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Division of Accounting and Auditing
CHAPTER 69I-5 SCHEDULE OF EXPENDITURES OF STATE FINANCIAL ASSISTANCE
69I-5.001 Applicability.
69I-5.002 Definitions.
69I-5.003 Format of Schedule.
69I-5.004 Types of State Financial Assistance.
69I-5.005 State Project Determination.
69I-5.006 Recipient/Subrecipient and Vendor Relationships.
69I-5.007 State Project Compliance Supplement.
69I-5.008 Criteria for Identifying Major State Projects.
69I-5.009 Criteria for Selecting State Projects for Audits Based on Inherent Risk.
69I-5.010 Approval of Non-State Entity Conduits.
69I-5.001 Applicability.

These rules apply to state agencies awarding state financial assistance; recipients and subrecipients of state financial assistance; and to independent auditors of state financial assistance.
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 2-5-01, Formerly 3A-5.001.
69I-5.002 Definitions.

(1) The terms in Section 215.97(2), F.S., shall have the same meanings when used in this chapter and are hereby incorporated by reference.

(2) “State agency” or “agency” as defined in Section 216.011(1)(qq), F.S., shall have the same meanings when used in this chapter and are hereby incorporated by reference.
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 2-5-01, Formerly 3A-5.002.
69I-5.003 Format of Schedule.

(1) The Schedule of Expenditures of State Financial Assistance shall be included on the non-state entity’s Schedule of Expenditures of Federal Awards and State Financial Assistance. If a non-state entity does not receive federal financial assistance, a Schedule of Expenditures of State Financial Assistance shall be prepared. At a minimum, the Schedule of Expenditures of State Financial Assistance shall be prepared. At a minimum the Schedule of Expenditures of State Financial Assistance:
  (a) List individual state projects by state agency, including identifying contract or grant number.
(b) For state financial assistance received as a subrecipient, the name of the pass-through entity and identifying contract/grant number assigned by the pass-through entity.
(c) Provide total state financial assistance expended for each individual state project and the CSFA number.
(d) Provide total state financial assistance transferred to subrecipients for each state project.
(e) Include as expenditures in the schedule, the value of state financial assistance expended in the form of non-cash assistance. The value of state non-cash assistance will be established in accordance with paragraph 69I-5.004(2)(c), F.A.C.
(f) Include notes that describe the significant accounting policies used in preparing the schedule.

(2) The Schedule of Expenditures of Federal Awards and State Financial Assistance shall be in a format similar to the sample presented below:
NAME OF NONSTATE ENTITY
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
AND STATE FINANCIAL ASSISTANCE
For the Fiscal Year Ended Month/Date/Year
Federal/State Agency, CFDA Contract/   Transfers
Pass-through Entity, CSFA Grant Expenditures to Subrecipients
Federal Program/State Project No. No. (in thousands) (in thousands)
FEDERAL AGENCY NAME
     Direct Programs
XXXXX XXXXX XXXXX XXXXX XXXXX
     Indirect Programs
     Passed through (insert name of entity)
XXXXX XXXXX XXXXX XXXXX XXXXX
TOTAL FEDERAL AGENCY   XXXXX XXXXX
TOTAL EXPENDITURES OF FEDERAL   XXXXX XXXXX
AWARDS  
STATE AGENCY NAME
     Direct Projects
XXXXX XXXXX XXXXX XXXXX XXXXX
     Indirect Projects
     Passed through (insert name of entity)
XXXXX XXXXX XXXXX XXXXX XXXXX
TOTAL STATE AGENCY   XXXXX XXXXX
TOTAL EXPENDITURES OF STATE   XXXXX XXXXX
FINANCIAL ASSISSTANCE  
* denotes major programs/projects  
For the Fiscal Year Ended Month/Date/Year
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 2-5-01, Formerly 3A-5.003, Amended 11-1-05.
69I-5.004 Types of State Financial Assistance.

(1) State financial assistance is financial assistance from state resources to non-state organizations to carry out a state project. It does not include federal financial assistance and state matching provided by state agencies for federal programs. State financial assistance shall be categorized by the following classes or types of financial assistance:
  (a) Cooperative Agreements – Financial assistance transferred pursuant to written agreements between state agencies and recipients to carry out a public purpose. Cooperative agreements generally assume a substantial involvement between state agencies and recipients when carrying out the activities contemplated in the agreements.
(b) Direct Appropriations – Financial assistance appropriated to state agencies to be provided directly to specified non-state entities per legislative proviso to encourage or subsidize particular activities.
(c) Food Commodities – Financial assistance which provides for the sale or donation of food.
(d) Grants – Financial assistance transferred pursuant to written agreements between state agencies and recipients to carry out a public purpose. Generally, a substantial involvement is not expected between state agencies and recipients when carrying out the activities contemplated in the agreements.
(e) Insurance – Financial assistance provided to assure reimbursement for losses sustained under specified conditions.
(f) Investments – Financial assistance provided for investment in the development of particular activities or enterprises.
(g) Loans – Financial assistance provided through the lending of state monies for a specific period of time, with a reasonable expectation of repayment. Such loans may or may not require the payment of interest.
(h) Loan Guarantees – Financial assistance provided in which the state agency makes an arrangement to indemnify a lender against part or all of any defaults by those responsible for repayment of loans.
(i) Property – Financial assistance provided for the sale, exchange, or donation of state real property, personal property, commodities, and other goods including land, buildings, and equipment.
(j) Tax Credits – Financial assistance provided in the form of credits of state taxes for a public purpose authorized by state law.
(k) Tax Refunds – Financial assistance provided in the form of refunds of state taxes for a public purpose authorized by state law.

