Required Contract Provisions

The following provisions are required for audits performed in connection with the CAFR:

  1. The scope of the audit shall be a financial statement audit of KSU to be performed in accordance with auditing standards generally accepted in the United States of America; and the standards applicable to financial audits contained in Government Auditing Standards (GAGAS), issued by the Comptroller General of the United States. This audit should include a determination as to whether KSU's federal expenditures have met the Single Audit threshold established by the Single Audit Act and the provisions of 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements For Federal Awards, and the performance of a single audit in accordance with these standards, if required. To facilitate the compilation of the Commonwealth's Comprehensive Annual Financial Report:
  2. All statements of cash flows should be prepared in the direct method format;
  3. All infrastructure should be recorded on the modified approach; and
  4. Component auditors must provide the APA, as the group auditor of the Commonwealth's CAFR, information it has deemed necessary to meet relevant auditing standards for group audits. This includes information contained below in the section entitled “Required Auditor Correspondence with the APA”, as well as subsequent requests made directly from the APA to the component auditor.
  5. The scope shall also include updated subsequent events procedures for the period from the date of your auditor’s report on KSU’s financial statements until December 9, 2021 for consideration of any additional disclosures warranted for the CAFR. Your auditor shall detail the application of subsequent events audit procedures and report the results of those procedures in a letter that shall be issued to the APA no later than close of business, December 9, 2021.

Required Auditor Correspondence with the APA

The APA is required to be in direct communication with KSU's auditor as required for the group audit of the CAFR. The following correspondence will be necessary:

  1. The Finance and Administration Cabinet (FAC) intends to issue the Commonwealth’s Comprehensive Annual Financial Report by December 14, 2021. If this does not occur, it may be necessary for your auditor to extend the subsequent events procedures through a later date. The APA will contact you or your auditor if this extension of procedures becomes necessary. The audit contract should provide for this contingency and address if and how your auditor will be compensated for this additional work.
  2. Your auditor shall notify our office whenever matters, which may have a significant impact on the Commonwealth's financial statements, come to his/her attention. Your auditor shall be available to the APA to address questions about KSU's financial statements.