Under the Financial Management Oversight (FMO) Program FTA conducts several types of reviews.
- Full Scope Financial Management System Review: This review requires FMO contractors to conduct a series of interviews, full transaction reviews, and appropriate substantive tests. The contractors determine whether the recipient's financial management system meets the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200). The contractors then express an objective, external, independent professional opinion to FTA, in accordance with established public accounting standards, on the effectiveness of the recipient's internal control environment. The seven standards (2 CFR Part 200.302 (b)(1-7) for financial management systems include:
- Financial Reporting
- Accounting Records
- Internal Control
- Budget Control
- Allowable Costs
- Source Documentation
- Cash Management
- FMO contractors will also review Project Change-Grants Management as part of 2 CFR Part 200.308
- Follow-up Reviews: Follow-up Reviews are performed primarily to ensure the recommendations resulting from Full Scope Reviews are implemented and working properly. If performed, this review will occur between 12-18 months after the Full Scope review.
- Cost Allocation Plan and Indirect Cost Proposal Reviews: These reviews are performed on Cost Allocation Plans and Indirect Cost Rate Proposals submitted to the FTA for approval as the cognizant agency. The purpose of these reviews is to determine whether the methodology for allocating indirect costs to a federal grant are calculated in a manner consistent with the applicable OMB circular.
- Agreed Upon Procedures: Agreed-Upon Procedures (AUP) engagements are performed primarily to focus on a particular issue (e.g., review of recipients’ use of FTA funds for a particular project or review of the recipient’s methodology for charging costs to a particular grant). While varying types of engagements may employ Agreed-Upon Procedures, in most cases, FTA is concerned about whether grant funds were spent according to the guidelines of the grant and in accordance with the applicable cost principles. These reviews are conducted on a case-by-case basis and are directly related to the recipient’s financial management issues.
- Financial Condition and Capability Assessment: This review is conducted to assess a recipient’s financial condition and capability to maintain and operate the existing system and to complete its annual program of projects. The recipient must demonstrate its ability to match and manage FTA grant funds, cover cost increases and/or operating deficits through long-term stable and reliable sources of revenue, and maintain and operate Federally-funded facilities and equipment.
Updated: Monday, November 19, 2018