(2) The following provisions are to be used in determining state financial assistance expended.
  (a) The determination of when state financial assistance is expended should be based on when the related activity occurs. Generally, the activity pertains to events that require the non-state organization to comply with laws, rules, and the provisions of contracts or grant agreements such as: expenditure/expense transactions associated with grants, cooperative agreements, and direct appropriations; the disbursement of funds passed through to subrecipients; the use of loan proceeds under loan and loan guarantee programs; the receipt of property or food commodities; the receipt of tax refunds; the application of tax credits against tax liabilities; and the period when insurance is in force.
(b) Loans and Loan guarantees. Since the state is at risk for loans until the debt is repaid, the value of the state financial assistance expended under loan programs should include the value of new loans made or received during the non-state organization’s fiscal year; plus the balance of loans from previous years for which the state imposes continuing compliance requirements; plus any interest subsidy, cash, or administrative cost allowance received. Prior loans and loan guarantees, the proceeds of which were received and expended in prior years, are not considered state financial assistance expended when the laws, rules, and provisions of contracts or grant agreements pertaining to such loans impose no continuing compliance requirements other than to repay the loans.
(c) Property and Food Commodities. Non-cash assistance, such as property and food commodities are to be valued at either the fair market value at the time of receipt or the assessed value provided by the state agency.
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 11-1-05.
69I-5.005 State Project Determination.

(1) State agencies shall use the Florida Single Audit Act State Project Determination Checklist (Form DFS-A2-PD) (Effective 7/05) to evaluate the applicability of the Florida Single Audit Act to a state program for inclusion in the Catalog of State Financial Assistance.

(2) State agencies shall submit the completed checklist to the Department of Financial Services, Bureau of Auditing, 200 E. Gaines Street, Tallahassee, Florida 32399-0355. If the state program has been determined to be a state project, the state agency shall also request a Catalog of State Financial Assistance number by completing and submitting to the Department an Agency Request Form for New CSFA Project Number (Form DFS-A2-AR) (Effective 7/05).

(3) The Department shall evaluate the request for a Catalog of State Financial Assistance number. If the request is approved, the Department shall add the state project to the Catalog of State Financial Assistance.

(4) State agencies shall annually be required to certify the accuracy and completeness of its state projects included in the Catalog of State Financial Assistance by completing and submitting the Catalog of State Financial Assistance Agency Certification (Form DFS-A2-AC) (Effective 7/05) to the Department.

(5) Copies of Forms DFS-A2-PD, DFS-A2-AR, DFS-A2-AC, which are hereby incorporated by reference, can be obtained at the Department’s website at https://apps.fldfs.com/fsaa.
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 11-1-05.
69I-5.006 Recipient/Subrecipient and Vendor Relationships.

(1) State awards expended by a recipient/subrecipient are subject to audit under Section 215.97, F.S., the “Florida Single Audit Act”. Procurement contracts used to buy goods and services from vendors are outside the scope of the Act.

(2) The Florida Single Audit Act Checklist for Non-State Organizations – Recipient/Subrecipient vs. Vendor Determination (DFS-A2-NS) (Effective 7/05) shall be used to determine the applicability of the Florida Single Audit Act to non-state organizations. State agencies, recipients, and subrecipients that provide state financial assistance to non-state organizations shall complete this form and retain it in their records.

(3) Whenever a non-state organization is determined to be a recipient or subrecipient of state or federal financial assistance, the standard audit language contained on Form DFS-A2-CL (Effective 7/05) must be included in the document that establishes the State’s, recipient’s, or subrecipient’s relationship with the non-state entity.

(4) Copies of Forms DFS-A2-NS and DFS-A2-CL, which are hereby incorporated by reference, may be obtained at the Department’s website at https://apps.fldfs.com/fsaa.
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 11-1-05.
69I-5.007 State Project Compliance Supplement.

(1) State awarding agencies, in consultation with the Department, shall evaluate its state projects for inclusion in the State Project Compliance Supplement.

(2) State awarding agencies shall complete and submit to the Department the Agency Reporting Form for the State Projects Compliance Supplement (Form DFS-A2-CS) (Effective 7/05) for each state project to be included in the State Project Compliance Supplement.

(3) A copy of Form DFS-A2-CS, which is hereby incorporated by reference, may be obtained at the Department’s website at https://apps.fldfs.com/fsaa.
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 11-1-05.- 24
69I-5.008 Criteria for Identifying Major State Projects.

