Chapter 7 – Single Audit Policy and Procedures

9-7.1  INTRODUCTION

1. Purpose.  The purpose of this policy is to describe the Indian Health Service (IHS) roles and responsibilities for implementation of Single Audit requirements of Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Health and Human Services Awards, 45 Code of Federal Regulations (C.F.R.) Part 75, Subpart F.
2. Background.  Department of Health and Human Services (HHS) non-federal financial assistance entities that expend $750,000 or more of federal assistance during the entity’s fiscal year are required to have a single or program-specific audit conducted each year in accordance with 45 C.F.R. §§ 75.501 through 75.521. The Progress Act (Pub. L. 166-180) amends this amount to $500,000, effective December 21, 2021, and supersedes any conflicting Department regulations. The regulations at 45 C.F.R. Part 75 are HHS’s adoption of the Office of Management and Budget’s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements, located at 2 C.F.R. Part 200. The Single Audit’s purpose is for an independent auditor to review and test the financial records and financial position of the entity, to express an opinion on the conformity with Generally Accepted Accounting Principles, to test and report on the adequacy and effectiveness of internal controls, and to ensure that the entity complies with federal statutes, regulations, and terms and conditions of federal awards. Single Audits must be conducted in accordance with Generally Accepted Government Audit Standards, provide assurance that recipients of IHS funding have adequate internal controls in place, and are generally in compliance with federal award requirements.
   
   Non-federal entities are required to submit Single Audits on the earlier of 30 days after receipt of the auditor’s report or nine months after the non-federal entity’s fiscal year end. 45 C.F.R. § 75.512. Pursuant to 45 C.F.R. § 75.521(d), a management decision letter (MDL) must be issued within six months (180 days) of the MDL start date as determined by the Federal Audit Clearinghouse (FAC). The auditee must initiate and proceed with corrective actions immediately upon receipt of the audit report. The MDL must clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay disallowed costs, make financial adjustments, or take other action. Federal agencies are required to provide audit follow-up to ensure that corrective actions are implemented. Further, 25 U.S.C. §5325(f) requires that Single Audits of Indian Self-Determination and Education Assistance Act (ISDEAA) Title I contractors and Title V compactors be reviewed for compliance with federal requirements within 60 days of receipt of the audit by the HHS Secretary. If within 60 days after receiving the Single Audit report the Secretary does not provide notice to reject the Single Audit report due to non-compliance with applicable law, the audit is deemed accepted. Id. In addition, the Secretary must disallow any costs identified in the audit within 365 days of receipt of the audit by the HHS Secretary. Id.
3. Authority.   All policies concerning the review of Single Audits are in accordance with laws, regulations, and other available guidance, to include:
   1. Single Audit Act of 1984, Pub. Law 98-502
   2. Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, 45 Code of Federal Regulations (CFR) § 75, Subpart F
   3. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards [Title 2, CFR, Chapter II, Part 200 (2 CFR § 200)] Subpart F – Audit Requirements
   4. Indian Self-Determination and Education Assistance Act of 1975, Public Law 93-638, as amended, and its implementing regulations at 25 CFR § 900, Subpart F
   5. Pub .L. 106-260 Tribal Self-Governance Amendments of 2000 and its implementing regulations at 42 CFR Part 137
   6. Indian Health Care Improvement Act, Pub. L. 94-437, 25 U.S.C Chapter 18
   7. Internal Agency Procedures Handbook for Non-Construction Contracting Under Title I of the Indian Self-Determination Assistance and Education Act https://www.ihs.gov/sites/ihm/themes/responsive2017/display_objects/documents/pc/IAP_Handbook_Under_Title%20I_ISDEAA.pdf
   8. Council of Inspectors General on Integrity & Efficiency (CIGIE) Guide for Desk Reviews of Single Audit Reports, 2016 Edition https://www.ignet.gov/sites/default/files/files/Desk%20Review%20guide%20for%20Single%20Audits%20-%20final%20(Dec%202016).pdf
   9. The Progress Act, Pub. L. 166-180
4. Scope.  This policy will encompass IHS roles and responsibilities for compliance with Single Audits submitted to HHS through the FAC. This policy applies to IHS Headquarters and Area Office officials responsible for agency compliance with Single Audits as detailed in the Authorities section above.
5. Policy.  The policy of IHS is to ensure that Single Audit reports are received no later than nine months after the non-federal entity’s fiscal year end, evaluated for risks to federal funds provided by IHS, and reviewed for compliance with federal laws, regulations, and requirements. In addition, IHS will issue MDLs in accordance with federal requirements, and follow-up on Single Audit findings to ensure corrective action plans are implemented and identified high risks are mitigated. Also, IHS will ensure that federal funds provided by IHS are properly safeguarded and used only for the purposes authorized in the award.

