Chapter 1. APPLICABILITY DECISION TREE: DETERMINING WHETHER AN ENTITY A FINANCIAL AUDIT AND A STATE COMPLIANCE AUDIT, OR AN AGREED-UPON PROCEDURES ENGAGEMENT Is the entity a county, a municipality, a or special service district, or an interlocal agreement entity? Yes – Continue to #3 below No – Nonoperating charter schools continue to #5 below. All others continue to #2 below. Is the entity a school district or an operating charter school (including organized as nonprofits)? Yes – Stop! Both a financial and a state compliance audit are required to be performed and submitted to the Office of the Utah State Auditor (OSA). No – Neither an agreed-upon procedures engagement, a financial audit, nor a state compliance audit are required by the State of Utah.* Nonprofit Organizations (other than charter schools) are subject instead to reporting requirements under UCA 51-2a-201.5 (see for applicable reporting requirements). Are total annual revenues or expenditures of all funds less than $750,000? Yes – Continue No – Stop! Both a financial audit and a state compliance audit are required to be performed and submitted to the OSA. Are annual revenues or expenditures of all funds greater than $350,000? Yes – Continue No – Stop! Neither an agreed-upon procedures engagement, a financial audit, nor a state compliance audit are required by the State of Utah.* However, the entity must complete: OSA Self-Evaluation Form, and OSA Small Financial Survey at Are either a financial audit or a state compliance audit required by an external party (i.e. bond/debt covenants)? Yes – Stop! Both a financial and a state compliance audit are required to be performed and submitted to the OSA. No – Stop! An agreed-upon procedures engagement is required.* Also, the entity must complete the OSA Financial Survey at . NOTE: A nonoperating charter school may submit an AFR in place of the OSA Financial Survey. * An entity may decide to have a financial audit and a state compliance audit even if not required as outlined above. If an audit is performed, the state compliance audit is also required. A COMPLETE LIST OF THE CURRENT REPORTING REQUIREMENTS CAN BE FOUND ON THE OSA WEBSITE AT: ENTITIES REQUIRED TO HAVE AN AGREED-UPON PROCEDURES ENGAGEMENT
Was classified and recorded in accordance with the entity’s chart of accounts and policies and procedures, GAAP, and State/Federal policies as applicable. ALL If the entity uses credit cards or purchasing cards, for each card used, select one month during the period and determine whether card purchases were reconciled to receipts monthly by someone other than the card holder. ALL Through inquiry with management and scanning receipt records, determine what restricted revenue is received by the entity funds, impact fees, B&C road funds, etc.). Select the lesser of 10% or 5 disbursements from restricted funds and determine whether the disbursements were in compliance with restrictions placed on the funds. ALL CASH For each depository account, obtain the year-end bank reconciliation and one additional month’s bank reconciliation and perform the following: Trace the bank balance on the reconciliation to the balance per the bank statement. Trace the reconciled book balance to the general ledger and the amount reported on the Financial Survey. Test the clerical accuracy of the reconciliation. For reconciling greater than 5% of annual revenues, inquire of management and review applicable supporting documentation to determine that the items are consistent with the entity’s policies and procedures, GAAP, and State/Federal policies. Trace the lesser of 10% or five reconciling items to a subsequent bank statement. Trace the lesser of 10% or five deposit transactions and 10% or five disbursement transactions to the general ledger. ALL For each depository bank reconciliation selected above, through inquiry of management and review of the reconciliation, determine whether the bank reconciliation is performed by someone who does not have access to receipts or disbursements. If the individual does have access to receipts or disbursements (including direct access to perform withdrawals/transfers in the bank accounts), determine whether a separate individual reviews the completed bank reconciliation.
ALL MEETINGS Review the governing meeting minutes for the period applicable to the engagement through the report date of the engagement. For all financial transactions discussed in the minutes exceeding 5% of total revenues, and a selection of the lesser of 10% or 3 lesssignificant financial transactions discussed, trace the transactions to the entity’s accounting records and determine whether the transactions were recorded and reported in accordance with the entity’s policies and procedures, GAAP, and State and/or Federal policies, as applicable. COMPLIANCE MEETINGS Select and obtain the agenda and meeting minutes for two public meetings held during the engagement year and perform the following: UCA ALL Determine that the entity gave proper notice of the meeting at 24 hours before each meeting by posting the notice on the Utah Public Notice Website. UCA ALL Determine that the agenda was reasonably specific to enable lay persons to understand the topics to be discussed. UCA ALL Determine if the public body took any final actions on a topic in the meeting that was not listed under an agenda item. UCA M & LEA Determine whether the minutes were posted to the Utah Public Notice Website within three days of the meeting minutes being approved. (Exception: Charter schools are required only to make the meeting minutes available to the public within three days of being approved.). UCA ALL If a portion of the meeting was closed to the public, determine that 1) before the meeting was closed, the reason for holding the closed meeting was documented in the meeting minutes and a roll call vote was taken, 2) the reason for closing the meeting was permitted under statute, and 3) an audio recording of the closed meeting was made (see exception below). Meetings may be closed for only the following: Discussion of the character, competence or health of an individual. Strategy sessions for: Collective bargaining Pending or imminent litigation Purchase, exchange, or lease of real property including water rights and shares Sale of real property including water rights or shares
UCA Cities: Districts: LEAs: Interlocals: ALL Examine the entity’s records and financial reports and determine whether the total expenditures by department stayed within the amounts appropriated in the final adopted budget. UCA Towns: Cities: Districts: Interlocals: M, D & IL FUND BALANCES Deficit Fund Balances: For any fund that has a deficit fund balance in the year under review, determine whether the entity included in the subsequent budget year an appropriation to retire the deficit of an amount equal to or greater than 5% of the fund’s total actual revenue of the year under review. UCA Cities: Towns: UCA Districts: Interlocals: M, D & IL General Fund Balance Limitations: Municipalities: Determine whether the entity's unrestricted (committed, assigned, and unassigned) general fund balance did not exceed 25% for cities or 75% for towns of the total revenue of the general fund for the engagement year. Special and Local Service Districts and Interlocal Entities: The maximum unrestricted (committed, assigned, and unassigned) fund balance is restricted to the greater of: 100% of the current year’s property tax; or 25% of the total general fund revenues, if the annual general fund budget is greater than $100,000; or 50% of the total general fund revenues, if the annual general fund budget is equal to or less than $100,000. UCA ALL TRAINING Through inquiry with officials of the entity and observation of meeting agendas, certificates or other relevant evidence, determine whether the following training has occurred as applicable: Open and public meetings – UCA 52-4 requires that the presiding officer of a governing body ensure that members of the governing body are provided with annual training on the requirements of open and public meetings. UCA ALL GRAMA – UCA 63G-2-108 requires that the entity’s designated records officer shall annually complete an online training course on the requirements of GRAMA.