(1) The independent auditor shall use a risk-based approach to determine which state projects are major state projects. This risk-based approach shall include consideration of the amount of state project expenditures and the inherent risk of the state project. The process enumerated in subsections (2) through (6) shall be followed.

(2) The independent auditor shall identify the larger state projects as Type A Projects according to the following criteria:
  (a) For auditees with expenditures of state awards between $300,000 and $1,000,000, Type A Projects are defined as the larger of $100,000 or thirty percent (30%) of total state awards expended.
(b) For auditees with expenditures of state awards exceeding $1,000,000, Type A Projects are defined as the larger of $300,000 or three percent (3%) of total state awards expended.

(3) State projects not identified as Type A Projects shall be considered Type B Projects.

(4) The independent auditor shall identify Type A Projects which are low-risk. For a Type A Project to be considered low-risk, it should have been audited as a major state project in at least one of the two most recent audit periods and, in the most recent audit period, it should have had no reportable audit findings. The auditor shall consider the criteria enumerated in Rule 69I-5.009, F.A.C., the results of audit follow-up, and any significant changes in personnel or systems affecting a Type A Project, in applying professional judgment in determining whether a Type A Project is low-risk.

(5) The independent auditor shall identify Type B Projects which are high-risk. The auditor shall consider the criteria enumerated in Rule 69I-5.009, F.A.C., in applying professional judgment in determining whether a Type B Project is high-risk. However, the independent auditor is not expected to perform risk assessments on relatively small state projects. Therefore, the auditor is only required to perform risk assessments on Type B Projects as follows:
  (a) For auditees with expenditures of state awards of $300,000 to $1,000,000, risk assessments shall be required for Type B Projects that exceed the larger of $50,000 or ten percent (10%) of total state awards expended.
(b) For auditees with expenditures of state awards that exceed $1,000,000, risk assessments shall be required for Type B Projects that exceed the larger of $100,000 or one percent (1%) of total state awards expended.

(6) At a minimum, the independent auditor shall audit all of the following as major projects:
  (a) All Type A Projects, except the auditor may exclude any low-risk Type A Projects.
(b) At least one half of the Type B Projects identified as high-risk, except the auditor is not required to audit more high-risk Type B Projects than the number of low-risk Type A Projects; or one high-risk Type B Project for each low-risk Type A Project identified. The auditor is encouraged to use an approach which provides an opportunity for different high-risk Type B Projects to be audited as a major project over a period of time.
(c) Additional projects as may be necessary to provide audit coverage of at least fifty percent (50%) of the auditee’s expenditures of state awards. Wherever practicable, additional projects should be selected in accordance with the criteria enumerated in Rule 69I-5.009, F.A.C.
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 11-1-05.
69I-5.009 Criteria for Selecting State Projects for Audits Based on Inherent Risk.

(1) The independent auditor’s selection of state projects for audit shall be based on an overall analysis and evaluation of the risk of noncompliance occurring which could be material to the state project. The auditor shall use professional judgment and consider criteria, such as described in subsections (2) through (4) below, to identify risk in state projects. Also, as part of the risk analysis, the auditor may wish to discuss a particular state project with auditee management and the awarding state agency.

(2) The independent auditor shall consider current and prior audit experience.
  (a) Weakness in internal controls over state financial assistance would indicate higher risk. Consideration should be given to the control environment over state financial assistance and such factors as the expectation of management’s adherence to applicable laws, rules, and contract/grant provisions, and the competence and experience of personnel who administer the state financial assistance project.
(b) Prior audit findings would indicate higher risk, particularly when situations identified in the audit finding could have a significant impact on state financial assistance or have not been corrected.
(c) State projects not recently audited as major state projects may be of higher risk than state projects recently audited as major state projects without audit findings.

(3) The independent auditor shall consider the extent of any oversight exercised by the state agencies and the results of any monitoring performed.

(4) When evaluating state projects, independent auditors shall consider the inherent risk of the project, which includes the following:
  (a) The nature of the project. This includes, for example, a project’s complexity, the presence of third parties, and the type of costs involved.
(b) The phase of the project in its life cycle at the state agency. A new project may not be as time-tested and, therefore, may present higher risk. The state agency’s monitoring procedures may not yet be implemented or effectively in place. Significant changes in the program, laws, rules, or contracts or grant agreements may also increase risk.
(c) The phase of the project in its life cycle at the auditee. If a project is new to the auditee, there may be higher risk simply because a learning curve may be present. During the first and last years that an auditee participates in a state project, the risk may be higher due to start-up or closeout of program activities and staff.
(d) Type B Projects with larger expenditures. Projects with larger amounts of expenditures would be of higher risk than projects with substantially smaller expenditures.
(5) The independent auditor shall document in the working papers the risk analysis process used in determining major projects. State agencies may provide auditors guidance about the risk of a particular state project and the auditor shall consider this guidance in determining major projects in audits not yet substantially completed.
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 11-1-05.
69I-5.010 Approval of Non-State Entity Conduits.

The state awarding agency and the Department must approve a non-state entity’s status as a conduit of state financial assistance.
Specific Authority 215.97(4) FS. Law Implemented 215.97 FS. History–New 11-1-05.
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