In my accounting career, I’ve come across a few clients who truly put my skills to the test. I’m about to describe one for whom I performed a Section 1603 Grant Program certification for specified energy property. It’s safe to say that this client needed my services at least as much as I needed to provide services to his company.
In the Summer of 2011, the Director of a Solar Energy installer in Phoenix, AZ, sent me an e-mail expressing interest in my services concerning the preparation of an Agreed-Upon Procedures (AUP) report for a grant application. He had completed a 500kW Photovoltaic system (PV), involving the installation of solar panels, for a commercial client in New Jersey, and was applying for a U.S. Treasury grant for less than $1 million on the client’s behalf. The eligible cost basis was more than $500,000.
According to the Treasury Department’s 1603 program website, an Agreed-Upon Procedures report was required for that kind of project. It’s a type of attest engagement. For this project, my responsibility was to perform certain required procedures in order to determine whether the project’s eligible cost basis as entered in the accounting records was in accordance with the cost basis for Federal Income Tax purposes.
The alternative form of certification was an examination, which was required if an applicant requested a grant of $1 million or more. An examination involved more extensive
evidence-gathering procedures than an AUP engagement (see the brief list of AU procedures below), and could include testing of the client’s accounting system and receiving confirmations from third parties. The accountant’s opinion on compliance with the Federal income tax cost basis was required in the examination report.