Molly -

The audit engagement is the responsibility of management, normally with the
approval of either/or the Finance/Audit Committee of the Board.  I am not
aware of any federal agency requiring audit engagement approval prior to the
start of audit fieldwork.

John D. Pepe
Controller
Stroud Water Research Center
970 Spencer Road
Avondale, PA 19311-9514

VOICE: (610) 268-2153, ext. 253 FAX: (610) 268-0490 E-MAIL:
xxxxxx@stroudcenter.org
Please visit us on the Web: www.stroudcenter.org

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@hrinet.org]On Behalf Of
xxxxxx@SBLHS.ORG
Sent: Tuesday, October 23, 2001 5:30 PM
To: xxxxxx@HRINET.ORG
Subject: [RESADM-L] A-133 audit engagements

Hi, all --

Our organization recently crossed the magical threshold of $300,000 federal
funds expended in a fiscal year and are therefore taking steps to comply
with audit requirements in OMB A-133.

One of the agencies which provides federal support to our organization just
sent a letter asking us if we really did mean to say "yes" on a form
returned to them which asked if federal expenditures "during fiscal year
2002" are projected to total $300,000 or more. (We were required to return
this form to them by Oct. 16, 2001.)

Their letter points out that if we do indeed expend more than $300k in
federal funds that we are required to conduct an audit in compliance with
A-133 (no suprise) AND that the funding agency "must approve your audit
engagement agreement prior to the start of audit fieldwork."

Is this unusual? I do not see language anywhere in our grant agreement with
this agency nor in their policies and procedures manual which stipulates
that we must obtain approval for the agreement with an audit firm, and it
strikes me as intrusive, particularly when the total amount of funds from
this agency are a relatively small fraction of our federal annual total.

Do agencies typically expect to approve audit agreements of organizations
complying with A-133?

P.S. our organization actually exceeded the threshold in FY 2001 and has
already contracted with an audit firm to complete an A-133 audit for that
period.

-----------------
Molly Daniel
Grants Specialist
Planning Dept.
Sarah Bush Lincoln Health Center
1000 Health Center Drive
Mattoon, IL 61938-0372
tel. 217-258-2195
fax 217-258-4135
email: xxxxxx@sblhs.org <mailto:xxxxxx@sblhs.org>
web: www.sarahbush.org <http://www.sarahbush.org>

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