| (a) For this section, the word Subrecipient also includes
Multifamily Development Owners who have applied for or received Direct
Loan Funds, grants or 811 PRA funds from the Department who are or
have an Affiliate that is required to submit a Single Audit, i.e.
units of government, nonprofit organizations.
(b) Procurement of a Single Auditor. A Subrecipient
or Affiliate must procure their single auditor in the following manner
unless subject to a different requirement in the Local Government
Code:
(1) Competitive Proposal procedures whereby competitors'
qualifications are evaluated and a contract awarded to the most qualified
competitor. Proposals should be advertised broadly, which may include
going outside the entity's service area, and solicited from an adequate
number (usually two or more) of qualified sources. Procurements must
be conducted in a manner that prohibits the use of in-state or local
geographical preferences in the evaluation of bids or proposals;
(2) A Subrecipient may not use the sealed bid method
for procurement of the Single Auditor. There is no requirement that
the selected audit firm be geographically located near the Subrecipient.
If a Subrecipient does not receive proposals from firms with appropriate
experience or responses with a price that is not reasonable compared
to the cost price analysis, the submissions must be rejected and procurement
must be re-performed.
(c) A Subrecipient or Affiliate must confirm that it
is contracting with an audit firm that is properly licensed to perform
the Single Audit and is not on a limited scope status or under any
other sanction, reprimand or violation with the Texas State Board
of Public Accountancy. The Subrecipient must ensure that the Single
Audit is performed in accordance with the limitations on the auditor's
license.
(d) A Subrecipient is required to submit a Single Audit
Certification form within two (2) months after the end of its fiscal
year indicating the amount they expended in Federal and State funds
during the fiscal year and the outstanding balance of any loans made
with federal funds if there are continuing compliance requirements
other than repayment of the loan.
(e) Subrecipients that expend $1,000,000 or more (or
in the case of entities subject to TXGMS or UGMS of $750,000 or more)
in federal and/or state awards or have an outstanding loan balance
associated with a federal or state resource of $1,000,000 or more
(or in the case of entities subject to TXMGS or UGMS of $750,000 or
more) with continuing compliance requirements, or a combination thereof
must have a Single Audit or program-specific audit conducted. If the
Subrecipient's Single Audit is required by 2 CFR 200, subpart F, the
report must be submitted to the Federal Audit Clearinghouse the earlier
of 30 calendar days after receipt of the auditor's report or nine
(9) months after the end of its respective fiscal year. If a Single
Audit is required but not under 2 CFR Part 200, subpart F, the report
must be submitted to the Department the earlier of 30 calendar days
after receipt of the auditor's report or nine months after the end
of its respective fiscal year. If the deadline is on a Saturday, Sunday,
federal holiday (for a Single Audit required to be submitted to the
Federal Audit Clearinghouse), or a state holiday (for a Single Audit
required to be submitted to the Department), the deadline is the next
business day.
(f) Subrecipients are required to submit a notification
to the Department within five business days of submission to the Federal
Audit Clearinghouse. Along with the notice, the Subrecipient must
indicate if the auditor issued a management letter. If a management
letter was issued by the auditor, a copy must be sent to the Department.
(g) The Department will review the Single Audit and
issue a management decision letter for audit findings pertaining to
the Federal award provided to the Subrecipient from the Department.
If the Single Audit results in disallowed costs, those amounts must
be repaid or an acceptable repayment plan must be entered into with
the Department in accordance with 10 TAC §1.21, Action by Department
if Outstanding Balances Exist.
(h) In evaluating a Single Audit, the Department will
consider both audit findings and management responses in its review.
The Department will notify Subrecipients and Affiliates (if applicable)
of any Deficiencies or Findings from within the Single Audit for which
the Department requires additional information or clarification and
will provide a deadline by which that resolution must occur.
(i) All findings identified in the most recent Single
Audit will be reported to the Executive Director during the Previous
Participation review process described in Subchapter C of this Chapter.
The Subrecipient may submit written comments for consideration within
five business days of the Department's management decision letter.
(j) If the Subrecipient disagrees with the auditors
finding(s), and the issue is related to administration of one of the
Department's programs, an appeal process is available to provide an
opportunity for the auditee to explain its disagreement to the Department.
This is not an appeal of audit findings themselves. The Subrecipient
may submit a letter of appeal and documentation to support the appeal.
The Department will take the documentation and written appeal into
consideration prior to issuing a management decision letter. If the
Subrecipient does not disagree with the auditor's finding, no appeal
to the Department is available.
(k) In accordance with 2 CFR Part 200 and the State
of Texas Single Audit Circular §225, with the exception of nondiscretionary
CSBG funds except as otherwise required by federal laws or regulations,
the Department may suspend and cease payments under all active Contracts,
or refrain from executing a new Contract for any Board awarded contracts,
until the Single Audit is received. In addition, the Department may
elect not to renew an entity in accordance with §1.411 of this
Chapter (relating to Administration of Block Grants under Chapter
2105 of the Tex. Gov't Code), or not amend or enter into a new Contract
with a Subrecipient until receipt of the required Single Audit Certification
form or the submission requirements detailed in subsection (e) of
this section.
(l) In accordance with Subchapter C of this Chapter
(relating to Previous Participation Reviews), if a Subrecipient applies
for funding or an award from the Department, findings noted in the
Single Audit and the failure to timely submit a Single Audit Certification
Form or Single Audit will be reported to the Executive Director.
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