[Federal Register Volume 78, Number 223 (Tuesday, November 19, 2013)]
[Notices]
[Pages 69451-69454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-27585]


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OFFICE OF MANAGEMENT AND BUDGET


Information Collection; Request for Public Comments

AGENCY: Office of Management and Budget, Executive Office of the 
President.

ACTION: Notice and request for comments.

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SUMMARY: In compliance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3501, et seq.) the Office of Management and Budget (OMB) invites 
the general public and Federal agencies to comment on a revision of an 
approved information form (SF-SAC) that is used to report audit 
results, audit findings, and questioned costs as 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.''
    The first notice of this information collection request, as 
required by the Paperwork Reduction act, was published in the Federal 
Register on May 9, 2013 [78 FR 27259]. The proposed changes are to 
revise some existing data elements in the form and add other data 
elements that would make easier for the Federal agencies to identify 
the types of audit findings reported in the audits performed under the 
Single Audit Act. The current Form SF-SAC was designed for audit 
periods ending in 2011and 2012. The proposed revised Form SF-SAC will 
replace the current form for audit periods ending 2013, 2014 and 2015. 
The detail proposed changes along with the proposed format are 
described on OMB Web site at: http://www.whitehouse.gov/omb/grants_forms/

DATES: Submit comments on or before December 19, 2013. 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 mailed comments will be received before the comment 
closing date.
    Electronic mail comments may be submitted to: Gilbert Tran at [email protected]. Please include ``Form SF-SAC 2013 Comments'' in 
the subject line and the full body of your comments in the text of the 
electronic message, not as an attachment. Please include your name, 
title, organization, postal address, telephone number and email address 
in the text of the message. Comments may also be submitted via 
facsimile to 202-395-3952.
    Comments may be mailed to Gilbert Tran, Office of Federal Financial 
Management, Office of Management and Budget, Room 6025, New Executive 
Office Building, Washington, DC 20503.
    All responses will be summarized and included in the request for 
OMB approval. All comments will also be a matter of public record.

FOR FURTHER INFORMATION CONTACT: Gilbert Tran, Office of Federal 
Financial Management, Office of Management and Budget, (202) 395-3052. 
The proposed revisions to the Information Collection Form, Form SF-SAC 
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_forms/

SUPPLEMENTARY INFORMATION: 
    OMB Control No.: 0348-0057.
    Title: Data Collection Form.
    Form No: SF-SAC.
    Type of Review: Revision of a currently approved collection.
    Respondents: States, local governments, non-profit organizations 
(Non-Federal entities) and their auditors.
    Estimated Number of Respondents: 86,000 (43,000 from auditors and 
43,000 from auditees). The respondents' information is collected by the 
Federal Audit Clearinghouse (maintained by the U.S. Bureau of the 
Census).
    Estimated Time per Respondent: 59 hours for each of 400 large 
respondents and 17 hours for each of 85,600 small respondents for 
estimated annual burden hours of 1,478,800.
    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. Bureau of 
the Census) uses the information on the SF-SAC to ensure proper 
distribution of audit reports to Federal agencies and 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 Government Accountability Office, OMB 
and the general public for management of and information about Federal 
awards and the results of audits. Comments are invited on: (a) Whether 
the proposed information collection is necessary for the proper 
performance of the functions of the agency, including whether the 
information shall have practical utility; (b) the accuracy of the 
estimate of the burden of the collection of the information; (c) ways 
to enhance the quality, utility, and clarity of the information to be 
collected; and (d) ways to minimize the burden of the collection of 
information on those who respond, including through the use of 
automated collection techniques or other forms of information 
technology.

A. Public Comments and Responses

    Pursuant to the May 9, 2013, Federal Register notice, OMB received 
comments from 9 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), Federal agencies and 
a grantee. The comments received relating to the information collection 
and OMB's responses are summarized below.

