Compensation for personal services - severance pay (8)-Allowable with restrictions Contingency provisions (9)-Unallowable with exceptions Deans of faculty and graduate schools Not addressed Defense and prosecution of criminal and civil proceedings and claims (10)-Allowable with restrictions Depreciation and use allowances (11)-Allowable with qualifications Donations and contributions (12)-Unallowable (made by recipient); not reimbursable but value may be used as cost sharing or matching (made to recipient) Employee morale, health, and welfare costs (13)-Allowable with restrictions Entertainment costs (14)-Unallowable Equipment and other capital expenditures (15)-Allowability based on specific requirements Fines and penalties (16)-Unallowable with exception Fundraising and investment management costs (17)-Unallowable with exceptions Gains and losses on depreciable assets (18)-Allowable with restrictions (Gains and losses on disposition of depreciable property and other capital assets and substantial relocation of Federal programs) General government expenses (19)-Unallowable with exceptions Goods or services for personal use (20) Unallowable Housing and personal living expenses Not specifically addressed Idle facilities and idle capacity (21)-Idle facilities - unallowable with exceptions; idle capacity - allowable with restrictions Insurance and indemnification (22)-Allowable with restrictions Interest (23)-Allowable with restrictions Interest - substantial relocation Not specifically addressed Labor relations costs Not specifically addressed Lobbying (24)-Unallowable Lobbying - executive lobbying costs (24.b)-Unallowable Losses on other sponsored agreements or contracts Not specifically addressed Maintenance and repair costs (25)-Allowable with restrictions (Maintenance, operations, and repairs) Materials and supplies costs (26)-Allowable with restrictions
Suggested Audit Procedures – Compliance (Substantive Tests) Suggested Audit Procedures – Compliance (Substantive Tests) (Reference / link to documentation where testing was performed testing): Consider the results of the testing of internal control in assessing the 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. Eligibility for Individuals For some Federal programs with a large number of people receiving benefits, the non-Federal entity may use a computer system for processing individual eligibility determinations and delivery of benefits. Often these computer systems are complex and will be separate from the non-Federal entity's regular financial accounting system. Typical functions a computer system for eligibility may perform are: Because of the diversity of computer systems, both hardware and software, it is not practical for this Supplement to provide suggested audit procedures to address each system. However, generally accepted auditing standards provide guidance for the auditor when computer processing relates to accounting information that can materially affect the financial statements being audited. Similarly, when eligibility is material to a major program, and a computer system is integral to eligibility compliance, the auditor should follow this guidance and consider the non-Federal entity's computer processing. The auditor should perform audit procedures relative to the computer system for eligibility as necessary to support the opinion on compliance for the major program. Due to the nature and controls of computer systems, the auditor may choose to perform these tests of the computer systems as part of testing the internal controls for eligibility. Perform calculations to assist in determining who is eligible and the amount of benefits Pay benefits (e.g., write checks) Maintain eligibility records, including information about each individual and benefits paid to or on behalf of the individual (regular payments, refunds, and adjustments) Track the period of time during which an individual is eligible to receive benefits, i.e., from the beginning date of eligibility through the date when those benefits stop, generally at the end of a predetermined period, unless there is a redetermination of eligibility Perform matches with other computer data bases to verify eligibility (e.g., matches to verify earnings or identify individuals who are deceased) Control who is authorized to approve benefits for eligibles (e.g., an employee may be
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 __________
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 __________