HomeMy WebLinkAboutResolutions - 1990.08.09 - 18218FINANCE COMMITTEE
MISCELLANEOUS RESOLUTION #90188 August 9, 1990
BY: FINANCE COMMITTEE, DR. C. WIIILIAM CADDELL, CHAIRPERSON
IN RE: DEPARTMENT OF MANAGEMENT AND BUDGET - FINANCIAL AND COMPLIANCE
AUDIT OF THE LOCAL HEALTH DEPARTMENT
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Mr. Chairperson, Ladies and Gentlemen:
WHEREAS Section 7502 of The Single Audit Act of 1984, as well as
applicable Federal and State laws and regulations, require audits of
Federal and State pass-through funds allocated to local health
departments; and
WHEREAS the Michigan Department of Public Health (MDPH) proposes an
agreement between the MDPH, the County, and an independent audit firm (the
firm to be named by the County) to conduct a financial and compliance
audit of the pass-through funds allocated to the Oakland County Health
Division for state fiscal year 1988-1989 and the calendar year 1989; and
WHEREAS the County Executive proposes the firm of KPMG Peat Marwick
conduct the audit, that firm being contracted to conduct the 1989, 1990,
and 1991 Annual County Audit pursuant to Miscellaneous Resolution #89143;
and
WHEREAS the proposed agreement, which operated between July 1 and
September 30, 1990, includes State funding, up to $21,410 to conduct the
audit, no County resources are required; and
WHEREAS the Office of Corporation Counsel has reviewed the agreement
and has approved it as to legal sufficiency; and
WHEREAS this will become an annual audit, thus requiring amendments to
the 1990/1991 Biennial Budget, and inclusion in future budgets.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of
Commissioners approves the agreement between the Michigan Department of
Public Health, the County of Oakland, and KPMG Peat Marwick to conduct a
financial and compliance audit of Federal and State pass-through funds
allocated to the Oakland County Health Division.
BE IT FURTHER RESOLVED that the following amendments to the 1990/1991
Biennial Budget be made:
Revenue
3-22100-162-01-00-2597
Expenses
4-22100-162-01-00-3216
Special Contracts
Auditing Service
1990
$21,410
21,410
$ -0-
1991
$21,410
21,410
$ -0-
Mr. Chairperson, on behalf of the Finance Committee, I move the
adoption of the foregoing resolution.
Y APPROVE THE FOREGOING RESOLUTION
i/L3//0
ClaW
•L
Agreement Between
Michigan Department of Public Health
hereinafter referred to as the "Department"
and
County of Oakland
hereinafter referred to as the "Agency"
and
KPMG Peat Marwick
hereinafter referred to as the "Auditor"
for
Audit Services
Purpose
The purpose of this agreement Is to establish and define the responsibilities
of the Michigan Department of Public Health, the county government and the
Auditor In implementing Section 7502 of the Single Audit Act of 1984, as well
as applicable Federal and State Laws and Regulations pertaining to auditing
Federal and State pass-through Funds awarded to local health departments
throughout the State.
Methodology
The Agency, in coordination with the Department, will contract with a
qualified CPA firm to conduct an audit which satisfies the Financial and
Compliance audit requirements of the Department, as prescribed In Rider A
hereto attached.
Program Budget and Budget Amount
The Department, under the terms of this agreement, will provide funding not to
exceed $21,410. The agreement Is conditionally approved subject to the
availability of funds.
Responsibilities - Agency
The Agency, In accordance with the general purposes and objectives of this
agreement, will:
1. Arrange for an extension of Agency's 1989 contracted audit services to
satisfy the financial and compliance audit requirements of the
Department.
2. Make provisions for assisting In the work of the audit to the extent
possible, including making accessible all records and documentation
required for the audit.
3. Submit the name of the Auditor selected to the Department for review and
approval, prior to the Department's signing of this agreement.
4. Assure that the Department of Public Health will not be charged for any
additional audit costs directly or indirectly.
5. Review the draft of the audit report within thirty (30) days from the
date of the exit conference and provide comments on the draft to the
Auditor and the Department.
6. Attend the exit conference and discuss the preliminary audit findings
with the Auditor.
?
Oakland County Health Department
Agreement for Audit Services
Page 3
4. Provide access to the audit work papers to the Agency, Department
personnel, and other Federal and State representatives during the audit
and for up to three (3) years from the date of the final audit report.
5. Bill the Agency directly for the audit services provided. Submit
detailed bill showing hours worked by each level of personnel Involved.
