215.97
Florida Single Audit Act.
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(1) The purposes of the section are to:
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(a) Establish uniform state audit requirements for state financial assistance
provided by state agencies to nonstate entities to carry out state projects.
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(b) Promote sound financial management, including effective internal controls, with
respect to state financial assistance administered by nonstate entities.
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(c) Promote audit economy and efficiency by relying to the extent possible on
already required audits of federal financial assistance provided to nonstate
entities.
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(d) Provide for identification of state financial assistance transactions in the
state accounting records and recipient organization records.
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(e) Promote improved coordination and cooperation within and between affected state
agencies providing state financial assistance and nonstate entities receiving
state assistance.
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(f) Ensure, to the maximum extent possible, that state agencies monitor, use, and
followup on audits of state financial assistance provided to nonstate entities.
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(2) Definitions; as used in this section, the term:
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(a) "Audit threshold" means the threshold amount used to determine when a state
single audit or project-specific audit of a nonstate entity shall be conducted
in accordance with this section. Each nonstate entity that expends a total
amount of state financial assistance equal to or in excess of $500,000 in any
fiscal year of such nonstate entity shall be required to have a state single
audit, or a project-specific audit, for such fiscal year in accordance with the
requirements of this section. Every 2 years the Auditor General, after
consulting with the Executive Office of the Governor, the Department of
Financial Services, and all state awarding agencies, shall review the threshold
amount for requiring audits under this section and may adjust such threshold
amount consistent with the purposes of this section.
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(b) "Auditing standards" means the auditing standards as stated in the rules of the
Auditor General as applicable to for-profit organizations, nonprofit
organizations, or local governmental entities.
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(c) "Catalog of State Financial Assistance" means a comprehensive listing of state
projects. The Catalog of State Financial Assistance shall be issued by the
Department of Financial Services after conferring with the Executive Office of
the Governor and all state awarding agencies. The Catalog of State Financial
Assistance shall include for each listed state project: the responsible state
awarding agency; standard state project number identifier; official title; legal
authorization; and description of the state project, including objectives,
restrictions, application and awarding procedures, and other relevant
information determined necessary.
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(d) "Coordinating agency" means the state awarding agency that provides the
predominant amount of state financial assistance expended by a recipient, as
determined by the recipient's Schedule of Expenditures of State Financial
Assistance. To provide continuity, the determination of the predominant amount
of state financial assistance shall be based upon state financial assistance
expended in the recipient's fiscal years ending in 2006, 2009, and 2012, and
every third year thereafter.
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(e) "Financial reporting package" means the nonstate entities' financial statements,
Schedule of Expenditures of State Financial Assistance, auditor's reports,
management letter, auditee's written responses or corrective action plan,
correspondence on followup of prior years' corrective actions taken, and such
other information determined by the Auditor General to be necessary and
consistent with the purposes of this section.
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(f) "Federal financial assistance" means financial assistance from federal sources
passed through the state and provided to nonstate organizations to carry out a
federal program. "Federal financial assistance" includes all types of federal
assistance as defined in applicable United States Office of Management and
Budget circulars.
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(g) "For-profit organization" means any organization or sole proprietor that is not
a governmental entity or a nonprofit organization.
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(h) "Independent auditor" means an independent certified public accountant
licensed under chapter 473.
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(i) "Internal control over state projects" means a process, effected by a nonstate
entity's management and other personnel, designed to provide reasonable
assurance regarding the achievement of objectives in the following categories:
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1. Effectiveness and efficiency of operations. |
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2. Reliability of financial operations. |
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3. Compliance with applicable laws and regulations. |
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(j) "Local governmental entity" means a county as a whole, municipality, or special
district or any other entity excluding a district school board, charter school,
community college, or public university, however styled, which independently
exercises any type of governmental function within the state.
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(k) "Major state project" means any state project meeting the criteria as stated in
the rules of the Department of Financial Services. Such criteria shall be
established after consultation with all state awarding agencies and shall
consider the amount of state project expenditures and expenses or inherent
risks. Each major state project shall be audited in accordance with the
requirements of this section.
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(l) "Nonprofit organization" means any corporation, trust, association,
cooperative, or other organization that:
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1. Is operated primarily for scientific, educational service, charitable, or
similar purpose in the public interest. |
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2. Is not organized primarily for profit. |
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3. Uses net proceeds to maintain, improve, or expand the operations of the
organization. |
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4. Has no part of its income or profit distributable to its members, directors,
or officers. |
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(m) "Nonstate entity" means a local governmental entity, nonprofit organization, or
for-profit organization that receives state financial assistance.
