The federal government passed the Single Audit
Single Audit
In the United States, the Single Audit, Subpart F of the OMB Uniform Guidance, is a rigorous, organization-wide audit or examination of an entity that expends $750,000 or more of federal assistance received for its operations. Usually performed annually, the Single Audit's objective is to provide assurance to the US federal government as to the management and use of such funds by recipients such as states…
Who needs a single audit?
What is a single audit? A nonprofit or governmental organization with federal expenditures in excess of $750,000 is required by law to have a single audit performed, which includes an audit of both the financial statements and the federal awards.
When is single audit required?
When is a single audit required? A single audit is required if a non-federal entity (e.g., not-for-profit organization, state and local government, tribe or institution for higher education) spends greater than $750,000 of federal funds in a fiscal year. In certain circumstances, a program-specific audit can be approved by a funder.
What is a 133 audit?
The objective for an A-133 audit is that the auditor must audit all high risk Type A programs. The auditor then has an option how to proceed for Type B programs. The auditor may choose to audit these programs: At least one-half of the high risk type B programs up to the number of low risk type A programs
What is a federal Single Audit?
Single Audit, previously known as the OMB Circular A-133 audit, is an organization-wide financial statement and federal awards’ audit of a non-federal entity that expends $750,000 or more in federal funds in one year.It is intended to provide assurance to the Federal Government that a non-federal entity has adequate internal controls in place, and is generally in compliance with program ...
What is the purpose of the Single Audit Act?
The Single Audit Act Amendments of 1996 (Single Audit Act) were enacted to streamline and improve the effectiveness of audits of federal awards expended by states, local governments, and not-for-profit entities (referred to as non-federal entities), as well as to reduce audit burden.
What is the Single Audit Act of 1984?
In 1984, Congress passed the Single Audit Act, which required most governmental recipients of federal assistance (e.g., state and local governments) to have organization-wide financial and compliance audits on an annual basis.
Who is subject to Single Audit Act?
A federal single audit is required when you spend more than $750,000 of federal funds in one year, regardless of whether those federally-sourced funds came directly from the federal government or were passed through from a state or local government.
What is a Single Audit and why does it matter?
The single audit reviews how you managed the grant and ensures you followed the rules for dollars associated with the grant or award. A single audit is often referred to as a Uniform Guidance Single Audit.
Why is it called a Single Audit?
A Single Audit is when a professional auditor goes over a grantee's financial management processes, including its financial management system and its compliance with all of its federal grant requirements. It is called a Single Audit because it combines one audit covering all of a grantee's federal grants.
What are the four main types of reports required of a Single Audit?
There are four types of audit reports: and unqualified opinion, a qualified opinion, and adverse opinion, and a disclaimer of opinion. An unqualified or "clean" opinion is the best type of report a business can get.
How do I know if I need a Single Audit?
What triggers the requirement for a Single Audit? Any non-federal entity that expends more than $750,000 in federal award funds during its fiscal year is required to obtain a Single Audit (or Program-specific Audit, if applicable.)
Does a PPP loan trigger a Single Audit?
Loans obtained under the Paycheck Protection Program (PPP) are not subject to a Single Audit.
Who governs single audits?
The Single Audit Act of 1984 required the Director of the Office of Management and Budget (OMB) to prescribe policies, proce- dures, and guidelines to implement the Act. OMB Circular A–128, ''Audits of State and Local Governments,'' (Circular A–128) pro- vides this guidance.
What happens if you fail a Single Audit?
Failure to meet the single audit requirements could result in your entity having to repay grant monies and/or losing access to future Federal funding.
How long does a Single Audit take?
Audits are typically scheduled for three months from beginning to end, which includes four weeks of planning, four weeks of fieldwork and four weeks of compiling the audit report. The auditors are generally working on multiple projects in addition to your audit.
How do I prepare for a Single Audit?
Your organization should follow four steps to help navigate the single audit process:Gather every document and communication pertaining to each source of government funding. ... Review government websites and publications. ... Gather and update internal control documentation. ... Review how funds were used.
What were the expected benefits of the Single Audit in 1984?
From its initial legislation in 1984, the single audit has consistently emphasized two primary objectives: (1) increase grantee accountability, and (2) decrease administrative burden for grantees.
What is the difference between an audit and a Single Audit?
The Details The difference from your normal financial statement audit is that the Single Audit will go a step further to assure that the programs are complying with any government regulations that apply to that specific funding.
What triggers an A 133 audit?
Only non-Federal entities that expend $500,000 or more of Federal awards in a year are required to obtain an annual audit in accordance with the Single Audit Act Amendments of 1996, as amended, Office of Management and Budget (OMB) Circular A-133, "Audits of States, Local Governments and Non-Profit Organizations," the ...
