History
All federal agencies are required to perform audit on their recipients. If a recipient received funds from different federal agencies, it would undergo several audits conducted by those agencies. This became a burden and it was decided that recipients are subject to one audit of all their federal programs versus separate audits of each federal program, hence the term “single audit”.
Requirements
A single audit must be conducted on recipients who expended $750,000 or more of federal funds in the recipient’s fiscal year.
Audits must be performed in accordance with GAGAS (generally accepted governmental auditing standards) by an independent CPA and must be filed electronically with the Federal Audit Clearinghouse each year.
Scope of Audit
A single audit includes examination of the followings:
– Financial statements: The auditor must determine whether the financial statements of the auditee are presented fairly in all material respects in accordance with generally accepted accounting principles.
– Schedule of Expenditure on Federal Awards: The audit must determine whether the schedule is fairly stated.
– Internal control: The auditor must examine and determine whether the auditee’s internal controls over federal programs are sufficient and effective.
– Compliance: The auditor must determine whether the auditee has complied with federal regulations and terms and conditions of federal awards.
State funds
If recipients receive state funds, not federal funds, several states require a state single audit on the recipients. The state single audit requirements and audit scope are usually identical to the federal single audit mentioned above. The recipients should look at the grant documents to understand their responsibilities for the audit.
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