Last week, the State and Local Government Finance Division issued Memo No. 2023-05 that discusses various issues related to audits for fiscal year ended June 30, 2022. Specifically,
- Coronavirus State Local Fiscal Recovery Funds (CSLFRF)
- If a municipality has expended CSLFRF that pushes the municipality over the threshold for a federal single audit, there is an “Alternative Compliance Examination Engagement” option available, that allows the auditor to test only the allowable costs and allowable activities.
- How to report CSLFRF designated as “Revenue Loss” on the Schedule of Expenditures of Federal and State Awards (SEFSA).
- Education Stabilization Fund
- Most of the funding from the American Rescue Plan Act for Public Schools in North Carolina are provided to Schools from the Education Stabilization Fund (84.425). Refer to NC Dept. of Public Instruction’s “Summary of COVID Funding” report.
- Internal Control Concerns
- Numerous local governments do not complete timely bank reconciliations. The timely completion of a monthly bank reconciliation that reconciles to the general ledger is a critical internal control.
- New Auditor’s Reports
- SAS No. 134 has now gone into effect; therefore, the Auditor’s Opinion and other reports will need to be revised. Auditors are required to use these revised reports beginning with audits with fiscal years ending December 31, 2021. Revised reports are presented on our website here.
- Assistance Listing Number
- The “Assistance Listing Number” has replaced the term “Catalog of Federal Domestic Assistance” (CFDA). The five-digit number (XX.XXX) and the name for the federal programs have not changed; however, the term “Assistance Listing Number” should be used instead.
For more information on these and other items, please refer to our Memo No. 2023-05.