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North Carolina Division of Aging and Adult Services

   

Monitoring

Terms and Definitions


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C
Cost Allocation Methodology
Cost allocation plans must provide an explanation of cost and the allocation basis that is proposed.
Cost Deferral
Communication from the grantor agency that notifies a subrecipient that a cost that was claimed for reimbursement is being questioned and delayed pending clarification.
Cost Disallowance
A cost that is determined to be unallowable based on criteria established by the grantor.
D
Desk Audit
A task performed by the Grantor involving a review of the fiscal and/or programmatic records maintained by a subrecipient entity. A desk audit is considered a monitoring tool and is often performed as part of a larger monitoring effort. Desk audits are not usually subject to standard written guidelines and are considerably less involved than a yellow book or a single audit. They are normally prepared off-site and are limited in scope.
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F
Federal Audit
Generally speaking, an audit of a non-Federal entity performed by a Federal agency. Usually, a Federal audit is performed by the Federal "cognizant" agency, or the Federal agency that provided the predominant amount of Federal funding to the auditee. While programmatic in nature, a Federal audit can also include a review of the auditeeís financial records and internal controls.
Financial Assistance (FA)
Federal or State assistance that the State provides to recipients in the form of grants, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance, but generally does not include amounts received as reimbursement for services rendered to individuals such as Medicare and Medicaid (NOTE: All State contracts must be reviewed to determine whether they are "financial assistance" or "purchase of service" type contracts. This determination is necessary to establish whether the contracting agency is a subrecipient or a vendor and must be made by each entity to which the funds are further subgranted (or awarded under contract). Those deemed to be the FA type are subject to the financial reporting requirements of the federal Office of Management and Budgetís Circular A-133 and/or the Office of the State Auditorís Audit Advisory #2. Those deemed to be the POS type generally have no reporting requirements and usually require only the satisfactory delivery of the goods or services being purchased. For specific guidance about FA/POS contract determination (i.e., distinguishing between a subrecipient and a vendor), please refer to APA Rule #T10: 01B .420 and OMB Circular A-133, Subpart B, Section .210).
Financial Statement
A set of documents which outlines/summarizes the revenues and expenditures of an organization.
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General Audit (Annual CPA)
Refers to a basic financial statement audit, otherwise known as a "general purpose financial statement audit".
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Grantor
An entity that provides resources, generally financial, to another entity in order to achieve a specified goal or objective
H
Home and Community Care Block Grant (HCCBG)
Federal and state funds administered by the North Carolina Division of Aging and Adult Services (DOA). The Division receives funds from the Older Americans Act (OAA), Social Services Block Grant (SSBG), and the State General Assembly.
I
Indirect Cost
Indirect cost represents expenditures in support of administrative but that are then allocated to the Federal and State programs that benefit from the administrative activity.
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Internal Controls
The set of written guidelines, policies, and actions that seek to maximize fiscal integrity and minimize the likelihood of misappropriation/misuse by establishing a clearly defined and implemented set of financial checks and balances within an organization
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Monitoring (Program and Fiscal)
"Program Monitoring" means activities performed by the awarding agency to ensure that compliance requirements are being met with respect to the intent of the Federal and State award. "Fiscal Monitoring" means activities performed by the awarding agency to ensure that funds are being expended as intended to carry out the objectives of the program(s). Monitoring activities may take various forms, such as desk audits, reviewing reports submitted by the subrecipient, performing site visits to the subrecipient to review financial and programmatic records and observing operations, arranging for agreed-upon procedures for certain aspects of subrecipient activities, such as eligibility determinations, reviewing the subrecipientís single audit or program-specific audit results and evaluating audit findings and the subrecipientís corrective action plan.
N
Non-Profit State Accountability Act
Refers to the reporting requirements as defined in GS 143-6.1 and to Audit Advisory #2 issued by the Office of State Auditor. These references address the auditing and reporting requirements of all non-governmental entities that receive financial assistance from state agencies.
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Pass-through Entity
As it relates to federally funded programs, a non-Federal entity (i.e., the State) that provides a Federal award to a subrecipient to carry out a Federal program. As it relates to State-funded programs, a non-State entity (i.e., a local government or a nongovernmental entity) that provides a State award to a subrecipient to carry out a State program. Pass-through entities are responsible for monitoring grants to provide reasonable assurance that funds are expended in accordance with State and/or Federal requirements.
Payback
A cost that must be repaid because it is determined to be unallowable based on criteria established by the grantor.
Purchase of Service (POS)
The purchase of goods or services from a vendor (e.g., a dealer, distributor, merchant, or other seller) for the purpose of carrying out a Federal or State program. These goods or services can be for the organizationís own use or for the use of beneficiaries of the Federal program (see NOTE shown under "Financial Assistance (FA)").
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Sampling
The process of selecting and testing a sample set of transactions to determine the projected error rate that shall be applied to all transactions.
Single Audit
An audit that includes both the auditees financial statements (i.e., a yellow book audit) and compliance with the requirements of the Federal and/or State awards. "Single audit" signifies that two or more things that could be audited separately are being covered under one audit, rather than separate audits. The threshold requirement for a Single Audit applies to any entity that receives $500,000 or more in Federal funds. (Please note that monitoring has no similar thresholds but is a consideration in developing a risk assessment and monitoring plan.) Also reference NC GS 159.34 regarding State Single Audit Act.
 
State Audit
Generally speaking, an audit performed by the Office of the State Auditor of a Department or Division as part of the Stateís Single Audit. However, this term may also refer to subrecipient monitoring activities performed by the awarding State agency. "State Audit" can also refer to a Performance Audit as requested by the General Assembly or management within State government. A Performance Audit often reviews the effectiveness or efficiency of a program or service or adherence to statutes and program policy.
Subgrantee
The term "subgrantee" and "subrecipient" are often used interchangeably. Refer to the definition of "subrecipient" below.
Subrecipient
A non-Federal entity that expends Federal awards received from a pass-through entity (i.e., the State) to carry out a Federal program, but does not include an individual that is a beneficiary of such a program. An agency or organization that receives Federal or State awards from the DHHS. These agencies are usually non-profit or governmental agencies or organizations, but in some instances may be for-profit entities.
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Withholding of Funds
The method by which the grantor recoups funds from a subrecipient entity by withholding (i.e., netting) such amounts from future disbursements to that entity. This is a method utilized by the funding agency to force a payback.
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Yellow Book Audit
A financial audit including an assessment of internal controls that is performed in accordance with "generally accepted government auditing standards" (GAGAS) issued by the Comptroller General of the United States.
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Last updated October 9, 2008

 

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