Introduction: Materiality by Compliance Requirement Matrix Planning Federal Materiality by Compliance Requirement See Footnotes 1-6 below the matrix table for further explanation, in particular, review note 6 which discusses tailoring the matrix assessments. (1) (2) (6) (6) (3) (4) (5) (5) (6) Compliance Requirement Applicable per Compl. Suppl. Direct & material to program / entity Monetary or nonmonetary If monetary, population subject to require. Inherent risk (IR) assess. Final control risk (CR) assess. Detection risk of noncompl. Overall audit risk of noncompl. Federal materiality by compl. requirement (Yes or No) (Yes or No) (M/N) (Dollars) (High/Low) (High/Low) (High/Low) (High/Low) typically 5% of population subject to requirement A Activities Allowed or Unallowed Yes M 5% B Allowable Principles No C Cash Management Yes N 5% D RESERVED E Eligibility Yes M/N 5% F Equipment & Real Property Mgmt No G Matching, Level of Effort, Earmark Yes M 5% H Period of Availability (Performance) Yes M 5% I Procurement & Sus. & Debarment No J Program Income Yes M 5% K RESERVED L Reporting Yes N 5% M Subrecipient Monitoring No N Special Tests & Provisions - Verification Yes N 5% N Special & Provisions – Disbursements to or on Behalf of Students Yes M 5% N Special Tests & Provisions – Return of Title IV Funds Yes M 5% N Special Tests & Provisions – Enrollment Reporting Yes N 5%
Audit Implications Summary Audit Implications (adequacy of the system and controls, and the effect on sample size, significant deficiencies / material weaknesses, material non-compliance and management letter comments) Results of Test of Controls: (including material weaknesses, significant deficiencies and management letter items) Assessment of Control Risk: Effect on the Nature, Timing, and Extent of Compliance (Substantive Test) including Sample Size: Results of Compliance (Substantive Tests) Tests: Questioned Costs: Actual __________ Projected __________
A = Accepted – all fields accepted C = Corrected – one or more fields corrected 39 40 2 N Disbursement number Number of the disbursement per student for the Award Year Must be numeric: 01 to 20 41 47 7 N Accepted Disbursement Amount Amount of disbursement for student’s payment period. If an adjustment, this value is a replacement amount. Dollars and Use leading zeros; do not include the $ sign or decimal point. Range = 00000 to maximum for award year. Summary Record Layout – Pell YTD Record Recipients must follow up on origination records “Accepted with Corrections”. This includes the following originations record fields: Last Len Type Name Description Valid Values Processing 16 22 7 N Originations Accepted Provided by the Pell Processor. YTD number of originations received and accepted for the institution = 0000000 to 9999999 23 29 7 N Originations Corrected Provided by the Pell Processor. YTD number of originations received and corrected for the institution. = 0000000 to 9999999
Audit Objectives and Control Testing Obtain an understanding of internal control, assess risk, and test internal control as required by and using the guidance provided in the following: of the OMB Compliance Supplement, Internal Control 2013 COSO () GAO’s 2014 Green Book (). Consider the results of the testing of internal control in assessing the remaining risk of noncompliance. Use this as the basis for determining the nature, timing, and extent (e.g., number of transactions to be selected) of substantive tests of compliance. For further AOS guidance on testing federal controls see . (Source: 2016 OMB Supplement 3.2) Determine whether educational programs that are contracted out to ineligible institutions, consortiums, or organizations to provide educational programs to its students do not exceed regulatory limits. (Source: 2016 OMB Compliance Supplement, Part 5, Cluster of Programs, Student Financial Assistance Programs) What Control Procedures Address the Compliance Requirement (reference/link to documentation or where the testing was performed): Basis for the control (reports, resources, etc. providing information needed to understand requirements and prevent or identify and correct errors): Control Procedure (description of how auditee uses the “Basis” to prevent, or identify and correct or detect errors): Person(s) responsible for performing the control procedure (title): Description of evidence documenting the control was applied (i.e. sampling unit):