9-7.2  RESPONSIBILITIES

This section outlines the roles and responsibilities of IHS Headquarters (HQ) and Area Office staff responsible for Single Audit requirements.

1. Deputy Director for Management Operations.  The Deputy Director for Management Operations (DDMO) provides general oversight of the IHS Single Audit processes and provides updates to IHS Senior Leadership as required. Consistent with IHS Delegation of Authority, No. 44, the DDMO delegates the authority to sign MDLs as follows to the:
   1. Chief Financial Officer (CFO), Director, Office of Finance and Accounting (OFA), or designee, to sign MDLs stating whether or not the Single Audit finding is sustained, provide a reason for the determination and discuss corrective action plans and/or issue cost disallowances (including those with grants) for Title V compactors, Title I contractors, Urban Indian Health Program (UIHP) contractors, and Grants only recipients.
   2. CFO, Director, OFA, or designee, to sign MDLs for repayment of disallowed costs, make financial adjustments, or take other action. Exercise of this delegated authority requires obtaining written concurrence from one of the following appropriate program official(s), including the Director, Office of Tribal Self-Governance (OTSG); Director, Office of Direct Service and Contracting Tribes (ODSCT); Director, Office of Management Services (OMS); and Area Directors, as required.
   3. CFO, Director, OFA, or designee, to sign MDLs that involve non-questioned costs, the authority to discuss corrective action plans, and to require an updated corrective action plan, if deemed necessary.
2. Chief Financial Officer, Director, Office of Finance and Accounting .  
   1. Provides resources and ensures accountability for the conduct of Single Audit responsibilities within the OFA as provided for by the ISDEAA and federal regulations.
   2. Completes the Single Audit Review Guide (SARG) to assess compliance with federal regulations and to identify high risks to IHS funding and compliance with laws and regulations.
   3. Coordinates the SARG results and provides technical assistance to Area Offices for audit follow-up.
   4. Prepares monthly reporting for delinquent Single Audits, Single Audit tracking system, and database management.
   5. Prepares MDLs and archival of agency compliance.
   6. Tracks IHS follow-up on Single Audit findings and identified high risks, the effectiveness of Single Audits to recipient accountability, and IHS awarding decisions.
   7. Signs MDLs for decisions involving Single Audit findings (including those with Grants) for Title V compacts, Title I contracts, UIHP contracts, and Grants only awards.
   8. Signs MDLs regarding repayment of disallowed costs or to make financial adjustments after obtaining concurrence from the Director, OTSG; Director, ODSCT; Director, OMS (for Grants only awards), and Area Directors, as required.
3. Deputy Director, Office of Finance and Accounting.  
   1. In the absence of the CFO or as a designee, signs MDLs (including those with Grants) for Title V compacts, Title I contracts, UIHP contracts, and Grants only awards for non-questioned costs.
   2. Discusses corrective action plans and requires revised corrective action plans with Title V compactors, Title I contractors, UIHP contractors, and Grants only recipients, if deemed necessary.
4. Director, Division of Audit, Office of Finance and Accounting.  
   1. Ensures that Single Audits are properly assigned to audit staff, SARG reviews are conducted, MDLs are completed, and timely reporting across IHS HQs and Area Offices.
   2. Receives and tracks Single Audit reports from the FAC and maintains an archival system.
   3. Utilizes the Audit Tracking and Analysis System (ATAS) to assign Single Audit findings and report MDL issuance.
   4. Reviews Single Audit reports for compliance with federal requirements within 60 days of receipt by the HHS Secretary, assesses risks to IHS funding and compliance with laws and regulations, and summarizes the results by completing the IHS SARG checklist.
   5. Provides notification to the Area Office, HQ officials, and HHS Office of Inspector General (OIG) when the Single Audit is not compliant with federal requirements.
   6. Provides results of the SARG reviews to the appropriate Area Office and HQ officials for follow-up.
   7. Prepares MDLs for Single Audits containing findings using responsive corrective action plans and the results from the SARG review within 180 days of the FAC MDL start date.
   8. Requests and assesses Tribal, financial, and other supporting documentation to resolve questioned costs prior to the 365-day period.
   9. Prepares cost disallowance letters and coordinates concurrence from CFO/OFA Director, OTSG, ODSCT, OMS, and Area Director prior to the 365-day period for Title V compactors and Title I contractors, and as recommended for UIHP and Grants only, respectively.
   10. Keeps the Office of the General Counsel (OGC) informed of cost disallowances.
   11. Reports the status of delinquent Single Audits and questioned costs to HHS as required.
   12. Coordinates cost disallowance accounts receivables with HHS Program Support Center (PSC) Financial Management.
   13. Tracks all Single Audit findings and identified high risks for follow-up.
   14. Provides monthly reports on the status of MDLs, delinquent Single Audits, etc. to Area Offices and HQ officials.
   15. Maintains database that tracks Single Audit activities within IHS to facilitate resolution of audit findings and identified high risks.
   16. Maintains an archive of all completed SARG review results, Single Audits, MDLs, and other pertinent information.
   17. Provides Single Audit training to HQ and Area Office officials as required.
   18. Provides technical assistance to HQ and Area Office staff for Single Audit requirements and provides status reports, including monthly reports, to designated IHS officials, including Area Offices and Senior Leadership.
   19. Serves as the liaison office between IHS and HHS Audit Resolution Division (ARD) and the HHS OIG.
   20. Works with HHS Single Audit Review Workgroup (SARW) and government-wide groups to develop and implement improvements and solutions for Single Audit.
5. Director, Office of Management Services.  
   1. Oversees single audit implementation and ensures statutory and regulatory compliance for Grants only recipients.
   2. Provides concurrence for proposed cost disallowances prepared by OFA, Division of Audit (DA).
6. Director, Division of Grants Management, Office of Management Services.  
   1. Follows up with Grants only recipients when Single Audits are delinquent.
   2. Follows up with Grants only recipients on the status of implementation of corrective action plans.
   3. Coordinates with OFA/DA on the status of all Single Audit follow-up activities for Grants only recipients to follow-up on Single Audit findings and identified high risks to ensure corrective actions are implemented.
