E8-13385. OMB Circular A-133 Information Collection under OMB Review

AGENCY:

Office of Management and Budget.

ACTION:

Notice of Submission for OMB Review, Comment Request.

SUMMARY:

In accordance with the Paperwork Reduction Act of 1980, as amended (44 U.S.C. 3501 et seq.), this notice announces that an information collection request was submitted to the Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA) for processing under 5 CFR 1320.10. The first notice of this information collection request, as required by the Paperwork Reduction Act, was published in the Federal Register on December 5, 2007 [72 FR 68608]. The information collection request involves two proposed information collections from two types of entities: (1) Reports from auditors to auditees concerning audit results, audit findings, and questioned costs; and (2) reports from auditees to the Federal Government providing information about the auditees, the awards they administer, and the audit results. These collection efforts are required by the Single Audit Act Amendments of 1996 (31 U.S.C. 7501 et seq.) and OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations.” Circular A-133's information collection requirements apply to approximately 36,000 States, local governments, and non-profit organizations on an annual basis.

DATES:

Submit comments on or before July 16, 2008. Late comments will be considered to the extent practicable.

ADDRESSES:

Due to potential delays in OMB's receipt and processing of mail sent through the U.S. Postal Service, we encourage respondents to submit comments electronically to ensure timely receipt. We cannot guarantee that comments mailed will be received before the comment closing date.

Electronic mail comments may be submitted via the Internet to [e-mail]. Please include “Form SF-SAC Comments” in the subject line and the full body of your comments in the text of the electronic message and not as an attachment. Please include your name, title, organization, postal address, telephone number and E-mail address in the text of the message. You may also submit comments via Facsimile to (202-395-7285).

Comments may be mailed to Alexander Hunt, Office of Information and Regulatory Affairs, OMB, 725 17th Street, NW., Room 10236, Washington, DC 20503.

Comments may also be sent to via http://www.regulations.gov—a Federal E-Government Web site that allows the public to find, review, and submit comments on documents that agencies have published in the Federal Register and that are open for comment. Simply type “Form SF-SAC Comments” (in quotes) in the Comment or Submission search box, click Go, and follow the instructions for submitting comments. Comments received by the date specified above will be included as part of the official record.

FOR FURTHER INFORMATION CONTACT:

For further information, contact Gilbert Tran, Office of Federal Financial Management, Office of Management and Budget, 202-395-3052 and via e-mail: [e-mail]. The data collection form, SF-SAC, and its instructions can be obtained by contacting the Office of Federal Financial Management, as indicated above or by download from the OMB Grants Management home page on the Internet at http://www.whitehouse.gov/​omb/​grants/​grants_​forms.html.

SUPPLEMENTARY INFORMATION:

A. Background

OMB Control No.: 0348-0057.

Title: Data Collection Form.

Form No: SF-SAC.

Type of Review: Reinstatement with change.

Respondents: States, local governments, non-profit organizations (Non-Federal entities) and their auditors.

Estimated Number of Respondents: 72,000 (36, 000 from auditors and 36,000 from auditees). The respondents' information is collected by the Federal Audit Clearinghouse (Maintained by the U.S. Bureau of Census).

Estimated Time per Respondent: 59 hours for each of 400 large respondents and 17 hours for each of 71,600 small respondents for estimated annual burden hours of 1,240,800.

Estimated Number of Responses per Respondent: 1.

Frequency of Response: Annually.

Needs and Uses: Reports from auditors to auditees and reports from auditees to the Federal government are used by non-Federal entities, pass-through entities, and Federal agencies to ensure that Federal awards are expended in accordance with applicable laws and regulations. The Federal Audit Clearinghouse (FAC) (maintained by the U.S. Census Bureau) uses the information on the SF-SAC to ensure proper distribution of audit reports to Federal agencies and to identify non-Federal entities who have not filed the required reports. The FAC also uses the information on the SF-SAC to create a government-wide database which contains information on audit results. This database is publicly accessible on the Internet at http://harvester.census.gov/​fac/​. It is used by Federal agencies, pass-through entities, non-Federal entities, auditors, the General Accounting Office, OMB, and the general public for management and information about Federal awards and the results of audits.

B. Public Comments and Responses

Pursuant to the December 5, 2007, Federal Register notice, OMB received 44 comments from 7 commenters relating to the proposed revision to the information collection. Letters came from State governments (including State auditors), the American Institute of Certified Public Accountants, certified public accountants (CPAs), and Federal agencies. The comments received relating to the information collection and OMB's responses are summarized below.

General

Comments: All commenters, except one, supported the proposed revisions to both the Form and related instructions. The one commenter suggested a delayed implementation for electronic filing (see response in the “Electronic Filing” section). Some requested clarifications on the Form's instructions.

Terminology Changes

Comments: All commenters supported the terminology from “Reportable Conditions” to reflect “Significant Deficiencies” and the definition change for “Material Weaknesses” in line with changes in A-133 due to AICPA's Statement on Auditing Standard (SAS) No. 112, “Communicating Internal Control Related Matters Identified in an Audit.”

Electronic Filing

Comments: All commenters, except one, supported the proposal to require all-electronic filing. The one commenter felt it is too early to put the requirement in place due to inadequate Internet access and computer savvy among many local government and non-profit auditees.