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(n) "Recipient" means a nonstate entity that receives state financial assistance
directly from a state awarding agency.
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(o) "Schedule of Expenditures of State Financial Assistance" means a document
prepared in accordance with the rules of the Department of Financial Services
and included in each financial reporting package required by this section.
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(p) "State awarding agency" means a state agency, as defined in s. 216.011,
that is primarily responsible for the operations and outcomes of a state
project, regardless of the state agency that actually provides state financial
assistance to a nonstate entity.
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(q) "State financial assistance" means state resources, not including federal
financial assistance and state matching on federal programs, provided to a
nonstate entity to carry out a state project. "State financial assistance"
includes the types of state resources stated in the rules of the Department of
Financial Services established in consultation with all state awarding agencies.
State financial assistance may be provided directly by state awarding agencies
or indirectly by nonstate entities. "State financial assistance" does not
include procurement contracts used to buy goods or services from vendors and
contracts to operate state-owned and contractor-operated facilities.
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(r) "State matching" means state resources provided to a nonstate entity to meet
federal financial participation matching requirements.
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(s) "State program" means a set of special purpose activities undertaken to realize
identifiable goals and objectives in order to achieve a state agency's mission
and legislative intent requiring accountability for state resources.
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(t) "State project" means a state program that provides state financial assistance
to a nonstate organization and that must be assigned a state project number
identifier in the Catalog of State Financial Assistance.
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(u) "State Projects Compliance Supplement" means a document issued by the Department
of Financial Services, in consultation with all state awarding agencies. The
State Projects Compliance Supplement shall identify state projects, the
significant compliance requirements, eligibility requirements, matching
requirements, suggested audit procedures, and other relevant information
determined necessary.
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(v) "State project-specific audit" means an audit of one state project performed in
accordance with the requirements of subsection (10).
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(w) "State single audit" means an audit of a nonstate entity's financial statements
and state financial assistance. Such audits shall be conducted in accordance
with the auditing standards as stated in the rules of the Auditor General.
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(x) "Subrecipient" means a nonstate entity that receives state financial assistance
through another nonstate entity.
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(y) "Vendor" means a dealer, distributor, merchant, or other seller providing goods
or services that are required for the conduct of a state project. These goods or
services may be for an organization's own use or for the use of beneficiaries of
the state project.
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(3) The Executive Office of the Governor is responsible for notifying the Department
of Financial Services of any actions during the budgetary process that impact
the Catalog of State Financial Assistance.
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(4) The Department of Financial Services shall:
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(a) Upon conferring with the Executive Office of the Governor and all state awarding
agencies, adopt rules necessary to provide appropriate guidance to state
awarding agencies, nonstate entities, and independent auditors of state
financial assistance relating to the requirements of this section, including:
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1. The types or classes of state resources considered to be state financial
assistance that would be subject to the requirements of this section. This would
include guidance to assist in identifying when the state awarding agency or a
nonstate entity has contracted with a vendor rather than with a recipient or
subrecipient. |
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2. The criteria for identifying a major state project. |
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3. The criteria for selecting state projects for audits based on inherent risk. |
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(b) Be responsible for coordinating revisions to the Catalog of State Financial
Assistance after consultation with the Executive Office of the Governor and all
state awarding agencies.
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(c) Be responsible for coordinating with the Executive Office of the Governor
actions affecting the budgetary process under paragraph (b).
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(d) Be responsible for coordinating revisions to the State Projects Compliance
Supplement, after consultation with the Executive Office of the Governor and
all state awarding agencies.
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(e) Make enhancements to the state's accounting system to provide for the:
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1. Recording of state financial assistance and federal financial assistance
appropriations and expenditures within the state awarding agencies' operating
funds. |
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2. Recording of state project number identifiers, as provided in the Catalog of
State Financial Assistance, for state financial assistance. |
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3. Establishment and recording of an identification code for each financial
transaction, including awarding state agencies' disbursements of state financial
assistance and federal financial assistance, as to the corresponding type or
organization that is party to the transaction (e.g., other governmental
agencies, nonprofit organizations, and for-profit organizations), and
disbursements of federal financial assistance, as to whether the party to the
transaction is or is not a nonstate entity. |
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(f) Upon conferring with the Executive Office of the Governor and all state awarding
agencies, adopt rules necessary to provide appropriate guidance to state
awarding agencies, nonstate entities, and independent auditors of state
financial assistance relating to the format for the Schedule of Expenditures of
State Financial Assistance.
