PART 2 - MATRIX OF COMPLIANCE REQUIREMENTS
This Part identifies the compliance requirements that are applicable to the programs included in this Supplement. Because Part 4, Agency Program Requirements (or Part 5, Clusters of Programs) does not include guidance for all types of compliance requirements that pertain to the program, (see introduction to Part 4 for additional information), the auditor should use this Part, rather than Part 4 (or 5) to identify the types of compliance requirements that are applicable. The boxes for each type of compliance requirement will either contain a "Y" (for yes if the type of compliance requirement may apply) or be shaded (if the program normally does not have activity subject to this type of compliance requirement).
Even though a "Y" indicates that the compliance requirement applies to the Federal program, it may not apply at a particular non-Federal entity, either because that entity does not have activity subject to that type of compliance requirement or the activity could not have a material effect on a major program. For example, even though Real Property Acquisition/Relocation Assistance may apply to a particular program, it would not apply to a non-Federal entity that did not acquire real property covered by the Uniform Relocation Assistance and Real Property Acquisition Policies Act. Similarly, a "Y" may be included under "Procurement;" however, the audit would not be expected to address this type of compliance requirement if the non-Federal entity charges only small amounts of purchases to a major program. The auditor should exercise professional judgment when determining which compliance requirements marked "Y" need to be tested at a particular non-Federal entity.
When a "Y" is present on the matrix and the auditor determines that the requirement should be tested at the non-Federal entity, the auditor should use Part 3, Compliance Requirements, and Parts 4 (or 5), if applicable, in planning and performing the tests of compliance. For example, if a program entry in the matrix includes a "Y" in the Program Income column, Part 3 provides a general description of the compliance requirement. Part 3 also provides the audit objective and the suggested audit procedures for testing program income. Part 4 (or 5) may also include specific information on program income criteria pertaining to the program, such as restrictions on how program income may be used. Part 6, Internal Control, may be useful in assessing control risk and designing tests of internal control with respect to each applicable compliance requirement.
When a compliance requirement is shaded in the matrix, it normally does not apply to the program. However, if specific information comes to the auditor's attention (e.g., during the normal review of the grant agreement or discussions with management) that provides evidence that a compliance requirement shaded in the matrix could have a material effect on a major program, the auditor would be expected to test the requirement. This circumstance should arise infrequently.
Y -- Yes, this type of compliance requirement may apply to the Federal program.
-- Shaded box indicates the program normally does not have activity subject to this type of compliance requirement.
*--- Program does not have a CFDA number, so the Part IV page number is used.
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