New Details on Pension Auditing, MD&As and the New "Super Circular"

Emerging Details on Pension Auditing

The American Institute of Certified Public Accountants (AICPA) is finalizing recommendations to the defined benefit pension audits, upon implementation of GASB 67 and GASB 68 (recently amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an Amendment of GASB 68). In this article, we explore issues related to information for employer reporting in cost-sharing multiple-employer plans, issues associated with testing census data in an audit of financial statements, and the framework of testing for employers within single employer and agent multiple employer plans. Read the full article.

Building a Better Management Discussion and Analysis (MD&A) 

A recent study on the effectiveness of financial reporting, sponsored by the International City Management Association and co-authored by Northern Illinois University revealed that in cases in which management use their financial statements to inform policy decisions, more than one-third tend to glean information from the Management Discussion and Analysis (MD&A), not from disclosures and government-wide statements introduced via GASB 34. More than two-thirds still rely on fund financial statements, in particular governmental funds (pre-GASB 34).

This presents an interesting challenge. If management does not use audited financial statements to make policy decisions, then the MD&A needs to be structured to assist managers in making decisions. In this article, we discuss how to build a better MD&A. Read the full article.

The New "Super Circular" and Indirect Costs

More details of the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards are coming to light. The White House Office of Management and Budget (OMB) recently published Frequently Asked Questions with regard to the Super Circular. The new guidance will impact federal agencies, non-federal entities (states, local governments, Indian tribes, institutions of higher education (IHE) and nonprofit organizations) that receive federal awards as a recipient or sub-recipient. In this article, we explore the indirect costs as addressed in these changes. Read the full article.

FAQs Now Available on the New "Super Circular"    

Frequently Asked Questions have now been published by the federal government on the new Super Circular. One of the more controversial sections of the new Super Circular has been clarified in the FAQs. Section 200.303 requires that non-federal entities must establish and maintain effective internal controls over the federal award. The paragraph then indicates that the internal controls should be in compliance with the guidance in the General Accountability Office's (GAO) Standards for Internal Control in the Federal Government (Green Book) and the internal control framework contained in COSO. The implications of "must" and "should" is discussed. Read the full article and access the FAQs.

If you have questions on any of these topics, please contact Eric Berman or your Eide Bailly representative.