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(g) Perform any inspections, reviews, investigations, or audits of state financial
assistance considered necessary in carrying out the Department of Financial
Services' legal responsibilities for state financial assistance or to comply
with the requirements of this section.
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(5) Each state awarding agency shall:
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(a) Provide to each recipient information needed by the recipient to comply
with the requirements of this section, including:
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1. The audit and accountability requirements for state projects as stated in this
section and applicable rules of the Department of Financial Services and rules
of the Auditor General. |
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2. Information from the Catalog of State Financial Assistance, including the
standard state project number identifier; official title; legal authorization;
and description of the state project including objectives, restrictions, and
other relevant information determined necessary. |
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3. Information from the State Projects Compliance Supplement, including the
significant compliance requirements, eligibility requirements, matching
requirements, suggested audit procedures, and other relevant information
determined necessary. |
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(b) Require the recipient, as a condition of receiving state financial assistance,
to allow the state awarding agency, the Department of Financial Services, and
the Auditor General access to the recipient's records and the recipient's
independent auditor's working papers as necessary for complying with the
requirements of this section.
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(c) Notify the recipient that this section does not limit the authority of the state
awarding agency to conduct or arrange for the conduct of additional audits or
evaluations of state financial assistance or limit the authority of any state
awarding agency inspector general, the Auditor General, or any other state
official.
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(d) Be provided one copy of each financial reporting package prepared in accordance
with the requirement of this section.
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(e) Review the recipient's financial reporting package, including the management
letters and corrective action plans, to the extent necessary to determine
whether timely and appropriate corrective action has been taken with respect to
audit findings and recommendations pertaining to state financial assistance that
are specific to the state awarding agency.
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(f) Designate within the state awarding agency an organizational unit that will be
responsible for reviewing financial reporting packages pursuant to paragraph
(e).
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If the state awarding agency is not the coordinating agency as defined in
paragraph (2)(d), the state awarding agency's designated organizational unit
shall communicate to the coordinating agency the state awarding agency's
approval of the recipient's corrective action plan with respect to findings and
recommendations that are not specific to the state awarding agency.
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(6) Each coordinating agency shall:
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(a) Review the recipient's financial reporting package, including the management
letter and corrective action plan, to identify audit findings and
recommendations that affect state financial assistance that are not specific to
a particular state awarding agency.
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(b) For any findings and recommendations identified pursuant to paragraph (a):
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1. Determine whether timely and appropriate corrective action has been taken. |
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2.Promptly inform the state awarding agency, as provided in paragraph (5)(f), of
actions taken by the recipient to comply with the approved corrective action
plan. |
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(c) Maintain records of followup actions taken for the use of any succeeding
coordinating agency.
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(7) As a condition of receiving state financial assistance, each
nonstate entity that provides state financial assistance to a subrecipient
shall:
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(a) Provide to each subrecipient information needed by the subrecipient to
comply with the requirements of this section, including:
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1. Identification of the state awarding agency. |
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2. The audit and accountability requirements for state projects as stated in
this section and applicable rules of the Department of Financial Services and
rules of the Auditor General. |
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3. Information from the Catalog of State Financial Assistance, including the
standard state project number identifier; official title; legal authorization;
and description of the state project, including objectives, restrictions, and
other relevant information. |
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4. Information from the State Projects Compliance Supplement including the
significant compliance requirements, eligibility requirements, matching
requirements, and suggested audit procedures, and other relevant information
determined necessary. |
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(b) Review the financial reporting package of the subrecipient, including the
management letter and corrective action plan, to the extent necessary to
determine whether timely and appropriate corrective action has been taken with
respect to audit findings and recommendations pertaining to state financial
assistance provided by a state awarding agency or nonstate entity.
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(c) Perform any other procedures specified in terms and conditions of the written
agreement with the state awarding agency or nonstate entity, including any
required monitoring of the subrecipient's use of state financial assistance
through onsite visits, limited scope audits, or other specified procedures.