   4. Receives requests for technical assistance from Grants only recipients, contacts the OFA/DA for resolution as needed, and provides response to recipient.
   5. Submits concurrence for proposed cost disallowances prepared by OFA/DA to OMS for signature.
7. Director, Office of Tribal Self-Governance.  
   1. Oversees the implementation of Tribal self-governance legislation and authorities in the IHS.
   2. Works directly with Tribes on ISDEAA Title V compacts and funding agreements.
   3. Provides Agency leadership information concerning policy development and Agency functions and responsibilities associated with self-governance compacts and funding agreements; monitors Agency compliance with self-governance policies, administrative procedures and guidelines; and advises the Director, IHS, and senior management on activities and issues related to self-governance compacts and funding agreements.
   4. Follows-up with Title V compactors when Single Audits are delinquent.
   5. Follows-up on Single Audit findings and identified high risks with Title V compactors to ensure implementation of corrective actions.
   6. Coordinates with OFA/DA on the status of all Single Audit follow-up activities for Title V compactors.
   7. Receives requests for technical assistance from Title V compactors, coordinates with the OFA/DA for resolution, as needed, and provides response to recipient.
   8. Provides concurrence for proposed cost disallowances prepared by OFA/DA and advises Area staff on Single Audit review and follow-up.
   9. Provides input to OFA/DA for HHS reporting on delinquent Single Audit, questioned cost reporting, etc.
   10. Provides technical assistance to Area Office officials on the provisions of the ISDEAA.
8. Director, Office of Direct Service and Contracting Tribes.  
   1. Provides guidance on ISDEAA Title I contracts to HQ and Area Offices.
   2. Provides Agency leadership information concerning policy development and Agency functions and responsibilities associated with self-determination contracting, monitors Agency compliance with self-determination policies, administrative procedures and guidelines, and advises the Director, IHS, and senior management on activities and issues related to self-determination contracting.
   3. Provides concurrence to OFA/DA for proposed cost disallowances and advises area staff on Single Audit follow-up.
   4. Provides technical assistance to Area Office officials on the provisions of the ISDEAA.
   5. Participates in Single Audit activities that ensure that Single Audits are received timely and corrective actions implemented for Single Audit findings and identified high risks.
9. Area Directors.  
   1. Informs tribes about the ISDEAA and UIHP contracting processes and oversees programmatic and financial aspects of the contracts.
   2. Provides resources and ensures accountability within the Area Office for the receipt of Single Audits and implementation of corrective actions to resolve Single Audit findings (including those with Grants) and identified high risks for Title I and UIHP contracts.
   3. Delegates area staff to perform Single Audit resolution follow-up for Title I and UIHP contracts and provides notification to OFA/DA.
   4. Develops Area Office procedures for timely Single Audit report receipt and follows-up on Single Audit findings and identified high risks to ensure corrective actions are implemented for Title I and UIHP contracts.
   5. Ensures that requests for technical assistance are forwarded to OTSG for Title V and/or OFA/DA for Title I and UIHP contracts, as required.
   6. Ensures that requests and responses for cost disallowances, questioned costs, and delinquent audits are provided to OFA/DA.
   7. Coordinates with OFA/DA on the status and tracking of all Single Audit follow-up activities for Title I and UIHP contracts to ensure Single Audits are received timely and follow-up on Single Audit findings and identified high risks to ensure corrective actions are implemented.
10. Executive Officers.  
    1. Follows up to ensure that all Single Audits are received and Single Audit findings and identified high risks are resolved through corrective action implementation (including those with grants) for Title I and UIHP contracts.
    2. Updates Area Director and Area Office staff on Single Audit activities.
    3. Updates the DDMO, ODSCT, and CFO/OFA Director regarding Title I and UIHP contracts that are not in compliance with agreements/awards, responds to questioned costs requests, and provides updates on the status of Single Audit findings and identified high risks.
    4. Collaborates with OTSG and OFA/DA to follow-up on delinquent Single Audits and implementation of corrective actions for Title V compactors.
    5. Coordinates with OFA/DA on the status of all Single Audit follow-up activities for Title I and UIHP contracts to ensure Single Audit reports are received timely and corrective actions are implemented for Single Audit findings and identified high risks.
11. IHS Tribal and Urban Program Staff, Agency Lead Negotiators Or Other Assigned Area Office Staff .  
    1. Ensures Single Audits are received timely and corrective actions are implemented for Single Audit findings and identified high risks (including those with grants) for Title I and UIHP contracts.
    2. Coordinates with OFA/DA on the status and tracking of all Single Audit follow-up activities for Title I and UIHP contracts to ensure Single Audit reports are received timely and corrective actions are implemented for Single Audit findings and identified high risks.
    3. Receives requests for technical assistance from Title I and UIHP contracts and contacts the OFA/DA for resolution and responds to the recipient, as required.
    4. Receives and coordinates requests for technical assistance from Title V recipients with OTSG for resolution, as required.
    5. Collaborates with OTSG and OFA/DA on the status of delinquent Single Audits and the implementation of corrective action plans for Title V recipients.
    6. Implements sanctions in accordance with federal requirements in consultation with OGC attorneys, OTSG, and ODSCT for failure to comply with federal statutes, regulations, or the terms and conditions of a federal award, including delinquent Single Audit reports. Sanctions could include payments made on a reimbursement basis or temporarily withholding cash payments, pending correction of a deficiency; disallowance of costs; suspension or termination of the award; or other remedies that protect federal funds.
    7. Provides responses to OFA/DA on proposed cost disallowances for Title I and UIHP contracts.
    8. Provides input to OFA/DA on HHS reporting on delinquent Single Audits, questioned costs, etc.
    9. Follows up on Single Audit findings and identified high risks to IHS funding and programs identified by OFA/DA SARG summary results.
    10. Collaborates to share good federal stewardship practices amongst Area Offices and HQ in mitigating and preventing fraud or misuse of IHS funds provided to recipients.

