The City of Valley Ridge government has not been determined to be low risk. It has four programs, two Type A and two Type B as follow: Type A:
Housing and Urban Development (HUD), $800,000 was audited last year with no major control or compliance findings

Environmental Protection Agency (EPA), $750,000 was audited three years ago with no major control or compliance findings

Type B:
Department of Education, $350,000
Department of Energy, $1,750,000
The total amount of grant expenditures is $1,800,000.
Which of the following statements are correct?
1. At least $900,000 must be audited as major programs.
2. A risk assessment must be performed on the Dept. of Energy.
3. The Dept. of Education must be selected for audit.
4. The EPA must be selected for audit.