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Overview of the Nongovernmental Entity Audit Process
Our involvement in the entity audit process is triggered primarily by the filing of an Entity Annual Report (Form E-1). Based on the financial information reported, we advise the entity if an audit, in accordance with these guidelines is required, or if they qualify for a waiver of this requirement. This notification is transmitted within two weeks of our receipt of the Form E-1. Although we realize many entities begin arranging for their audit prior to their year-end, it is impossible for us to transmit our notification prior to reviewing the Form E-1.
Once an entity is notified of their audit requirement, they should confirm with their funding agencies the type of audit required, and begin the process of evaluating and selecting an auditor.
After the entity has selected an auditor, and the auditor has confirmed the type of audit required, two copies of the contract, or engagement letter, should be forwarded to the State Board of Accounts for review and approval. Upon return of the approved contract, the audit should begin.
Upon completion of field work, the auditor should advise the entity and the State Board of Accounts of the date, time and location of the entity's exit conference. Upon completion of the audit, copies of the report should be provided to the entity, all funding agencies and the State Board of Accounts. If additional comments have been provided to the entity in a separate communication such as a management letter, a copy of this should be sent with the report to the State Board of Accounts.
Upon receipt of the audit report, funding agencies will commence their review/resolution process, and the State Board of Accounts will commence the quality control review of the auditor's work.
Upon completion of the quality control review by the State Board of Accounts, the audit report is made available for public inspection by this department. In most instances, our review will be separate and distinct from the audit review/resolution process administered by a funding agency.