USDA is an equal opportunity provider, employer, and lender.

Rural Development

Business Center 

Chief Financial Officer 

211 N. Broadway 

St. Louis, MO 63102 

Voice 314.457.4150 

Fax 844.539.5800 

RD AN No. 4894 (2012-A) 

SUBJECT: 

TO:

ATTENTION: 

FROM:

Management and Monitoring of Single 

Audit Non-Federal Entities - Phase 1

Agency Administrators 

Director of State Operations Office

State Directors

Deputy State Directors

Program Directors

Administrative Program Directors

Tony Bainbridge

Chief Financial Officer

PURPOSE

This Administrative Notice (AN) is issued to provide significant guidance for the 

Single Audit management and monitoring process per Rural Development (RD) 

Instruction 2012-A, Audits and Investigations. This AN covers Phase 1 of RD’s 

process over Management and Monitoring of Single Audit Awardees.

COMPARISON WITH PREVIOUS AN

There is no previous AN on this topic.

BACKGROUND

In Fiscal Year (FY) 2017, the Government Accountability Office (GAO) conducted a 

review of United States Department of Agriculture (USDA) RD’s policies for Title 2 of 

the Code of Federal Regulations (referenced 2 CFR), Part 200, Subpart F, Audit 

Requirements. GAO issued RD three recommendations:

• Design policies and procedures to reasonably assure that all award recipients

required to submit single audit reports do so in accordance with the Office of

Management and Budget (OMB) guidance,

• Revise policies and procedures to reasonably assure that management

decisions contain the required elements and are issued timely in accordance

with OMB guidance, and

• Design and implement policies and procedures for identifying and managing

high-risk and recurring single audit findings using a risk-based approach.

EXPIRATION DATE: FILING INSTRUCTIONS: 

August 31, 2024 Preceding RD Instruction 2012-A 
Management and Monitoring of Single Audit Non-Federal Entities - Phase 1 Page 2 

2 CFR 200 Subpart F is the governing regulation over Single Audits and supersedes any other 

regulations on the matter. Governing provisions are reflected in 2 CFR 200, section 200.101(d).

Per 2 CFR 200 Subpart F, a Single Audit is required when an awardee has expended $750,000 

within their FY and meets the definition of a Non-Federal Entity (NFE). The audit must be 

submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or 9 

months after the end of the awardee’s fiscal yearend (FYE). The awardee must upload the 

audit into the Federal Audit Clearinghouse (FAC). RD has 6 months from when the audit is 

released by the FAC to identify and provide a management decision to any 2 CFR Part 

200.515(d)(3), Findings and Questioned Costs for Federal Awards, findings that pertain to a RD 

program. RD must continuously monitor the risk to the Agency by identifying reoccurring 

findings and severity of findings. 

Program-related audit findings are characterized in 2 CFR 200.516 as follows: 

(1) Significant deficiencies and material weaknesses in internal control over major programs 

and significant instances of abuse relating to major programs,

(2) Material noncompliance with the provisions of Federal statutes, regulations, or the terms 

and conditions of Federal awards related to a major program, 

(3) Known questioned costs that are greater than $25,000,

(4) Known or likely fraud affecting a Federal award, unless such fraud is otherwise reported 

as an audit finding in the schedule of findings and questioned costs for Federal awards, 

and/or 

(5) Instances where the results of audit follow-up procedures disclosed that the summary 

schedule of prior audit findings prepared by the auditee materially misrepresents the 

status of any prior audit finding.

Note: All Single Audits should be obtained from the FAC. Single Audits should not be 

requested directly from the awardee. 

STANDARD DEFINITIONS

• Refer to 2 CFR 200.1 for regulation definitions

• Case File: RD’s official file where awardee documents are stored. This may be a 

physical file in the office or online repository based on the current process for the state 

or program. 