[[Page 69452]]

    Comment: Part I, Item 6 Primary Auditor Information. One commenter 
suggested an auto-fill feature for Part I, Line 6 (auditor information) 
to ease administrative burden.
    Response: No Change to Form. Auditors should enter data each audit 
year to prevent inclusion of outdated contact information.
    Comment: Part I: General Information, Item 6(b)--Audit Firm/
Organization EIN. Auditors are required to report their EINs. 
Commenters support this proposal and suggest that auditor EINs may be 
the same as auditee EINs in some cases such as statewide audits.
    Response: Change made to system edits and Form instructions. The 
form will allow auditor EINs to match auditee EINs. Additionally, the 
Federal Audit Clearinghouse (FAC) will provide guidance in the 
instructions warning against using Social Security Numbers as EINs when 
the auditor is a sole proprietor. FAC will provide the link to IRS.gov 
used to obtain EINs.
    Comment: Part I, Item 6(b) Some commenters suggested that auditors 
report DUNS numbers on the Form in addition to their EINs.
    Response: No Change to Form. OMB will consider this on a future 
version of the Form.
    Comment: Part I, Item 7, Secondary Auditor information. Some 
commenters noted the Form does not indicate whether Secondary Auditor 
information is required or optional. They suggested that this 
information be required on the Form.
    Response: Change to Form and Instructions. OMB revised the Form's 
current question and instructions to clarify that secondary auditor 
information is required.
    Comments: Part II: Financial Statements--Commenters suggested 
deletion of Part II Items Questions 3,4 and 5 relating to Financial 
Statements relating to a significant deficiency, a material weakness 
and material noncompliance on a major program as these information are 
added to the new Part III of the Form.
    Response: No change to Form. Part II, Questions 3, 4, and 5 will 
remain on the form, as they are not duplicated elsewhere on the Form. 
However, Part III, Questions 4, 5 and 6 of the 2010 form will be 
removed as proposed.
    Comment: Part III: Federal Programs, Item 2, Dollar threshold to 
distinguish between Type A and Type B programs. Commenters suggested a 
development of a calculation to validate the dollar amount entered for 
Part III, Item 2--the dollar threshold to distinguish Type A and Type B 
programs.
    Response: No Change to Form. The Form edits cannot be programmed to 
accurately determine the threshold in every case, especially where loan 
or loan guarantees exist. In addition, auditors are required to 
determine the threshold at the start of the audit, not when the audit 
is completed and this Form is filled out. However, OMB will continue 
consideration of development of a threshold validation.
    Comment: Part III: Federal Programs, Item 5, Federal agencies with 
prior year or current year direct findings. Commenters suggested 
because the addition of information, Item 5 should be limited to prior 
year findings only.
    Comment: Other commenters suggested that the Form be amended to 
clarify if agencies are receiving the report based on current findings, 
prior findings, or both current and prior findings.
    Response: No change to Form. The question in Item 5 is to determine 
which agencies should review the audit. Non-conformity of CFDA numbers 
reported on the Form requires the question to remain on the Form. On 
the next version of the Form, OMB will consider adding a separate 
question to distinguish if prior year, current year or both prior and 
current year findings necessitate a review.