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(d) Require subrecipients, as a condition of receiving state financial assistance,
to permit the independent auditor of the nonstate entity, the state awarding
agency, the Department of Financial Services, and the Auditor General access to
the subrecipient's records and the subrecipient's independent auditor's working
papers as necessary to comply with the requirements of this section.
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(8) Each recipient or subrecipient of state financial assistance
shall comply with the following:
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(a) Each nonstate entity that meets the audit threshold requirements, in any fiscal
year of the nonstate entity, stated in the rules of the Auditor General, shall
have a state single audit conducted for such fiscal year in accordance with the
requirements of this act and with additional requirements established in rules
of the Department of Financial Services and rules of the Auditor General. If
only one state project is involved in a nonstate entity's fiscal year, the
nonstate entity may elect to have only a state project-specific audit.
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(b) Each nonstate entity that does not meet the audit threshold requirements, in any
fiscal year of the nonstate entity, stated in this law or the rules of the
Auditor General is exempt for such fiscal year from the state single audit
requirements of this section. However, such nonstate entity must meet terms and
conditions specified in the written agreement with the state awarding agency or
nonstate entity.
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(c) If a nonstate entity has extremely limited or no required activities related to
the administration of a state project, and only acts as a conduit of state
financial assistance, none of the requirements of this section apply to the
conduit nonstate entity. However, the nonstate entity that is provided state
financial assistance by the conduit nonstate entity is subject to the
requirements of this section.
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(d) Regardless of the amount of the state financial assistance, this section does
not exempt a nonstate entity from compliance with provisions of law relating to
maintaining records concerning state financial assistance to such nonstate
entity or allowing access and examination of those records by the state awarding
agency, the nonstate entity, the Department of Financial Services, or the
Auditor General.
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(e) Audits conducted pursuant to this section shall be performed annually.
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(f) Audits conducted pursuant to this section shall be conducted by independent
auditors in accordance with auditing standards stated in rules of the Auditor
General.
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(g) Upon completion of the audit required by this section, a copy of the recipient's
financial reporting package shall be filed with the state awarding agency and
the Auditor General. Upon completion of the audit required by this section, a
copy of the subrecipient's financial reporting package shall be filed with the
nonstate entity that provided the state financial assistance and the Auditor
General. The financial reporting package shall be filed in accordance with the
rules of the Auditor General.
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(h) All financial reporting packages prepared pursuant to this section shall be
available for public inspection.
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(i) If an audit conducted pursuant to this section discloses any significant audit
findings relating to state financial assistance, including material
noncompliance with individual state project compliance requirements or
reportable conditions in internal controls of the nonstate entity, the nonstate
entity shall submit as part of the financial reporting package to the state
awarding agency or nonstate entity a plan for corrective action to eliminate
such audit findings or a statement describing the reasons that corrective action
is not necessary.
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(j) An audit conducted in accordance with this section is in addition to any audit
of federal awards required by the federal Single Audit Act and other federal
laws and regulations. To the extent that such federally required audits provide
the state awarding agency or nonstate entity with information it requires to
carry out its responsibilities under state law or other guidance, the state
awarding agency or nonstate entity shall rely upon and use that information.
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(k) Unless prohibited by law, the costs of audits pursuant to this section are
allowable charges to state projects. However, any charges to state projects
should be limited to those incremental costs incurred as a result of the audit
requirements of this section in relation to other audit requirements. The
nonstate entity should allocate such incremental costs to all state projects for
which it expended state financial assistance.
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(l) Audit costs may not be charged to state projects when audits required by this
section have not been made or have been made but not in accordance with this
section. If a nonstate entity fails to have an audit conducted consistent with
this section, a state awarding agency or nonstate entity may take appropriate
corrective action to enforce compliance.
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(m) This section does not prohibit the state awarding agency or nonstate entity from
including terms and conditions in the written agreement which require additional
assurances that state financial assistance meets the applicable requirements of
laws, regulations, and other compliance rules.
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(n) A state awarding agency or nonstate entity that conducts or arranges for audits
of state financial assistance that are in addition to the audits conducted under
this act, including audits of nonstate entities that do not meet the audit
threshold requirements, shall, consistent with other applicable law, arrange for
funding the full cost of such additional audits.