Which of the following is an auditor's responsibility in an audit subject to the Single Audit Act of 1984?
Auditors must provide a summary of the results of their work concerning the audited entity's financial statement, internal controls, and compliance with laws and regulations. Auditors must prepare and sign a data-collection form that is submitted to the federal clearinghouse rather than submitting the full audit report.
What is a single audit?
Single Audit, previously known as the OMB Circular A-133 audit, is an organization-wide financial statement and federal awards’ audit of a non-federal entity that expends $750,000 or more in federal funds in one year.
What is a non-federal entity?
Non-federal entities typically include states, local governments, Indian tribes, universities, and non-profit organizations.
How does the single audit determination affect the entire single audit?
This determination affects the entire Single Audit because the auditor adjusts the scope of the audit accordingly. Since the auditor must provide an opinion to the federal government on whether the recipient and its programs complied with laws and regulations, the auditor performs sufficient procedures to confirm the opinion is correct.
Who performs a single audit?
The audit is typically performed by an independent certified public accountant (CPA) and encompasses both financial and compliance components. The Single Audits must be submitted to the Federal Audit Clearinghouse along with a data collection form, Form SF-SAC.
What is the second stage of a federal audit?
For these reasons, the federal government requires auditors to perform the compliance audit of a recipient with a planning stage and an exam stage. During the first stage, or planning stage, the auditor must study the recipient, determine whether there is a high or low risk that the recipient does not comply with laws and regulations, identify federal programs, and evaluate such programs. The second stage, or exam or audit stage, is where the auditor actually audits the federal assistance and programs. The planning stage is considered an integral part of the Single Audit because it allows the auditor to design and perform the audit based on the qualities, characteristics and needs of the recipient to be audited.
What is the difference between a high risk and a low risk auditee?
Before determining which federal programs to examine, the auditor must first determine, based on specific criteria, whether the recipient is a high-risk auditee or a low-risk auditee. A high-risk auditee is a recipient which has a high risk of not complying with federal laws and regulations, while a low-risk auditee is the exact opposite. The Uniform Guidance has set certain requirements a recipient must meet to be considered a low-risk auditee. This includes the following to be evaluated for each of the preceding two audit periods:
How much of the federal assistance is audited in a year?
For high-risk auditees, the auditor is required to audit not less than 40% of all the federal assistance received during the year.
How to determine which federal programs to audit under the compliance audit?
Step 1: Type A or Type B. To determine which federal programs to audit under the compliance audit, federal assistance expended by the recipient (also called federal expenditures) during one year is identified by federal program name, Federal agency and CFDA number.
What is OMB Circular A-128?
In 1985, the United States Office of Management and Budget (OMB) issued OMB Circular A-128, "Audits of State and Local Governments," to help recipients and auditors implement the new Single Audit.
When is a single audit required?
A single audit is required if a non-federal entity (e.g., not-for-profit organization, state and local government, tribe or institution for higher education) spends greater than $750,000 of federal funds in a fiscal year.
Can a program specific audit be approved by a funder?
In certain circumstances, a program-specific audit can be approved by a funder. It does not matter if the organization receives the funds directly or indirectly; each year the organization is required to add all federal dollars spent when calculating the $750,000.
Is an audit like a root canal?
Honestly, if you feel an audit is like going to the dentist, a single audit is like getting a root canal. Whether or not you knew it at the time, when you accepted money from the federal government, you agreed to follow several rules around how the money was tracked, spent and reported. And your auditor is going to be required to double and triple check that you adhered to all of these rules and have placed additional processes in place to ensure compliance with these rules.
Does Wipfli audit?
If you do need to obtain a single audit, Wipfli can help. Click here to learn about our audit services.
What is the single audit act?
The Single Audit Act, as amended, establishes requirements for audits of States, local governments, Indian tribes, institutions of higher education (public or private nonprofit colleges and universities), and nonprofit organizations that expend a certain amount in Federal awards during its fiscal year (currently set at $750,000).
When are audits required for 2019?
Auditors are required to perform the audit using the August 2019 edition for reports that are dated after October 31, 2019) FSA Electronic Announcement: Single Audit Submission Requirements for Fiscal Years Ending Within Calendar Year 2019 and Future Fiscal Years.
What is the compliance supplement?
The Compliance Supplement is based on the requirements of the 1996 Single Audit Act Amendments and 2 CFR part 200, subpart F, which provide for the issuance of a compliance supplement to assist auditors in performing the required audits.
Can audits use 2018 and 2017?
