ACCT567 Single Audit Problem 12-4

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ACCT567 Single Audit Problem 12-4
Single Audit, Internet Case. A not-for-profit organization has hired you to conduct…

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ACCT567 Single Audit Problem 12-4

ACCT567 Single Audit Problem 12-4

Homework A+

A not-for-profit organization has hired you to conduct an audit. The audit has been requested by the organization’s board of directors. A mission of the organization is to provide for the education of children in the economically distressed area of the city. In fulfilling its mission, the organization operates a Head Start program, a K-3 elementary school, and an after-school kids program. To help fund its mission, the organization receives funds from several sources, including federal programs. The federal programs and the amount of funding expended from each program for the fiscal year are as follows:

Required

It may be helpful to use the Catalog of Federal Domestic Assistance (CFDA) Web site (www.cfda.gov) and the OMB Circular A–133 Compliance Supplement (www.whitehouse.gov/OMB/circulars) to answer the following questions.

  1. What federal departments are sponsoring the programs listed?
  2. OMB allows “cluster programs” to be considered as a single program when conducting the risk-based approach to selecting programs for audits under the single audit. Of the programs listed, which (if any) are part of the same cluster?
  3. Based on size alone, are there any Type A programs or other programs that would be exempt from audit under the risk-based approach?
  4. Based on size alone, which programs would you select for audit and why?
  5. If the not-for-profit has received an unqualified opinion in each of the last two years and the Head Start program was selected for audit in both years, would the programs you select for audit change? If not, why not? If so, what programs would you select and why?
  6. Reading the objectives of the programs identified, you will notice a common underlying objective. Since the ability to obtain funds depends on meeting this underlying objective, it should be considered a major compliance issue for the auditor. What is the objective? What compliance item is particularly affected by this underlying objective?