The Single Audit PBC List: What Your Auditor Will Request

PBC stands for Prepared By Client (some firms say "Provided By Client"). Usually a few weeks before interim testing or fieldwork, your auditor gives you a request list covering everything they need to perform the audit. There are typically separate lists for interim and for fieldwork.

It helps to separate two things:

• The PBC list is the input: the records, schedules, and documentation you hand the auditor.
• The reporting package is the output: the audited financial statements, Schedule of Expenditures of Federal Awards (SEFA), accompanying notes, auditor's reports, summary schedule of prior audit findings, and, if applicable, the corrective action plan, all of which result from the audit (2 CFR 200.512(c)).

A well-prepared PBC list response significantly reduces follow-up requests.

An incomplete or late PBC list response is the most common reason a Single Audit runs long, costs more, or slips past its deadline. Every missing item becomes a follow-up request, every follow-up request becomes a delay, and delays put pressure on the submission deadline (the earlier of 30 days after you receive the auditor's compliance report or nine months after year-end, 2 CFR 200.512(a)(1)).

The opposite yields tangible results. When the PBC list responses are complete, reconciled, and organized before fieldwork begins, the auditor spends their time completing required testing rather than chasing your already busy team. In turn, the engagement is significantly shorter.

Your auditor's exact list will vary with the major programs being tested, but the categories below cover what almost every Single Audit requires. You can download our condensed Single Audit PBC Checklist to work from, and if you administer specific federal programs, our complete HUD & Federal Program PBC Request List breaks the requests down program by program.

• Trial balance and general ledger for the period under audit
• Finalized board or governing body minutes for the period under audit (or minutes since the prior audit through the current-year report date)
• Organizational chart and key personnel, including key finance personnel, compliance and program personnel, and, where they are a separate group, those charged with governance
• Accounting policies (or changes to policies since the prior audit), and process memos

• Draft financial statements with footnotes, if prepared by the organization
• Bank statements and bank reconciliations
• Reconciliations and supporting schedules for major accounts (receivables; payables; restricted cash; net assets; fixed asset additions, disposals, and depreciation; significant program income; significant program expenses)

The SEFA lists all of your federal programs, and the major program determination process uses it to decide which programs are tested, so it sits at the center of the PBC list (see What Is a Single Audit? A Guide for PHAs, HFAs, and Nonprofits for why completeness matters so much).

• The SEFA and its notes (2 CFR 200.510(b))
• A reconciliation of the SEFA to the general ledger
• Federal award agreements, Notices of Award, and any amendments
• Assistance Listing numbers for each federal program

• The award agreement with its terms and conditions
• Required program reports filed during the year

The auditor tests the compliance requirements that are direct and material to each major program. Depending on the program, the PBC list responses support requirements such as allowable costs or allowable activities, cash management, eligibility, period of performance, procurement and suspension and debarment, reporting, subrecipient monitoring, and special tests and provisions, among others.

• Invoices, purchase orders, and contracts for selected disbursements
• Cancelled checks or payment confirmations
• Payroll records and time-and-effort or payroll certifications for selected employees; support for the selected employees' pay rates; and the System and Organization Controls (SOC) report of the payroll company for the period under audit

• The prior-year reporting package
• The summary schedule of prior audit findings (2 CFR 200.511(b))
• If there were prior-year findings, evidence that they were resolved and that corrective actions sufficiently cleared the issues (2 CFR 200.511(c))

The organizations that respond to a PBC list in days rather than weeks tend to do four things:

1. Start from last year's list. Your prior-year PBC request is the best template for this year. Items repeat. Build this year's list from last year's PBC request plus the follow-up items the auditor asked for during the audit, so those are ready up front this time.
2. Maintain and ensure completeness of the SEFA throughout the year, not at year-end. A continuously maintained SEFA is the difference between a clean audit and a scramble.
3. Assign a clear owner to each PBC category so responsibility does not fall between your finance teams, compliance teams, and operations teams.
4. Reconcile before you submit. Tie the SEFA and your underlying schedules and support to your trial balance before providing your responses to the auditor, not during fieldwork.

A short process memo for each new federal award, written before the money is spent, makes the following year far easier because the documentation and controls are already in place. Building that discipline is exactly the kind of advisory work our firm helps with.

A complete, reconciled PBC list response is the difference between an audit you dread and one that is routine. If your Public Housing Authority, Housing Finance Agency, or nonprofit wants help building the processes that make the PBC list easy to produce annually, schedule a free consultation. We help organizations get audit-ready and stay that way.