2018 Compliance Supplement (Note: Auditors must use the 2018 supplement and the 2017 supplement together. See the subsection titled “Purpose” within Part 1 for further explanation).
What is the single audit act?
All Federal agencies are required to perform audit on their recipients. This became a burden and it was decided that a single audit can be completed for all recipients to be used by all Federal agencies. In 1984 OMB Circular A-128 implemented the Single Audit Act for States, local governments and Indian Tribes. In 1990 OMB Circular A-133 was issued where the Single Audit Act was expanded to cover non-profit organizations including Institutes of Higher Education (IHEs) who received over a dollar threshold.
What is SEFA report?
Recipient entity must prepare a SEFA which lists all Awards (direct & flow-through) by their Catalog of Federal Domestic Assistance (CFDA) number. This information is used by auditors to select specific awards or programs to audit; typically selected high risk programs are audited. The SEFA report also becomes part of the annual UW financial statement.
Overview
In the United States, the Single Audit, Subpart F of the OMB Uniform Guidance, is a rigorous, organization-wide audit or examination of an entity that expends $750,000 or more of federal assistance (commonly known as federal funds, federal grants, or federal awards) received for its operations. Usually performed annually, the Single Audit's objective is to provide assurance to the US federal g…
History
Before implementing the Single Audit, the federal government relied on numerous audits carried out on individual federally funded programs to ensure these funds were spent properly. Because the government had numerous agencies awarding hundreds of different programs, the task of auditing all programs became increasingly difficult and time-consuming. To improve this situation, the Single Audit Act of 1984 standardized audit requirements for States, local governm…
Purpose and components
The federal government provides an extensive array of federal assistance to recipients reaching over $400 billion annually. This assistance is provided through thousands of individual grants and awards annually for the purpose of benefiting the general public in the areas of education, health, public safety, welfare, and public works, among others. However, as a condition of receiving this assistance recipients must comply with applicable federal and state laws and regulations, as wel…
Compliance audit: Planning stage
Before determining which federal programs to examine, the auditor must first determine, based on specific criteria, whether the recipient is a high-risk auditee or a low-risk auditee. A high-risk auditee is a recipient which has a high risk of not complying with federal laws and regulations, while a low-risk auditee is the exact opposite. The Uniform Guidance has set certain requirements a recipient must meet to be considered a low-risk auditee. This includes the following to be eval…
Compliance audit: exam stage
After the auditor determines which federal programs to audit, the auditor performs a compliance audit that scrutinizes operations of the program—examining files, documents, contracts, checks, etc. The auditor investigates, to some degree, transactions between the federal program and other parties. These functions are compared with the laws and regulations applicable to a program to see if they complied or not. The examination does not require observing every singl…
Financial audit
The Single Audit requires that a recipient prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The Single Audit also requires that a financial audit be performed on the recipient that includes the federal assistance operations as well as the non-federal assistance operations. Tests of transactions and account balances are performed to ensure that the inform…
Data Collection Form and Reporting Package
After the Single Audit is concluded, the recipient prepares two documents: a "Data Collection Form" and a "Reporting Package". The data collection form, Form SF-SAC, is a standard form which is basically a summary of the Single Audit. It includes details of the auditor, a list of the federal programs audited, and a summary of any audit findings reported by the auditor. The Reporting Package includes all the auditor's final reports along with the recipient's financial stat…
Auditor responsibility
The auditor is responsible for conducting the actual audit of the recipient in accordance with Generally Accepted Government Auditing Standards (GAGAS) and using the guidance provided by the OMB Circular A-133 and its Compliance Supplement, all of which establish certain rules to follow during the Single Audit. The auditor must establish audit objectives that determine whether the recipient complied with laws and regulations. They must research the recipient's federal assi…
What Is The Difference Between An Audit and A Single Audit?
- Honestly, if you feel an audit is like going to the dentist, a single audit is like getting a root canal. Whether or not you knew it at the time, when you accepted money from the federal government, you agreed to follow several rules around how the money was tracked, spent and reported. And your auditor is going to be required to double and triple check that you adhered to all of these rul…
When Is A Single Audit Required?
- A single audit is required if a non-federal entity (e.g., not-for-profit organization, state and local government, tribe or institution for higher education) spends greater than $750,000 of federal funds in a fiscal year. In certain circumstances, a program-specific audit can be approved by a funder. It does not matter if the organization receives ...
Need Assistance with A Single Audit?
- In 2020 we saw an increase in federal non-cash assistance in the form of PPE and food being donated to foodbanks. If you are struggling to figure out whether a funding stream is considered federal, we recommend that you look through the contract/grant agreement and look for references to 2 CFR 200 or a CFDA number, which is a 5 digit number in the form of xx.xxx. If yo…