Article

APA Update to Specifications for Audits of Counties, Cities, and Towns

February 7, 2020

The Auditor of Public Accounts is proposing the addition of new required audit procedures at Chapter 3 of the Specifications for Audits of Counties, Cities, and Towns for the Fiscal Year 2020 publication. The proposed guidance and audit procedures will be incorporated as a new Section 3-17. These proposed audit procedures are intended to assist in determining compliance with state laws and policies specific to the Virginia Department of Fire Programs’ grants and aid assistance provided to localities. The Specifications set standards for audits of local governments in Virginia, and are required for the annual audits of all cities, counties, and towns over a 3,500 population threshold or operating a separate school division. Chapter 3 of the Specifications includes required audit procedures for determining compliance with certain state laws, regulations, and policies. State agencies need assurance about the proper utilization of assets provided to local governments and that localities have complied with applicable laws and regulations. The new required audit procedures open for public comment are:

Required Audit Procedure: Obtain a copy of the locality’s completed Annual Report and Disbursement Agreement forms submitted to the Department of Fire Programs for the applicable fiscal year under audit. Ensure the Annual Report and Disbursement Agreement forms are properly completed in accordance with Fire Programs’ requirements. Reconcile amounts per the Annual Report to the locality’s accounting records.

Required Audit Procedure: Select a sample of program expenditures reported on the locality’s Annual Report and agree to supporting documentation. For each invoice/transaction selected, determine whether the expenditure was reasonable and consistent with the program requirements, in accordance with Fire Programs’ Aid to Localities Entitlement Program policy manual.

The Specifications for Audits of Counties, Cities, and Towns of the Auditor of Public Accounts will be available online for a 30-day public comment period pursuant to §2.2-4002.1 of the Code of Virginia. You may view or comment on the proposed update at the Virginia Regulatory Town Hall website beginning February 4, 2020 and ending March 4, 2020. Although the public comments are expected to center around the new Section 3-17, the form does not limit comments on any other portion of the Specifications for Audits of Counties, Cities, and Towns.

Additional regulatory and professional associations soliciting public comments include Governmental Accounting Standards Board (“GASB”) and Municipal Securities Rulemaking Board (“MSRB”):

  • GASB: Seeks input on implementation of Statement 87 leases.
  • MSRB: Seeks comments on Board Governance Rules.

If you have any questions or wonder how this may affect your audit procedure, contact your trusted Cherry Bekaert professional.