IMPLEMENTATION RESPONSIBILITIES

The Office of Compliance (OC) developed the following new processes for compliance with 2 

CFR 200 Subpart F: 

(1) A process to identify potential awardees subject to a Single Audit,

(2) A risk rating system for Single Audits with findings, and

(3) A Management Decision Letter template for issuance to the awardee. 
Management and Monitoring of Single Audit Non-Federal Entities - Phase 1 Page 3 

Effective 30 days from AN date, the OC staff will work in conjunction with the Agency 

Administrators’ designated Program Point of Contact (POC) to implement the new Single Audit

procedures. The Program POC will coordinate with the State or National Offices for assistance

on deliverables depending on whether the awardee is administered at the National or 

State/Field Offices level.

Single Audit Procedures: 

(1) Populate missing Awardee’s FYE and Organization Type (Also known as Type of 

Applicant or Legal Classification), 

(2) Prepare and issue Management Decision Letter based on Program Related Findings to 

Awardee, and

(3) Research Delinquent Single Audits. 

Populate Missing Awardee’s FYE and Organization Type (Also known as Type of 

Applicant or Legal Classification)

OC Responsibility: 

The OC will pull disbursement reports from the various accounting systems monthly. To

properly identify if a RD awardee has reached the $750,000 threshold and meets the definition 

of a NFE, the FYE and Organization Type is required. The OC will obtain the FYE and 

Organization Type from the application or accounting systems. When the FYE and 

Organization Type are not available, the request is sent to the Program POC to obtain the 

missing information. 

Program POC Responsibility: 

1) Review the report to determine the State or National Offices for each account.

2) Separate the report by State or National Offices. 

A. Send the report to the State Program Director if the awardee is administered by the 

State Offices. 

B. Send the report to the appropriate program staff in the National Office if the awardee

is administered by the National Office. 

State or National Offices Responsibility: 

1) Research the missing FYE and Organization type in the awardee’s application / case 

file. 

2) Fill in the missing information on the report. 

3) Update the appropriate systems with missing information. 

4) Return completed report to the Program POC. 

Program POC: 

1) Consolidate the results. 

2) Return consolidated report to the OC. 

Complete Management Decision Letter based on Program Related Findings 

OC Responsibility:
Management and Monitoring of Single Audit Non-Federal Entities - Phase 1 Page 4 

The OC will download the audits from the FAC and conduct a review of the awardee’s Single 

Audit and Schedule of Findings and Questioned Costs. The OC will evaluate and assign an 

overall risk rating on the audit and provide comments or recommendations through a 

memorandum to the Program POC. The memorandum from the OC will clearly state whether a

Management Decision Letter (MDL) is required or if any audit findings or recommendations 

were made. 

Program POC Responsibility: 

1) Review the memorandum from OC to determine the (State or National Offices. 

2) Send the memorandum to the State Program Director, if an Awardee is administered in 

the State Office: 

3) Send the memorandum to the appropriate program staff in the National Office, if an 

Awardee is administered in the National Office:

State or National Offices Responsibility: 

4) If an MDL is required: 

A. Prepare the MDL using the template. 

i. The MDL must include the following:

1. Program-related finding. 

2. A statement regarding whether the corrective action to resolve the 

findings are sufficient or if additional actions are needed by the awardee. 

3. If additional actions are needed, the State or National POC must work 

with the awardee to determine the additional corrective actions and the 

timeline for completion. 

B. Route the MDL to the Approving Official for signature. 

C. Mail the signed MDL to the awardee. 

D. Email the signed MDL to the Program POC. 

E. Save a copy of the signed MDL in the case file. 

Note: If an MDL has already been issued to the awardee addressing these findings, there is no 

need to send another letter. Please disregard steps 4A through 4C and follow steps 4D and 4E. 

5) If an MDL is not required: 

A. Review the recommendations provided by the OC to determine if other actions 

may be needed. 

B. Save the memorandum in the case file. 

Program POC Responsibility: 

6) Email the signed MDL to the OC. 

