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Reimbursement for Agency-Wide Single Audits

This Management Bulletin (MB) advises agencies participating in the Child and Adult Care Food Program (CACFP) about funding that may be available for some costs associated with an agency-wide annual audit if the agency expends $500,000 or more in federal financial assistance. This MB also clarifies the amount of audit cost reimbursement an agency can receive for the auditing costs associated with a CACFP annual audit and the process for requesting reimbursement. The availability and amount of reimbursement an agency can receive is subject to the following conditions and formula:

1. The amount of audit cost reimbursement an agency can receive is dependent on the amount of audit funds available from the California Department of Education.
2. Reimbursement will be allowable only if the audit tested the CACFP funds in accordance with the Office of Management and Budget’s (OMB’s) Circular A-133 Compliance Supplement for Audits of States, Local Governments, and Non-Profit Organizations, Section 10.558, and presents the appropriate reimbursement schedules. In California, the audit requirements outlined in the compliance supplement also apply to for-profit agencies participating in the CACFP. You may access this information on the OMB’s Web page at:

http://www.whitehouse.gov/sites/default/files/omb/assets/omb/circulars/a133/a133.pdf

3. In addition, the agency must ensure that all six of the following conditions are met:
   1. The appropriate Annual Audit Status Certification (AASC) form is on file with the Audits and Investigation Division (A&I).
   2. The single audit includes the required reimbursement schedules and has been accepted by the A&I.
   3. All outstanding child nutrition accounts receivable have been paid.
   4. A copy of the engagement letter between the Certified Public Accountant (CPA) and the institution has been submitted to the A&I.
   5. The CPA’s itemized invoice listing the cost by each fund audited has been submitted to the A&I.
   6. A copy of all cancelled checks showing payment to the Certified Public Accountant has been submitted to the A&I.

The amount of reimbursement will be determined by dividing the agency’s federal CACFP funding by the total federal and state financial assistance expended and then multiplying the resulting percentage by the cost charged by the CPA for performing the agency’s single audit. Accordingly, the formula for audit cost reimbursement is:

Federal CACFP Funding (a) / Total Federal and State Financial Assistance (b)
X CPA's Audit Cost (c) = Audit reimbursement (d)

Single Audit Calculation

For agencies submitting a Program Specific Audit, the amount of reimbursement is determined by dividing the agency’s federal CACFP funding by the total federal and state CACFP funding and then multiplying the resulting percentage by the cost charged by the CPA for performing the agency’s program specific audit. Accordingly, the formula for audit cost reimbursement is:

Federal CACFP Funding (e) / CACFP Funds - Federal & State (f)
X CPA's Audit Cost (g) = Audit reimbursement (h)

Program Specific Audit Calculation

An agency may submit its request for audit cost reimbursement with the submission of its annual single audit to:

Audits and Investigations Division (A&I)
California Department of Education
1430 N Street, Room 5201
Sacramento, CA 95814

If you have any questions regarding receiving reimbursement for your agency’s annual single audit, please contact the A&I at 916-322-2288 for assistance. You may also contact J.R. Waltz, Audit Manager, at 916-323-6799 or by e-mail at jwaltz@cde.ca.gov.