Audit concerns. The city of Cedar expended federal awards from the following programs during 20X3.
|
Program |
Amount Expended |
|
1 Cedar Community Block Grant |
$ 400,000 |
|
2 Hazardous Waste Management |
300,000 |
|
3 Law Enforcement |
250,000 |
|
4 Energy Assistance |
200,000 |
|
5 Economic Development |
150,000 |
|
6 Clean Water Program |
50,000 |
|
$1,350,000 |
Assume the auditor has given an unqualified opinion on the financial statements and reports no material weaknesses or reportable conditions in internal control at the financial statement level. Also, assume the auditor has given an unqualified opinion on the schedule of expenditures of federal awards. Programs 2 and 4 are classified as low risk, and Program 6 was not assessed for risk due to its small size.
1.Which programs should the auditor audit as major programs for the purpose of internal control evaluation and compliance testing for the year 20X3?
2.How would your answer differ if Program 2 was classified as high risk?