Note: The MDL must be issued to the awardee and the OC within 3 months of receipt from the 

OC memorandum. A copy of the MDL template can be found by clicking the link (Attachment 

A). 

Research Delinquent Single Audits 

OC Responsibility:
Management and Monitoring of Single Audit Non-Federal Entities - Phase 1 Page 5 

Quarterly, the OC will reconcile the Single Audits received to the Single Audits required to 

determine if there are delinquent Single Audits. Delinquent Single Audits are identified as such 

when 9 months have elapsed from an awardee’s FYE. 

Program POC Responsibility: 

1) Review the delinquent single audit report to determine the servicing office (State or 

National Offices) for each account. 

2) Separate the report by servicing office (State or National Offices). 

3) Send the report with delinquent Single Audit account to the State Program Director, if an 

Awardee is administered in the State Office. 

4) Send the report with delinquent Single Audit account to the appropriate National Office 

program staff, if an Awardee is administered in the National Office. 

State or National Office Responsibility: 

5) Notify the awardee of the past due Single Audit submission, requesting a status. 

6) Request the awardee to submit the Single Audit to the FAC if a Single Audit has been 

conducted but not uploaded in FAC. 

A. If the awardee has not completed or scheduled a Single Audit, request that a 

Single Audit be completed and then submitted to FAC.

7) Update the delinquent report with the awardee’s status, forward any Single Audits 

received and submit the report to the National Office POC. 

Program POC Responsibility: 

8) Consolidate the results into one report and submit the consolidated report and any

Single Audits received to OC. 

REQUIRED DOCUMENTATION

The RD staff must ensure the MDL is placed in the official case file. All documents may be 

electronic or hard copy as appropriate. 

Questions regarding this AN may be directed to Michelle Bransford, Staff Accountant, Technical 

Accounting Review Branch, External Compliance Division, at Michelle.Bransford@usda.gov and 

Stephanie Nahm, Lead Accountant, Program Internal Control Branch, Internal Compliance 

Division, at Stephanie.Nahm@usda.gov. 

Sent by Electronic Mail on ________ at ________ by the Office of Compliance, Internal 

Compliance Division, St. Louis, Missouri. Agency Administrators, State Directors, and 

Associate Enterprise Directors should advise other personnel as appropriate.

Attachment
USDA is an equal opportunity provider, employer, and lender.

Attachment A: Management Decision Letter Template

DATE: Month, XX, XXXX

TO: [Awardee/Awardee’s info],

FROM: [Program Administrator/Program Director/POC Info]

SUBJECT: Rural Development Single Audit Management Decision Letter (MDL)

In accordance with the Office of Management and Budget's (OMB) Uniform Guidance (UG) Title 

2 of the Code of Federal Regulations, Part 200 (2 C.F.R. 200), the [Program Area Name 

(abbreviation)] has reviewed the [Awardee, Awardee or Business Name’s] Single Audit for 

Fiscal Year (FY) ending [Month] [XXXX]. As stated in OMB UG 2 CFR 200.521 we are required 

to issue a Management Decision whether the corrective actions taken to correct the audit 

findings were sustained. 

[We have concluded that the corrective actions taken by [Awardee, Awardee or Business 

Name’s] resolve the Audit Finding(s) listed below. These findings are sustained, and no further 

action is required for FY [XXXX].]

Or

[We have concluded that the corrective actions taken by [Awardee, Awardee or Business 

Name’s] does not resolve the Audit Finding(s) listed below. Additional information can be found 

in the Additional Corrective Actions Needed field.]

(1 finding per table - add more if needed)

Finding Number

CFDA

Finding 

Description

Corrective 

Action

Additional 

Corrective 

Actions Needed 

or Repayment of 

disallowed costs 

(remove if not 

applicable)

If you have any questions, please contact the [Program Abbreviation] POC, [POC Name] at 

[POC Email address] or [POC Phone number].