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Detailed Audit Approach - Single Audit in Accordance with OMB Circular A-133 Each audit engagement is unique and requires different procedures to meet the specific circumstances. However, the following broad approach is followed for most of our Single Audits. These procedures are generally performed concurrently with the financial statement audit and the reports are issued on the same date. However, this work can be performed at a separate time if requested by management. The following procedures describe our general approach in performing a single audit: Testing of Schedule of Expenditures of Federal Awards and State Financial Assistance and Understanding Internal Controls - Our first step in performing a single audit is obtaining a complete schedule of expenditures of federal awards and state financial assistance from management. While the auditors may assist in the compiling and formatting the schedule, the responsibility of identifying Federal awards and providing information on the Catalog of Federal Domestic Assistance (CFDA) and Catalog of State Financial Assistance (CSFA) numbers, grant/pass-through award number, pass- through agencies, and current year expenditures is the responsibility of management. We will request that a complete schedule be provided before commencement of the single audit procedures. Effective Use of Technology and Auditing Software We recognize that in order to provide maximum value to our clients, audit efficiency is of utmost importance. We are nationally recognized for innovative use of technology in the audit process and have developed a proprietary system for preparing financial statements and workpapers to maximize the benefits of technology. In fact, your concurring principal, Stephen Blann, has served in various roles within the Firm related to technology services, including Technology Champion, Governmental Accounting and Assurance Group; Member of the hiformation Technology Steering Committee and Technology Utilization Committee; and firm trainer. He is an expert in electronic data extraction and analysis, as well as custom application programming. In addition, Rehmann has established an Enterprise Risk Management ("ERM") division dedicated to internal controls and security in the EDP area. We use technology every day to improve profitability, efficiency, and the level of service provided for our clients. We continuously invest in technology purchases, implementation, and the training of all employees. Our clients benefit from the efficiencies gained in the audit process through the use of this technology. Determine Major Programs and Perform Controls/Compliance Testing — A single audit involves detail testing of individual programs (or clusters of programs) which are selected by the auditors using various criterion. Some of the factors are subjective and others have very little flexibility. For example, programs of a certain size must be tested at least every third year. The audit team will select major programs based on the criteria listed in OMB Circular A-133 and their risk assessment process. Programs/clusters selected as major will be communicated to management as soon as they are determined and a detailed request list will be provided. Report preparation and audit finalization — After all the detail testing is completed and related inquiries have been made, the auditors will identify whether any noncompliance or control deficiencies were noted. These instances will be evaluated for magnitude and materiality and an initial determination of method of communication will be made.