----------------------------------------------------------------------+
| **Describe Basis for Conclusion:**                                    |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+

35\.

+------------------------------------------------------------+---------+
| Does the program participant have a process for referral   |         |
| of agency-contested findings and recommendations to senior |         |
| level officials, outside of the normal chain of command,   |         |
| for resolution?                                            |         |
|                                                            |         |
| \[24 CFR 574.605, OMB Circular A-133, §§\_\_\_.400(d)(5)   |         |
| and \_\_\_\_.510(b)\]                                      |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

36\.

  ------------------------------------------------------------- ---------
  a\. Does the program participant have a system or procedure   
  to promptly inform HUD and federal law enforcement            
  authorities of illegal acts or irregularities?\               
  \[24 CFR 574.605, OMB Circular A-133, §\_\_\_.400(d)(3)\]     

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

  -----------------------------------------------------------------------
  b\. If yes, what is procedure(s)/criteria used in determining when to
  notify authorities?

  **Describe Basis for Conclusion:**

       
  -----------------------------------------------------------------------

37\.

+------------------------------------------------------------+---------+
| Is there a procedure to establish an account receivable    |         |
| from the subrecipient when a monetary sanction is          |         |
| involved?                                                  |         |
|                                                            |         |
| \[24 CFR 574.605 and OMB Circular A-133, § ­­­­\_\_\_\_.224\]  |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

38\.

+------------------------------------------------------------+---------+
| Is there a means of ensuring consistent treatment of all   |         |
| audit findings?                                            |         |
|                                                            |         |
| \[24 CFR 574.605\]                                         |         |
+------------------------------------------------------------+---------+
| **Describe Basis for Conclusion:**                         |         |
+------------------------------------------------------------+---------+
|                                                            |         |
+------------------------------------------------------------+---------+

39\.

  ------------------------------------------------------------- ---------
  Does the program participant make positive efforts to use     
  small businesses, minority-owned firms, and women's business  
  enterprises in procuring audit services, and does its system  
  encourage localities or subrecipients/subgrantees to do the   
  same? (**Note**: Because program participants are [not        
  required]{.underline} to use minority-owned financial         
  institutions, but encouraged to do so pursuant to OMB         
  Circular A-133, §\_\_\_.305(a), a "No" response to this       
  question would **NOT** constitute a finding.)                 

  **Describe Basis for Conclusion:**                            

                                                                
  ------------------------------------------------------------- ---------

+-----------+--------------------------------+----+------------------+
| **Guide   |                                |    |                  |
| for       |                                |    |                  |
| Review of |                                |    |                  |
| Financial |                                |    |                  |
| Man       |                                |    |                  |
| agement** |                                |    |                  |
|           |                                |    |                  |
| **OMB     |                                |    |                  |
| Circular  |                                |    |                  |
| A-133     |                                |    |                  |
| Audits    |                                |    |                  |
| M         |                                |    |                  |
| anagement |                                |    |                  |
| System    |                                |    |                  |
| Review    |                                |    |                  |
| Wo        |                                |    |                  |
| rksheet** |                                |    |                  |
+-----------+--------------------------------+----+------------------+
| **Name of |                                |    |                  |
| Program   |                                |    |                  |
| Parti     |                                |    |                  |
| cipant:** |                                |    |                  |
|           |                                |    |                  |
| **     ** |                                |    |                  |
+-----------+--------------------------------+----+------------------+
| **Name(s) |                                | ** |                  |
| of        |                                | Da |                  |
| Revi      |                                | te |                  |
| ewer(s)** |                                | ** |                  |
+-----------+--------------------------------+----+------------------+

**[Instructions]{.underline}:** This worksheet is intended to supplement
the information contained in the Section VIII. [OMB Circular A-133:
Audits of States, Local Governments, and Non-Profit
Organizations]{.underline}, of this Exhibit. Where subrecipient audits
are reviewed to confirm the implementation of the program participant's
system, select a sample of grants and insert the names of the
subrecipients in column (a) and the fiscal year end dates in column (b)
of Part I. Insert due dates and receipt deadlines in columns (c) through
(e) of Part I; and answer "yes" or "no," as appropriate, in columns (f)
through (j) of Part II.

[Part I - Receipt Deadlines]{.underline}

+---+-----------------+-----------+------------+----------+---+-----------+
|   | **Subrecipient  | **Fiscal  | **Audit**  | *        | * |           |
|   | Name**          | Year End  |            | *Audit** | * |           |
|   |                 | Date**    | **Report   |          | A |           |
|   |                 |           | Date**     | **Due    | u |           |
|   |                 |           |            | Date**   | d |           |
|   |                 |           |            |          | i |           |
|   |                 |           |            |          | t |           |
|   |                 |           |            |          | R |           |
|   |                 |           |            |          | e |           |
|   |                 |           |            |          | c |           |
|   |                 |           |            |          | e |           |
|   |                 |           |            |          | i |           |
|   |                 |           |            |          | v |           |
|   |                 |           |            |          | e |           |
|   |                 |           |            |          | d |           |
|   |                 |           |            |          | * |           |
|   |                 |           |            |          | * |           |
|   |                 |           |            |          |   |           |
|   |                 |           |            |          | * |           |
|   |                 |           |            |          | * |           |
|   |                 |           |            |          | D |           |
|   |                 |           |            |          | a |           |
|   |                 |           |            |          | t |           |
|   |                 |           |            |          | e |           |
|   |                 |           |            |          | * |           |
|   |                 |           |            |          | * |           |
+---+-----------------+-----------+------------+----------+---+-----------+
|   | \(a\)           | \(b\)     | \(c\)      | \(d\)    |   | \(e\)     |
+---+-----------------+-----------+------------+----------+---+-----------+
| 1 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+
| 2 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+
| 3 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+
| 4 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+
| 5 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+
| 6 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+
| 7 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+
| 8 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+
| 9 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+
| 1 |                 |           |            |          |   |           |
| 0 |                 |           |            |          |   |           |
| \ |                 |           |            |          |   |           |
| . |                 |           |            |          |   |           |
+---+-----------------+-----------+------------+----------+---+-----------+

[Part II - Were Requirements Met (Yes/No)?]{.underline}

  ------ ----------- -------------- --------------- -------------- ---------------
         **A-133     **Corrective   **Corrective    **Corrective   **Corrective
         Met?**      Actions        Actions         Actions        Actions Taken
                     Accepted?**    Documented?**   Taken?**       in 6 months?**

         \(f\)       \(g\)          \(h\)           \(i\)          \(j\)

  1\.                                                              

  2\.                                                              

  3\.                                                              

  4\.                                                              

  5\.                                                              

  6\.                                                              

  7\.                                                              

  8\.                                                              

  9\.                                                              

  10\.                                                             
  ------ ----------- -------------- --------------- -------------- ---------------

[Part III - Conclusions]{.underline}

  -----------------------------------------------------------------------
  Explain responses, including problems noted or delays in complying with
  the required deadlines.

  **Describe Basis for Conclusion:**

       
  -----------------------------------------------------------------------