Response: OMB feels the requirement will prompt most auditees and auditors to make the minor technological improvements needed to comply. Currently, 87% of the SF-SAC Forms are filled out on-line. Only 2% of those contained errors relating to signatures and dates. The proposed electronic submission will eliminate signature errors. Of the remaining 13% of the forms that were filled out manually, 25% of those contained errors that would not otherwise occur with Forms created on-line. The proposed electronic submission will eliminate form and signature errors. On-line submissions will include a mandatory checklist for all required audit components. This is expected to make a marked reduction in the nearly 11,000 submissions received each year missing audit components or data collection forms.

Comments: One commenter requested more clarification regarding the electronic submission process.

Response: Agreed. More details are added in the Form's instructions. OMB and the FAC are pursuing the best practices for implementing the technological changes and will implement improvements as needed. The FAC will use the mandatory e-mail address from the auditee and the auditor responsible for signing and certifying the Form SF-SAC as part of a form certification process. These e-mails will not be posted on the Web site unless they are also entered in the Part I, Item 6(f) and 7(f) of the form. When an auditee or auditor is ready to sign their on-line Form SF-SAC, they will initiate the certification process. Once the certification process has been initiated, the FAC Internet Data Entry System (IDES) will send an email to the auditee's and auditor's certifying officials. Each certifying official will be given a unique number in the e-mail to serve as a signature code. Instead of signing the form SF-SAC, the certifying officials will enter their unique signature code instead of a signature.

Size of PDF Files and Links to Audits

Comments: In order to minimize the size of the attachments, one commenter offered an alternative proposal to allow for the submission of Web site location(s) of the required audit reports to the Federal Audit Clearinghouse. The Federal Audit Clearinghouse processors would click the link and save the required files to their network.

Response: The FAC estimates an average file size of 1.65 MB for an OMB Circular A-133 reporting package. Based on this average file size, the FAC does not believe a large amount of time will be needed to upload a reporting package to the FAC Internet Data Entry System. The size of PDF files is not an issue due to the significant advances in electronic file storage capacity and costs.

The on-line electronic submission process requires the auditee to submit the reporting package in a consistent format over a secure server. Currently, the audits available on Web sites do not offer the required electronic file consistency or security needed for processing thousands of submissions. Most audits on Web sites do not include all of the required audit components in a single document as required.

Form SF-SAC and Instructions

Comments: Several commenters offered suggestions to improve formatting and wording of the Form SF-SC and Instructions.

Response: Agreed. Most formatting suggestions were accepted and the problems were fixed. A few other suggestions were not needed, or were not feasible.

Comments: One commenter recommended adding instructions to the Data Collection Form (DCF) that outline the procedures for unlocking, revising and re-submitting a revised DCF.

Response: Agreed. The FAC enhanced the written instructions to include instructions for on-line submissions and revisions. Detailed instructions will be available on the Web site.

Comments: One commenter noted confusion regarding the previously proposed Form SF-SAC Instructions regarding including the HUD project number with the auditee name.

Response: The HUD number is not a requirement, but may be included to supplement the project name in the Auditee name field. The Form SF-SAC instructions were revised to make this distinction clearer.

Comments: There are instances where multiple auditors are engaged to conduct an audit, OMB should add continuation sheet similar to the Part I, Item 5 sheet to provide the ability to capture additional auditor information.

Response: Agreed. OMB changed the proposed 2008 Form SF-SAC to allow for the inclusion of additional auditors contact information. One primary auditor is still required. The additional auditors will be considered secondary auditors for the purposes of the Single Audit.

Comments: One commenter expressed concern about how indirect awards are required to be reported in the Federal Awards Expended During Fiscal Year table. The commenter recommends that OMB clarify whether the reporting for indirect awards must be at the same level of detail as the Scheduled of Expenditures of Federal Awards (SEFA). If so, the OMB should consider how and whether this information is being used in practice and whether it should continue to be required in such detail.

Response: No change. In order to manage the Federal programs, Federal Agencies continue to need the list of CFDAs on the Form SF-SAC in the same detail as shown on the SEFAS. The Federal agencies need to see the sources of separate programs even if they have the same CFDA number.

Comments: In regards to Part III, Item 9 column (d)—Name of Federal Program, one commenter suggested clarification if column 9d of Part III needs to include pass through entity name and pass-through award number, particularly for the R&D Cluster. That information is required on the Schedule of Expenditures of Federal Awards and can be looked up by any federal agency for which there is a finding listed for a pass-through award. Practice varies and enforcement by agencies is inconsistent.

Response: Agreed. The Form instructions are revised to read that the pass-through entity name is not required.

Comments: In regards to Part III, Item 9 column (e), one commenter suggested clarifying the instructions in relation to loan programs not receiving any new federal dollars, particularly Perkins, but are continuing to lend money from funds generated from repayments. The current instructions are not clear on how to report under these circumstances.

Response: Agreed. The Form SF-SAC Instructions are revised to refer the question of Federal loans or loan guarantees as expenditures to the OMB Circular A-133 Compliance Supplement or the Federal oversight (or cognizant) agency for determination.

Comments: One commenter suggested improving the Form SF-SAC Instructions by referencing the June 26, 2007, Federal Register notice that changed the number of copies of the reporting package to submit to the FAC (from several to one).

Response: Electronic submissions make the number of copies of the reporting package unnecessary (i.e., submission of hard copy of the reporting package is no longer needed). The reference was removed from instructions.

Comments: One commenter suggest considering if the addition of the additional data elements such as “Total Revenue” would be useful.

Response: This data element is a major change/addition to the proposed form. Adding new Form elements such as “Total Revenue” as well as others will be considered further for possible inclusion into future versions of the Form SF-SAC.

Danny Werfel,

Deputy Controller.