Code of Maine Rules › 10 - DEPARTMENT OF HEALTH AND HUMAN SERVICES › 144 - DEPARTMENT OF HEALTH AND HUMAN SERVICES - GENERAL › Chapter 30 - MAINE UNIFORM ACCOUNTING AND AUDITING PRACTICES FOR COMMUNITY AGENCIES › Section 144-30-03 - AUDIT REQUIREMENTS

Current through 2024-29, July 17, 2024
SUMMARY:
This section presents requirements to
				  community agencies and IPAs for audits of community agencies under these rules
				  and to Department audit personnel for Department examinations of community
				  agency agreements.
A.
AUDIT
				RESPONSIBILITIES OF COMMUNITY AGENCIES
Community agencies and IPAs must understand the requirements
				  of both Federal and Department audit requirements and they are as
				  follows:
1.
Federal Audit
				Requirement
Community agencies are responsible for obtaining audits that
				  satisfy Federal audit requirements in accordance with OMB Circular A-133. All
				  Federal audits for community agencies will be performed by a qualified IPA.
				  Department auditors will be responsible for providing the necessary oversight
				  of these audits to assure adequate coverage of pass-through Federal awards to
				  community agencies.
If the community agency can satisfy its Federal audit
				  requirement through a program-specific audit as specified in OMB Circular
				  A-133, §__.235, and its Federal funds are the only agreement amounts
				  awarded by the Department, that audit will satisfy the audit requirement of
				  these rules.
2.
Department Audit Requirement
All community agencies within Tier 2 (or within Tier 1 but
				  opting for a Tier 2 audit) are required to have a qualified IPA conduct an
				  audit in accordance with these rules. The Department will be responsible for
				  providing the oversight of the community agency report submission.
(a)
Financial statements
: The
				IPA shall determine whether the financial statements of the community agency
				are presented fairly in all material respects in conformity with Generally
				Accepted Accounting Principles. The IPA shall also determine whether the SEDA
				is presented fairly in all material respects in relation to the community
				agency's financial statements taken as a whole.
(b) All audits shall be conducted in
				accordance with auditing standards generally accepted in the United States of
				America and the standards applicable to financial audits contained in
Government Auditing Standards
(the Yellow Book) issued by the
				Comptroller General of the United States.
(c) In addition to the requirements of the
				Yellow Book, the IPA shall perform procedures to obtain an understanding of
				internal controls over Department programs sufficient to plan the audit to
				support a low assessed level of control risk for all programs tested.
(d) Except as provided in paragraph 2(e) of
				this section, the IPA shall plan and perform testing of internal controls over
				programs tested to support a low assessed level of control risk for the
				assertions relevant to the compliance requirements for each program
				tested.
(e) When the internal
				control over some or all the compliance requirements for a program is likely to
				be ineffective in preventing or detecting noncompliance, the planning and
				performing of testing described in 2(d) of this section are not required for
				those compliance requirements. However, the IPA shall report a significant
				deficiency (including whether any such condition is a material weakness),
				assess the related control risk at the maximum, and consider whether additional
				compliance tests are required because of ineffective internal
				control.
(f) In addition to the
				requirements of the Yellow Book, the IPA shall determine whether the community
				agency has complied with laws, regulations, and the provisions of contracts or
				grant agreements that may have a direct and material effect on any of its
				programs.
(g) The compliance
				testing shall include tests of transactions and such other auditing procedures
				necessary to provide the IPA sufficient evidence to support an opinion on
				compliance.
3. Upon
				request, the IPA shall send to the Department copies of audit working papers,
				reports, letters and correspondence. The IPA shall also cooperate with the
				Department in the conduct of quality control reviews of an audit made under
				these rules.