    Comment: Part III: Federal Programs, Item 6 Federal Awards Expended 
During the Fiscal Year. Commenters noted that it would be more useful 
to Federal agencies that issue direct awards if the Form gathered 
information related to the source of pass-through funds.
    Response: No change to Form. OMB agreed that this information can 
be useful. However, this change would require significant programming 
change to the proposed form. We will consider a requirement to collect 
pass-through information in a future iteration of the form.
    Comments: Part III: Federal Programs, Item 6(f)--Loan/Loan 
Guarantee. Clarification is needed on how to treat awards with loan and 
non-loan components.C
    Response: Change made to instructions. Guidance is added to the 
``instructions'' section to indicate respondents are to treat CFDA 
numbers with both loan and non-loan components as they treat R&D 
programs. Specifically, respondents are to place the Loan/Loan 
Guarantee component on one line, and the non Loan/Loan Guarantee 
portion on a separate line.
    Comment: Part III: Federal Programs, Item 6 (j)--Commenters noted 
that if a single audit report has a modified opinion due to a scope 
limitation, there may not be any finding to report. However, the form 
requires it to have a finding when showing a modified opinion on major 
programs.
    Response: No change to Form. When an opinion on a major program 
``modified'', a finding is required in accordance with A-133 Sec.  --
--.510(a) (5).
    Comment: Part III: Federal Programs, Item 6(k)- ``Number of 
Findings'' Commenters suggested a change in the terminology of ``Number 
of Findings'' to ``Number of Significant Findings.'' This wording would 
correlate with the instances where findings are required by A-133 Sec.  
----.510(a).
    Response: Change made to Form and Instructions. OMB agreed in part 
and changed the wording to ``Number of Audit Findings'' to improve 
clarity. Including only ``significant'' findings may confuse auditors.
    Comment: Part III: Federal Programs, Item 7 Federal Award Findings. 
Commenters suggested that listing each finding for each Federal award 
affected by a finding will create redundancy in the report. The same 
level of specificity can be achieved by identifying findings and 
questioned costs by award as is done currently, and requiring the new 
Item 7 to list each finding along with the appropriate Types of 
Compliance Requirements and Deficiencies. The additional information 
collected about each finding from the auditor's report adds burden to 
the states.
    Response: No change to Form. OMB has determined the level of detail 
Federal agencies require in order to identify the problem and high risk 
areas in a specific audit report necessitates the increased finding 
detail in the proposed Form changes. The FAC will work with auditees to 
provide additional technical guidance to reduce the burden of data 
entry.
    Comments: Part III: Federal Programs, Item 7(d)--Standard Audit 
Finding Reference Numbers. Some states already have specific finding 
reference numbering systems. The timing of this proposal will require 
2013 audits to be revised and internal systems to be revised causing 
significant burden. The States request delaying the implementation of a 
new set of standard audit finding reference numbers.
    Response: Change made to instructions. No change to Form. This 
requirement will be postponed to apply to 2014 audit submissions. For 
2013 audit submissions, the Form will request audit finding reference 
numbers follow the suggested standard, but will not require it.
    Comments: Part III: Federal Programs, Item 7(e)--Type(s) of 
Compliance

