As part of its
subrecipient monitoring functions, the Federal Fiscal Monitoring Division reviews
the single-audit reports for federal grant subrecipients that receive federal
grants from TEA. This monitoring is done to ensure that federal grants are used
for authorized purposes, in compliance with federal statutes, regulations, and
the terms and conditions of federal awards, a requirement given to TEA in Title
2 of the Code of Federal Regulations (CFR), 200.331. This web page
describes single-audit requirements for both subrecipients and TEA, the
monitoring process, and what you can expect if your organization’s single-audit
Subrecipient Single-Audit Requirements
must have a single-audit conducted by an independent auditor if it expends $750,000 or more in federal grant funds in that fiscal year. This requirement is given
in 2 CFR 200.501(a).
Submitting the Single-Audit Report to TEA
that are local education agencies (LEAs), such as school districts and open-enrollment
charter schools, must submit the single-audit report to TEA with their annual
financial and compliance reports (AFRs) and must also submit their AFRs to
Audit Clearinghouse. More
information about submitting
the AFR to TEA is available
online from the TEA Financial Compliance Division.
that are not LEAs, such as nonprofit organizations, must also submit their
single-audit reports to TEA. If your organization receives federal grants
funds, TEA will send you a letter each fiscal year asking you to submit your single-audit
report or to certify that the requirement does not apply to your organization
because you did not expend more than $750,000 in federal grant funds.
Other Requirements for Subrecipients
of federal grant funds must comply with all of the single-audit requirements
for auditees given in 2 CFR 200.508.
Single-Audit Requirement for TEA
TEA is required
by 2 CFR 200.331(d)(3) and 200.521(a) and (c) to issue a management
decision for all findings in a subrecipient’s single-audit report that involve
federal grants awarded by TEA. The management decision states whether the
agency sustains or does not sustain each single-audit finding and the reason
for doing so.
The agency must
issue the management decision within six months of either the date it receives
the single-audit report or the date the report is accepted by the Federal Audit
Clearinghouse, whichever is earliest.
TEA is also
required to follow up with subrecipients to ensure they complete corrective
actions that address the findings. The management decision includes any
corrective actions that need to be completed and a deadline for
completion. Some corrective actions may include an enforcement action that
requires the subrecipient to return federal funds to TEA. TEA's requirements to
follow up on single-audit findings are given in 2 CFR 200.331(d)(2) and
TEA’s Single-Audit Monitoring Process
Federal Fiscal Monitoring
Division staff review each single-audit report and each finding related to
federal grants administered by TEA identified by an independent auditor.
Sustaining or Not Sustaining Each Finding
carefully review the single-audit report and the subrecipient's management
response for each finding in making the determination to sustain or not sustain
the finding. In general, division staff sustain a finding, unless they
determine that at least one of the following is true:
- The independent auditor
misinterpreted federal statute.
- There is new federal guidance that
was not available to the auditor when the single-audit was conducted.
As part of their review, division staff verify
that the independent auditor applied the correct federal regulations when
conducting the single audit. If the independent auditor did not apply the
correct regulations, division staff may not sustain the finding.
If your single-audit findings include questioned costs, staff may correspond
with you about specific questions related to the questioned costs.
TEA may also ask you about questioned costs not identified in the
single-audit report, but which staff believe the independent auditor should have
associated with a certain finding. In this situation, staff will instruct you
to contact your independent auditor, who must calculate a questioned cost
The Management Decision
staff decide to sustain or not sustain each of your organization's findings,
they issue the management decision, which will give the reason for each
decision. The management decision will include corrective actions required to
address the findings and timeline to complete them.
If you have not
already completed corrective actions to address each single-audit finding, your
organization's management decision will include a specific required action and
a deadline for completion. For example, if a finding was related to missing time
and effort documentation, TEA may require you to submit a copy of your internal
policies and procedures to demonstrate that you have addressed the
If TEA sustains
findings with questioned costs, it will usually disallow the costs and impose a
corrective action that requires your organization to return funds to TEA. Your
organization's management decision will include the refund amount, the deadline
for submitting the refund, and other information.
organization may also have to complete corrective actions for findings with
Please see the Corrective Actions Related to Federal Grants
and Opportunity for a Hearing page for more
information about corrective actions and enforcement actions.
Notice of Agency Policy
federal fiscal grant subrecipient monitoring and compliance reviews, and
implements related enforcement actions, in accordance with its established
policies and procedures. These policies and procedures incorporate best
practices and standards that may be similar to common auditing standards, but
the agency does not apply a specific set of external standards, such as the US
Government Accountability Office’s Generally Accepted Government Auditing
Standards (Yellow Book), nor is it required to do so.