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(o) A contract involving the State University System or the Florida Community
College System funded by state financial assistance may be in the form of:
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1. A fixed-price contract that entitles the provider to receive full compensation
for the fixed contract amount upon completion of all contract deliverables;
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2. A fixed-rate-per-unit contract that entitles the provider to receive
compensation for each contract deliverable provided;
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3. A cost-reimbursable contract that entitles the provider to receive compensation
for actual allowable costs incurred in performing contract deliverables; or
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4. A combination of the contract forms described in subparagraphs 1., 2., and 3.
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(9) The independent auditor when conducting a state single audit of
a nonstate entity shall:
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(a) Determine whether the nonstate entity's financial statements are presented
fairly in all material respects in conformity with generally accepted accounting
principles.
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(b) Determine whether state financial assistance shown on the Schedule of
Expenditures of State Financial Assistance is presented fairly in all material
respects in relation to the nonstate entity's financial statements taken as a
whole.
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(c) With respect to internal controls pertaining to each major state project:
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1. Obtain an understanding of internal controls. |
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2. Assess control risk. |
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3. Perform tests of controls unless the controls are deemed to be ineffective. |
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4. Determine whether the nonstate entity has internal controls in place to provide
reasonable assurance of compliance with the provisions of laws and rules
pertaining to state financial assistance that have a material effect on each
major state project. |
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(d) Determine whether each major state project complied with the provisions of laws,
rules, and guidelines as identified in the State Projects Compliance Supplement,
or otherwise identified by the state awarding agency, which have a material
effect on each major state project. When major state projects are less than 50
percent of the nonstate entity's total expenditures for all state financial
assistance, the auditor shall select and test additional state projects as major
state projects as necessary to achieve audit coverage of at least 50 percent of
the expenditures for all state financial assistance provided to the nonstate
entity. Additional state projects needed to meet the 50-percent requirement may
be selected on an inherent risk basis as stated in the rules of the Department
of Financial Services.
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(e) Report on the results of any audit conducted pursuant to this section in
accordance with the rules of the Department of Financial Services and rules of
the Auditor General. Financial reporting packages shall include summaries of the
auditor's results regarding the nonstate entity's financial statements; Schedule
of Expenditures of State Financial Assistance; internal controls; and compliance
with laws, rules, and guidelines.
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(f) Issue a management letter as prescribed in the rules of the Auditor
General.
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(g) Upon notification by the nonstate entity, make available the working papers
relating to the audit conducted pursuant to this section to the state awarding
agency, the Department of Financial Services, or the Auditor General for review
or copying.
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(10) The independent auditor, when conducting a state
project-specific audit of a nonstate entity, shall:
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(a) Determine whether the nonstate entity's schedule of Expenditure of State
Financial Assistance is presented fairly in all material respects in conformity
with stated accounting policies.
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(b) Obtain an understanding of internal controls and perform tests of internal
controls over the state project consistent with the requirements of a major
state project.
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(c) Determine whether or not the auditee has complied with applicable provisions of
laws, rules, and guidelines identified in the State Projects Compliance
Supplement, or otherwise identified by the state awarding agency, which could
have a direct and material effect on the state project.
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(d) Report on the results of the state project-specific audit consistent with the
requirements of the state single audit and issue a management letter as
prescribed in the rules of the Auditor General.
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(e) Upon notification by the nonstate entity, make available the working papers
relating to the audit conducted pursuant to this section to the state awarding
agency, the Department of Financial Services, or the Auditor General for review
or copying.
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(11) The Auditor General shall:
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(a) Have the authority to audit state financial assistance provided to any nonstate
entity when determined necessary by the Auditor General or when directed by the
Legislative Auditing Committee.
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(b) Adopt rules that state the auditing standards that independent auditors are to
follow for audits of nonstate entities required by this section.
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(c) Adopt rules that describe the contents and the filing deadlines for the
financial reporting package.
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(d) Provide technical advice upon request of the Department of Financial Services
and state awarding agencies relating to financial reporting and audit
responsibilities contained in this section.
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(e) Be provided one copy of each financial reporting package prepared in accordance
with this section.
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(f) Perform ongoing reviews of a sample of financial reporting packages filed
pursuant to this section to determine compliance with the reporting requirements
of this section and applicable rules of the Department of Financial Services and
rules of the Auditor General.
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History.--s. 2, ch. 98-91; s. 58, ch. 2000-371; s. 233, ch. 2003-261; s. 11, ch. 2005-152;
ss. 14, 16, ch. 2006-122.
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Note.--Former s. 216.3491.
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