DFAS Frequently Asked Questions

No. Per the regulations, a commercial organization is subject to audit requirements for a non-federal audit if, during its fiscal year, it expended $750,000* or more under HHS awards and at least one award is an HHS grant or subgrant. Therefore, the organization must have one grant or subgrant in order to be required to obtain a non-federal audit, but other HHS awards are included in the threshold calculations and the scope of the audit. (See threshold calculation examples.) [* Note: The threshold was $500,000 for audits of fiscal years beginning prior to December 26, 2014.]

The determination of when an award is expended should be based on when the activity related to the award occurs. Generally, the activity pertains to events that require the non-Federal entity to comply with laws, regulations, and the provisions of contracts or grant agreements, such as: expenditure/expense transactions associated with grants, cost-reimbursement contracts, cooperative agreements and the disbursement of funds passed through to subrecipients.

No, fixed price contracts are not included in the threshold calculations. HHS financial assistance (typically grants and cooperative agreements) and HHS cost-reimbursement contracts that the for-profit entity receives directly from HHS or indirectly from a pass-through entity are to be included in the threshold calculations. (See threshold calculation examples.)

HHS grants/cooperative agreements or cost-reimbursement contract dollars received directly, as well as, indirectly (i.e., through a pass-through entity) must be included in the threshold calculation and the scope of any required audit. (See threshold calculation examples.)

The Yellow Book option is a financial statement audit of all HHS award activities of the commercial (for-profit) organization in accordance with Government Auditing Standards. For further technical information contact the National External Audit Review Center (see FAQ # 13 below).

The organization’s fiscal year.

Audits are required annually for each fiscal year that the threshold is met.

The OMB Uniform Guidance defines the term auditor as a public accountant or a Federal, State or local government audit organization, which meets the general standards specified in the generally accepted government auditing standards (GAGAS). This definition of the term auditor would not include internal auditors of the organization. (See the “Yellow Book” at http://www.gao.gov/govaud/ybk01.htm for GAGAS.)

The auditee pays for the audit. Audit costs are typically recovered as part of indirect costs.

45 CFR 75.512 essentially incorporates the deadlines of OMB Uniform Guidance; i.e., Audits shall be completed and submitted within the earlier of 30 days after receipt of the auditor’s report or nine months after the end of the organization’s fiscal year. Note: The Federal Acquisition Regulation requires submission of final indirect cost (IDC) rate proposals within six months of the end of the awardee’s fiscal year. It would therefore appear beneficial for the awardee to have the required audits completed within six months to allow for their use in the preparation of the IDC proposals.

No, for-profit entities should not complete a data collection form (SF-SAC). The data collection forms are used to enter data on audits of states, local governments and non-profit organizations in the Federal Audit Clearinghouse (FAC) database. For-profit entities should submit audits directly to the Department of Health and Human Services, Audit Resolution Division (see FAQ # 14 below for address). Audits of for-profit entities should not be sent to FAC.

Yes, the management letter is an integral part of the reporting package.

Audit reports of for-profit organizations are to be electronically submitted by email to:

Commercial organizations with HHS expenditures less than the audit requirement threshold are exempt from requirements for a non-Federal audit for that year, but records must be available for review by appropriate HHS officials.

Contact the HHS National External Audit Review Center at 1-800-732-0679

12-Month Single Audit Extension Granted Under M-20-11

M-20-11

• The 12-month single audit extension granted under M-20-11 applies to recipients that received one or more Federal awards (issued in FY 2020 prior to the 7/25/2020 expiration of the Secretary’s public health emergency (PHE) declaration*) to support the continued research and services necessary to carry out the emergency response related to COVID-19.
• The recipient of a COVID-19 award is eligible for the 12-month single audit extension unless the OPDIV that issued the award explicitly informs the recipient otherwise.
• Eligible recipients who decide to delay single audit submission 12-months beyond the normal due date are not required to seek prior approval or maintain supporting documentation.

*The Secretary may extend the PHE declaration.

 

6-Month Single Audit Extension Granted Under M-20-17

M-20-17

• The 6-month single audit extension granted under M-20-17 applies to recipients affected by the loss of operational capacity and increased costs due to COVID-19 that have not yet submitted their single audits to the Federal Audit Clearinghouse (FAC) as of the date of issuance of M-20-17 (3/19/2020), with fiscal years that end on or before 6/30/2020 (single audits due to the FAC prior to 3/19/2020 do not qualify).*
• No further action by awarding agencies is required to enact this extension. Eligible recipients who believe they were adversely affected by COVID-19 and who decide to delay single audit submission 6-months beyond the normal due date are not required to seek prior approval; however, they should maintain documentation of the reason for the delayed filing.
• OPDIVs have discretion in determining whether to ask eligible recipients for supporting documentation for the 6-month delay, taking into account the associated administrative burden for the recipients and HHS.

*OMB may extend these parameters.