[[Page 69453]]

Requirement(s) Commenters suggested that fields be added in Part III to 
include the name of pass-through entity and the identifying number 
assigned to the pass-through entity if applicable as required by OMB 
Circular A-133.
    Response: Change made to Instructions. No change to Form. OMB will 
consider this information for inclusion on the next version of the Form 
SF-SAC. For the 2013 Form SF-SAC, FAC will advise respondents pass-
through information can be entered in the data field for 6(c), the 
``Federal Program Name'' field.
    Comment: Part III: Federal Programs, Item 7(e), Type(s) of 
Compliance Requirement(s). Commenters noted that one finding could 
contain multiple compliance requirements. This would make analyzing the 
data more challenging. They noted that it may be helpful to have, for 
each compliance requirement, a separate row for each finding number and 
CFDA combination.
    Response: No Change to Form. Capturing the compliance requirements 
separately for each audit finding is a reasonable request, but would 
require substantial programming and redesign of the proposed form. We 
will consider for future version of the Form.
    Comment: Part III: Federal Programs, Items 7(f),(g),(h),(i),(j)--
Type(s) of Finding(s)--For each audit finding listed on Part III, Item 
7, the auditor must mark a valid combination of five Type(s) of 
Finding(s): Modified Opinion, Other Noncompliance, Material Weakness, 
Significant Deficiency, or Other. Commenters suggested that another 
combination may be added to matrix of valid combinations. There are 
instances of material noncompliance may be identified that do not rise 
to the level of modifying an opinion on a major program. Commenters 
noted that it is confusing to include ``Modified Opinion'' as a type of 
deficiency at all. They believe it would be more appropriate for this 
column to be displayed separately, similar to the column for questioned 
costs. They suggest separating the ``Other Noncompliance'' and 
``Material Weakness'' columns to indicate that they are related to the 
opinion on compliance, and not on controls over compliance.
    Response: Change made to Form and Instructions. Compliance Findings 
and Internal Control Findings will be differentiated. ``Other 
Noncompliance'' will change to ``Other Matters''.'' Other'' will change 
to ``Other Findings''. Additional instructions are provided to clarify 
the reporting combinations.
    Comments: Part III: Federal Programs, Item 7 (k), Questioned 
Costs--For each audit finding, the auditor will report any Questioned 
Costs related to that finding. The auditor must only mark ``Y'' or 
``N'' to indicate the existence of questioned costs. Some commenters 
want to improve accountability by also capturing the amount of 
questioned costs. Other commenters note that the amount is sometimes 
difficult to determine.
    Response: No Change to Form. It was noted that the precision and 
accuracy of the questioned costs amount would be questionable and may 
be misinterpreted. OMB will revisit this topic for inclusion of 
questioned costs on a future version of the Form.
    Comments: General--Auditors and auditees will be required to 
certify that their reporting package does not contain Personally 
Identifiable Information (PII). Commenters noted inconsistent 
definitions of PII defined in the Form and the proposed Grant Reform 
guidance. The commenters also suggested that more guidance is needed to 
determine how to address specific instances where the PII policy is not 
clear.
    Response: No change to Form. OMB will table this requirement and 
continue development of a PII policy for the implementation in a later 
year.
    Comments: General- PDFs of audit report submissions must be 
unlocked, unencrypted, and at least 85% of the pages must be text-
searchable. Commenters expressed concern the electronic signatures in 
audits could possibly be misused as well as expose independent 
auditor's opinions to potential alteration in audit reports. There are 
specific business risk policies in place at CPA firms that would not 
permit and audit report to be issued in an unlocked format. Therefore, 
some commenters suggested submission of two documents.
    Response: No change to Form. OMB believes the proposed PDF 
requirements allow auditors to submit audits with non-searchable 
opinions. Since 85% of the pages must be text searchable, allowance for 
a few scanned pages is given. However, OMB will consult AICPA and audit 
firms to improve implementation through improved outreach and 
instructions.
    Comment: General- Some commenters recommended that the costs of the 
single audit be recorded on the Form.
    Response: No change to Form. OMB will consider this on the next 
version of the Form.
    Comment: General- One commenter requested OMB remove the 
requirement that the auditor is required to complete Part II (financial 
Statements) and Part III (Federal Programs). Other commenters suggested 
that the auditee should be required to upload the SEFA information into 
Part III, item 6--Federal Awards Expended During the Fiscal Year. This 
would allow the auditee to take ownership in the submission, and enable 
the submission to be completed earlier. Other commenters questions 
whether Items 2 and 3 in Part III should be excluded from the 
certification statement, as they are not transferred from the auditor's 
report. Additionally, new item 6(k) and fields in Item 7 may be other 
exceptions, as they are not directly taken from the auditor's report.
    Response: Change made to instructions. No change to Form. The 
Form's auditor certification states the data in Part II and Part III 
was entered by the auditor. OMB does not believe the responsibility for 
entering data and the certification statements should change at this 
time. Additional guidance will be added in the Form Instructions.
    Comment: General- One commenter expressed concern that password 
requirements should be improved to make them more secure.
    Response: No change to Form. Currently, the requirements for 
passwords meet Federal standards. In the new data collection 
application, each user will have individual passwords to access the 
application. Passwords will not be shared between auditors and 
auditees, or between auditor employees. Individuals and audit firms can 
implement their own password requirements in addition to Federal 
requirements.
    Comment: General- Commenters recommended that the full single audit 
report be made available to pass-through entities. This would 
significantly decrease administrative burden to sub-recipients, who 
must submit duplicative information to the Clearinghouse and to pass-
through entities.
    Response: No change to Form. The proposed revisions to the Grant 
Management Circular, published in February 2013, proposes making audits 
available publicly. When the audits are publically available, pass-
through organizations, especially states, will have access to audits 
through the FAC Web site. OMB will continue development of a policy for 
the implementation.
    Comment: General- Commenters ask which information the FAC collects 
is the official record of the Single Audit: (1) The audit report 
uploaded to the Clearinghouse Web site, or (2) the audit report given 
to the auditee.