6. Keep the Department and the Agency Informed of the progress In the audit
at all times.
•
Assurances
• In compliance with
Title VI of the Civil Rights Act of 1964 and the Regulations of the U.S.
Department of Health and Human Services issued thereunder, and Section
504 of the Rehabilitation Act of 1973, and the Michigan Handicapper's
Civil Rights Act (1976 P.A. 220), The Elliott-Larsen Civil Rights Act
(1976 P.A. 453) and The Rules of the Michigan Civil Rights Commission
which have been promulgated and adopted pursuant to the requirements of
the Administrative Procedure Act of 1969 (1969 P.A. 306) as amended:
The Agency and the Auditor assure that, in carrying out this
program, no person shall be excluded from participation, denied any
benefits, or subjected to discrimination on the basis of race,
creed, age, color, national origin, or ancestry, religion, sex or
marital status (except where a bona fide occupational qualification
exists). This policy of non-discrimlnatIon shall also apply to
otherwise qualified handicapped Individuals.
Payment and Reporting Procedures
Financial Status Reports (FIN-130) shall be prepared by the Agency and
submitted to the Department, Grants and Contract Management Section, not more
frequently than monthly, nor later than fifteen (15) days after the close of
the calendar month. Monthly Financial Status Reports must reflect only those
actual expenditures billable directly to the Department under the terms of
this Agreement.
Twenty (20) percent of the agreement amount will be withheld until the audit
report Is accepted by the Department.
Any unobligated balance of funds on hand at the Agency at the end of the
agreement period will be returned to the Department or treated In accordance
with the Instructions provided by the Department.
• Agreement Period
This agreement Is In full force and effect from 07/01/90 through 09/30/90.
This agreement may be terminated by any party to the contract by giving thirty
(30) days written notice to the other parties stating the reasons and •
effective date of termination.
r.
RIDER A
FINANCIAL AND COMPLIANCE AUDIT
OF
. LOCAL HEALTH DEPARTMENT
This document Is Intended to outline the audit scope and other conditions
applicable to a financial and compliance audit of the local health department
as required by the Michigan Department of Public Health.
AUDIT GUIDELINES
The audit must be performed in accordance with the following:
a. OMB Circular A-128 (related to the single audits of State and Local
governments).
b. Sing-le Audit Act of 1984.
c. A1CPA Statements on Auditing Standards.
. Government Auditing Standards (1988 or subsequent revision) — Commonly
referred to as the "Yellow Book" or generally accepted government
auditing standards (GAGAS).
e. Compliance Supplement for Single Audits of State and Local
Governments.
f. OMB Circular A-87.
The following guides should be helpful In planning and performing the audit:
a. Cost Sharing (CPBC) Program guidelines prepared by the Bureau of
Community Services, Michigan -Department of Public Health.
b. AICPA Audit and Accounting Guide — Audits of State and Local
Governmental Units.
c. Michigan Public Health Code (Act 368 of 1978 as amended).
d. Uniform Accounting Procedures Manual for County and District Health
Departments in Michigan issued by Michigan Department of Treasury.
SCOPE
The Independent auditor must perform sufficient auditing procedures necessary
to obtain competent evidential matter that would enable him/her to do the
following:
1. Study and evaluate the adequacy of the Internal control at the local
health department.
2. Express an opinion on the financial statements and the result of
operations of the Health Department. If an opinion cannot be formulated,
the reason(s) must be stated In the audit report.
3. Determine that the expenditures reported to MDPH on cost sharing (CPBC)
and categorical program reports are budgeted, actual, allowable, and
supported by proper documentation. These expenditures must'also be
traceable to the health department's general ledger and reconcilable to
reimbursements by KPH. Refer to the specific program guidelines, budgets
and agreements.
1
* Rider A:
10. Determine that encumbrances are accurately reported, obligated and
liquidated In the proper fiscal year. •
11. Provide assurances (positive or negative) regarding compliance with state
and federal statutory requirements. Refer to the Federal and State
statutory compliance review questionnaires prepared by MDPH. Also, refer
to the compliance supplement issued by the Federal Office of Management
and Budget.
Audit Program Requirements
Within thirty (30) days from the date of the contract, the auditor should make
a preliminary evaluation of the system of internal control at the health
department and may be requested to submit a detailed audit program to the
Michigan Department of Public Health for approval. The audit program must
Identify the audit procedures and the sample size of Items to be tested as
well as the names(s) of auditors who will perform the tests.