9-7.3  PROCEDURES

The following outlines a list of general procedure requirements consistent with the roles and responsibilities in the implementation of Single Audit Requirements:

1. Single Audit reports that contain IHS funding expenditures must be downloaded from the FAC for review and Single Audit follow-up process.
2. Single Audit reports must be tracked by fiscal year, IHS recipient, FAC receipt date, MDL start date, the date the report is downloaded from the FAC, and SARG review completion date.
3. Single Audit reports must be reviewed within 60 days of the date the report is downloaded from the FAC using the SARG checklist to ensure Single Audits meet federal requirements and to identify high risks to IHS funding and programs.
4. OFA/DA must notify the Area Office, HQ officials, and the HHS OIG when the Single Audit is not compliant with federal requirements.
5. Quality Assurance must be provided over SARG reviews and MDL packages.
6. Using SARG review results, Area Office and/or OTSG must follow-up with the Title I, Title V, and UIHP funding recipients to ensure that Single Audit findings and identified high risks are resolved. OMS must follow-up with Grants Only recipients.
7. Single Audit follow-up activities and resolution for Title I, Title V, UIHP, and Grants Only recipients must be documented and provided to OFA/DA to facilitate agency tracking of Single Audit findings and identified high risks.
8. MDL packages must be prepared based on HHS assignment of findings in the ATAS. MDL packages must include the draft MDL, Data Collection Form, Single Audit report, and the HHS initial notification letter to recipients. Signed MDLs must be sent to recipients with copy to the Area Office and OTSG, as required.
9. HHS systems must be updated with accurate information pertaining to MDLs, delinquent audits, questioned costs, and Single Audit follow-up.
10. Monthly reports on MDL backlogs and delinquent Single Audits will be prepared using data from ATAS and FAC and used for follow-up purposes.
11. Copies of Single Audit documents will be maintained by OFA/DA for future reference.