[[Page 69454]]

    Response: No change to Form. Section Sec.  ----.320 of the Circular 
A-133 states the submission of the data collection form and audit 
package are required to comply with the provisions of the Circular. The 
submission of these documents is the official record of the single 
audit for the Federal government.
    Comment: General--In order to comply with guidance provided in 
Section 703 of the OMB Proposed Uniform Guidance, CIGIE/and the NSACs 
request that OMB consider adding an option for ``Audit under 
Threshold''.
    Response: No change to Form. OMB will consider alternate submission 
options for audits with expenditures of Federal awards below the 
minimum threshold in the future when the proposed uniform guidance is 
finalized and effective.
    Comment: General--Commenters requested a question be added: ``Was a 
Management Letter Issued?'' Under new GAS and AICPA standards, auditors 
are no longer required to include a statement regarding management 
letters in the report. Agency officials will not be notified when a 
management letter has been issued.
    Response: No Change to Form. OMB will consider adding this 
information on a future iteration of the Form.
    Comment: General--Some commenters asked for a new requirement for 
the text of each finding and auditee response be added to the data 
collection form.
    Response: No Change to Form. OMB will consider adding this 
information on a future iteration of the Form.
    Comment: General--Some commenters questioned why the estimated 
hours to complete the SF-SAC have not changed since 2008, particularly 
considering the changes to expand the amount of data collected on the 
Form.
    Response: No Change to Form. Although the Form has been revised to 
add a few additional information inputs, it has also been revised to 
streamline the reporting of data inputs including the upload of the 
Form electronically. We believe that on the average hours to complete 
the form remain leveled.
    Comment: General--Commenters requested training materials such as 
how-to videos, articles, and other means to help auditors and auditees 
prepare and avoid last minute submission problems with the new Form.
    Response: No change to Form. The FAC will make additional efforts 
to disseminate information on upcoming changes before the official 
roll-out of the Form.
    Comment: General--Some commenters suggested that for audits that 
are currently completed, respondents be permitted to submit the 2013 
audits on the 2010--2012 Form SF-SAC. They note that many audits are 
already done for 2013, and changing requirements will increase 
administrative cost and respondent burden.
    Response: No change to Form. For consistency of reporting, all 2013 
audits should be reported using the 2013 form. We expect the 2013 Form 
to be available in October. OMB will extend a waiver for due dates 
falling before the Form is approved and available.
    Comment: General--Commenters advised that the FAC should prepare 
for numerous submissions in a short timeframe. When the 2013 Form is 
approved and released, there will be numerous submissions occurring 
simultaneously.
    Response: No change to Form. The FAC is working to ensure a smooth 
transition to the new submission system.
    Comment: General- Commenters recommends rigorous testing of the 
internet submission system to ensure that it is working properly. AICPA 
comments that they would be willing to assist the Clearinghouse with 
this endeavor.
    Response: No change to Form. The FAC staff is continuously 
improving and testing the usability and functionality of the new Form 
and the new system.
    Comment: General- Commenters requested that due dates for reporting 
packages be clarified when due dates fall on holidays or weekends. 
Additionally, AICPA notes that questions arise as to the time zone that 
is used to identify when the audit is due. AICPA recommends that FAC 
and OMB address these questions in the Frequently Asked Questions 
section or in another readily available manner.
    Response: No change to Form. OMB agreed to allow extensions until 
the next business day for nine-month due dates that fall on non-
business days such as weekends and holidays. FAC will make these 
adjustments automatically. If a submission in a different time zone was 
on time in the auditee's time zone, but marked as late by the FAC 
system in the Eastern time zone, the FAC is allowed to make time-zone 
adjustments to submissions by request.

Norman S. Dong,
Deputy Controller.
[FR Doc. 2013-27585 Filed 11-18-13; 8:45 am]
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