The auditor must keep the audit program and workpapers to support the actual
testing and all other audit procedures applied for a minimum of three (3)
years from the date of the audit report, and must be available for examination
by MDPH, Federal and other authorized state auditors at any time during the
three—year period.
Audit Report Requirements
An audit report shall be Issued In the name of the local health department and
the Michigan Department of Public Health, and should contain financial
statements for the health department and appropriate schedules, narrative
explanations, statistical tables and health contract information. The
following Is the expected format for the audit report:
1. Introduction Section •
This section will contain a table of contents, letter(s) of transmittal, a
brief description of the agency being audited and a listing of
programs/contracts included In the audit.
2. Financial Section
a. Scope
This subsection must identify the extent of auditing procedures
applied, the objective of the audit and whether some records have not
been examined. It should also include the period covered by the aTdit
and a statement that the audit was made In accordance with generally
accepted government auditing standards.
b. Opinion
The audit must express, in accordance with generally accepted
government auditing standards, an opinion, (qualified, unqualified or
adverse) on the health department's financial statements and relevant
schedules.
If an opinion cannot be expressed, the auditor must state his/her
reasons for disclaiming an opinion.
I
3
Rider A
1) An identification of total audited net allowable and required
expenditures.
2) Recalculation of the cost sharing funding based on the audited
data and application of the appropriate funding percentages.
3) A comparison of the recalculated cost sharing amount With the
reported amounts on the final cost sharing financial status report
submitted to MDPH.
4) Identification and recommendations for any adjustments that will
result from the above procedures.
5) A September 30 year end format that may be used Is as follows:
Description Required Allowable Total
Reported Net Allowable Per
FYE 09/30/ CFTC FSR
Expenditure Adjustments: (listed) $
Exclusion Adjustments: (listed) $
Audited Net Allowable Cost $ $ S
MDPH Funding Share X % X %
MDPH Funding Recalculated $ $ $
MDPH Payments to Date $ $ $
-
MDPH Funding Adjustments $ $ $
Where possible, plea-se explain the Expenditure and Exclusion
adjustments as to the reason for the adjustment and what programs
or activities are affected.
c. The auditor's verification and calculations of the indirect cost rate
proposal. The proposal Is normally prepared by the local health
department using financial data for the year under audit. The
proposed indirect cost rate is then applied to grants in effect two
years following the audit period. This schedule should include YEE
Tollowing: - -
1) A recalculation of the rate based on the audited financial data.
The indirect rate computation, with carryforward adjustment is to
be done according to form FIN-140 "MDPH Administrative Overhead/
Indirect Cost Rate Calculation Schedule."
2) A comparison of the recalculated rate with the proposed rate
submitted to MON. identify in detail the reasons for any
adjustments. (Refer to Federal Circular OASC-10 issued by U.S.
Department of Health and Human Services for assistance In the
review and preparation of indirect cost rata proposals).
d. Encumbrance and encumbrance liquidation activity for each grant fiscal
year. Determine that the liquidations were not reported twice for
MDPH reimbursement; once in the program fiscal year In whicn the
expense was obligated and again in the subsequent program fiscal year
when the expense was paid.
5
Rider A
Additional Provisions
1. A draft report should be submitted to MDPH for review and comments -prior
to the issuance of the final report.
2. The audit report should be produced In final form with 15 copies sent to:
Stan Weyer, Finance Officer
Office of Budget and Finance
Michigan Department of Public Health
3423 North Logan Street, P.O. Box 30195
Lansing, Ml 48909
•
RESOLUTION # 90188 August 9, 1990
Moved by Caddell supported by Pappageorge the resolution be adopted.
AYES: Johnson, R. Kuhn, Law, McConnell, McCulloch, McPherson , Moffitt,
Oaks, Olsen, Pappageorge, Pernick, Rewold, Skarritt, Wolf, Aaron, Caddell, Chester,
Crake. Ferrens, Gosling, Huntoon, Jensen. (22)
- - NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND
I, Lynn D. Allen, Clerk of the County of Oakland, do hereby certify that the foregoing
resolution is a true and accurate copy of a resolution adopted by the Oakland County
Board of Commissioners on August 9, 1990
with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set Iv hand and affixed the seal of the Cmunty
of Oakland at Pontiac, Michigan this 9th day Of—) -AILWat 1941
of,-A • LA,V
Lynn/J. Allen, County Clerk