1) Audit Report Elements
The audit report shall contain the following elements:
A) Scope of audit
B) A description of audit procedures used
C) Opinion
D) Findings
E) Recommendations
F) Financial statements and analyses
G) On forms prescribed by the Department, a schedule of operating revenues and expenses for the participant's grant contract period. (See Section 2-4 of the Act.)
2) Contents of Report
The audit report shall consist of the following:
A) Financial statements, including footnotes, of the participant.
B) The auditor's comments on the financial statements, which:
i) Identify the statements examined and the period covered.
ii) Express an opinion as to whether the financial statements are fairly presented in accordance with generally accepted accounting principles. If an unqualified opinion cannot be expressed, the nature of the qualification shall be stated.
C) Calculations, assurances (i.e., positive or negative assurances that something has been done) and certifications (i.e., statements by which it is declared that a fact is true or a requirement has been met), stating whether the requirements of subsection (c)(2) have been met by the
Department, including, but not limited to, the following:
i) A determination and calculation of eligible and ineligible operating expenses.
ii) A determination and calculation that the State operating assistance, when added to the federal operating assistance, does not exceed the total operating deficit. Operating deficit shall be calculated as eligible expenses less revenues. In determining deficit, the definition of eligible expenses in the Act and this Part and the definition of revenue in the Act shall govern.
D) The auditor's assurances that:
i) The financial statements of the participant were prepared in accordance with generally accepted accounting principles adopted by the AICPA.
ii) Applicable laws were complied with by the participant.
iii) The participant's system of internal accounting controls and procedures were adequate relating to funds received and costs chargeable to the grant contract.
iv) State funds were expended in accordance with the grant contract.
E) The auditor's comments on compliance and internal control, which shall include:
i) Comments on weaknesses in and noncompliance with the systems of internal control, separately identifying material weaknesses.
ii) Identification of instances of noncompliances with the terms of the grant contract, State law or this Part, and the effect of the noncompliance, if any, on the reliability or accuracy of the financial statements and reports filed under this Part.
F) Comments on the accuracy and completeness of financial reports and claims for advances or reimbursement.
G) Comments on corrective action taken or planned by the participant relative to the audit findings of the previous year and recommendations for current year corrective action.
