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Texas Department of Human Services

POLICY ALERT

Date: August 31, 1999           Reference #: SMP 1999-1
To: Special Milk Program (SMP) Contractors
Subject: Single Audit Documentation and Compliance Requirements for Contractor Fiscal Years Beginning After June 30, 1998
Effective: July 1, 1999


As stated in Policy Alert SNP 97-3, the Single Audit Act was significantly amended in 1996. Included in the amendments were changes to reduce the time frames for contractors to submit an audit as required by the Single Audit Act from 13 months from the end of the contractor's fiscal year to 9 months from the end of the contractor's fiscal year subject to audit. In response, the Special Nutrition Programs adopted a rule in the Texas Register implementing the changes.

Beginning with contractor fiscal years starting after June 30, 1998, the audits for contractors who are subject to the requirements of the Single Audit Act must be received by the Texas Department of Human Services (TDHS) nine (9) months from the end of the contractor's fiscal year subject to audit.

Example: 1) The single audit for a contractor whose fiscal year began July 1, 1998 and ended June 30, 1999, would be due to TDHS by March 31, 2000.
  2) The single audit for a contractor whose fiscal year began December 1, 1998 and ended November 30, 1999, would be due August 31, 2000.
  3) The single audit for a contractor whose fiscal year began June 1, 1998 and ended May 31, 1999, would be due June 30, 2000. Note that this contractor fiscal year began prior to June 30, 1998 and, therefore, would still be subject to the thirteen (13) month time frame for submittal.

You will continue to receive advance notifications of when your audit is due; however, instead of three advance notices, you will now receive two notifications because of the reduced time frame for submitting the audit.

  • TDHS will notify you by regular mail six months after the end of the fiscal year for which your audit is due to remind you of the date by which TDHS must receive your audit.
  • TDHS will issue a second notice to you by certified and regular mail eight months after the end of the fiscal year for which your audit is due. In this notice TDHS will inform you that TDHS must receive the audit on or before the due date specified in this notice.
  • If TDHS does not receive your audit by the specified due date, we will terminate your contract effective the first day of the month following the month in which the audit was due.
  • You will have the right to appeal this decision.
  • If TDHS does not receive your audit by the specified due date, we will notify you by certified and regular mail that we terminated your contract effective the first day of the month following the month in which the audit was due.
  • If TDHS has determined that there are extenuating circumstances, TDHS may conduct an audit, either directly or through the engagement of a third party. You must pay all costs associated with such an audit.
  • If you submit an audit that does not meet the requirements of the Single Audit Act, TDHS will notify you in writing that the audit is unacceptable. You will be given 30 calendar days from the date on the notification to submit an acceptable audit to TDHS.
  • If TDHS does not receive an acceptable audit by the time frame specified in the above notice and TDHS has not granted you an extension of the audit due date, TDHS will notify you by certified and regular mail that:
    • you failed to provide an acceptable audit within the specified time frames;
    • TDHS must receive an acceptable audit by the due date specified in this notification;
    • if TDHS does not receive an acceptable audit by the specified due date, TDHS will terminate your contract effective the first day of the month following the due date specified in the above-mentioned notification; and,
    • you have the right to appeal this decision.

    NOTE: TDHS may extend the time within which you must submit an audit if TDHS determines that such an extension is justified.

  • If TDHS does not receive an acceptable audit by the specified due date and has not granted you an extension of the due date, TDHS will notify you by certified and regular mail that:
    • you failed to provide an acceptable audit by the specified due date; and,
    • TDHS terminated your contract effective the first day of the month following the specified due date.

Once your contract has been terminated for failure to comply with the Single Audit Act, you must provide an acceptable audit for any outstanding audit year(s) and comply with the requirements of the Single Audit Act, as amended, in order to be eligible to participate in the Special Nutrition Programs.

REMINDER

The audit threshold for being required to submit a single audit was changed in the amendments to the Single Audit Act of 1996 from $25,000 in federal financial assistance received during a contractor's fiscal year to $300,000 in federal financial assistance expended during a contractor's fiscal year. This change was effective with contractor fiscal years beginning on or after July 1, 1996. If your organization did not expend $300,000 or more in federal financial assistance during your (contractor) fiscal year subject to audit, you are not required to obtain an audit according to the requirements of the Single Audit Act.

NOTE: TDHS will not review Single Audits for contractor fiscal years in which less than $300,000 in federal assistance was expended.

     
Texas Department of Human Services · 701 W. 51st Street · Austin, Texas 78751
P.O. Box 149030 · Austin, Texas 78714-9030
(888) 834-7406 ·
(888) 425-6889 (TDD)

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   Updated: October 17, 2001