PSIC funds are subject to the standard Federal audit requirements established by OMB Circular A-133, Audits of States, Local Governments, and Non-profit Organizations. OMB Circular A-133 sets forth standards for obtaining consistency and uniformity among Federal agencies for the audit of non-Federal entities expending Federal awards. PSIC is also subject to anOMB Circular A-133 Compliance Supplement. This supplement includes the PSIC-specific requirement that grantees provide a 20 percent non-Federal match on acquisition, deployment, and management and administration costs. For Territorial governments, if the matching requirement is more than $200,000, the affected Territory is exempt from the first $200,000 of the matching requirement and is responsible for providing match above and beyond $200,000.
Additionally, PSIC statutory audit requirements are included in the Implementing Recommendations of the 9/11 Commission Act of 2007. This legislation outlines the requirement that the Inspector General (IG) of the Department of Commerce is required to conduct financial and programmatic audits of entities receiving PSIC grants, beginning in 2008. Over the course of 4 years, the IG is expected to audit a representative sample of not fewer than 25 States or Territories.
PSIC grantees must comply with all programmatic and financial requirements, as well as all applicable OMB Circulars during the grant period of performance. Below is a list of potential areas of audit. Grantees are encouraged to review the PSIC Grant Guidance and Application Kit, OMB Circular A-133, and the Audit Information and Preparation Toolkit for more detailed information.
- Program Funding Goals
- Technology Goals
- All Hazards Mitigation Goals
- Strategic Technology Reserve (STR) Requirements – States must demonstrate and document that their STR equipment is pre-positioned in advance for immediate deployment in an emergency situation or major disaster. The STR must also be capable of re-establishing communications when existing critical infrastructure is damaged or destroyed in an emergency or a major disaster.
- Pass-through Requirements – States must pass-through 80 percent of the total award unless they have in place Memoranda of Understanding allowing them to retain more funds. Puerto Rico must pass-through 50 percent of their total award amount. The Territories and the District of Columbia have no pass-through requirements.
- Allowable Cost Requirements – Grantees may only expend PSIC funds on Allowable Cost categories. The Allowable Cost categories are Statewide Planning, Management and Administration, Acquisition, Deployment, Planning and Coordination, and Training. Statewide Planning and Management and Administration costs may only be expended at the State level.
- Match Requirements – Grantees must provide a 20 percent non-Federal match on Acquisition, Deployment, and Management and Administration costs. Match is waived for Territorial governments if they expend less than $200,000 on costs requiring match.
- Standard Assurances – Grantees are expected to comply with all of the Standard Assurances in Standard Form 424, that they submitted with their grant application.
This brochure is intended to assist grantees in understanding the Federal, statutory, financial, and programmatic audit requirements. Grantees may use this information to familiarize themselves with standard audit policies and procedures as well as PSIC-specific audit requirements.