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Figure 7 State DOTs reporting that they provide payment for subrecipients' financial audits. Roles of State DOTs in Subrecipient DOTs reported not having specific deadlines or time Financial Audits frames. Information about deadlines supplied by re- When asked what other role(s) they assumed spondents can be summarized as follows: in subrecipient financial audits, transit staff from · State DOTs that require submission within responding state DOTs described roles that could 9 months of the end of the subrecipient's fis- be grouped into the following three categories: cal year, consistent with OMB Circular A-133 1.State DOTs that perform a limited review of requirements (34 percent); subrecipient financial audits (45 percent) · State DOTs that have other deadlines, rang- 2.State DOTs that rely on other departments ing from within 6 months from the end of the within the agency to perform this function subrecipient's fiscal year to a specific date, (10 percent) such as June 30th (30 percent); and 3.State DOTs that conduct a detailed review · State DOTs that require submission within and assessment of the financial audits of sub- 30 days of the receipt of the audit report by recipients, or that conduct the financial audits the subrecipient (26 percent). of subrecipients (20 percent) Two-thirds of the respondents indicated that their states imposed consequences for late submission Financial Audit Reporting Submission of financial audits (Figure 9). These consequences Deadlines and Consequences generally consisted of some type of delay, withhold- ing, or detaining of current funding or jeopardized Of the 37 state DOTs that responded to this future funding. Examples of consequences listed by question, 80 percent indicated that they require all respondents included the following: subrecipients to submit the complete audit reports to the state. Twenty percent do not require submis- · A subrecipient may be placed in lower cate sion. Of those states that do not require all subrecip- gory to receive funding. ients to submit a completed audit report, the com- · A subrecipient may be removed from the mon threshold is the federal (OMB Circular A-133) "good standing" list, with the result being requirement. withholding of future funding or removal Submission deadlines are critical elements of from eligibility to receive future funds. audit procedures (see Figure 8). Some audit reports · A subrecipient's contract may be suspended. are submitted during the grant application process. · Payments for the current project may be Time frames vary for deadlines, but only two state suspended. 8
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Figure 8 Submission deadlines for annual (OMB Circular A-133 or other) financial audits. Figure 9 State DOTs reporting consequences for late submission of subrecipients' financial audits. 9