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Single Audit for Beginners: 10 FAQs

The single audit. This term may be unfamiliar to you if you are new to grants management, but the single audit is a necessary part of effective grants management for many federal grant recipients. Audits are important because they promote accountability. Here are 10 FAQs to help you better understand this important process.

10 Single Audit FAQs

1. What is a single audit?

Most simply put, it is a review of the way in which your organization has managed a grant to make sure that you are in compliance with all the rules and regulations of each grant award. Required components of an audit include such things as financial statements and records, expenditures, and internal controls.

2. Why is it called a “single” audit?

Before 1984, each federal grantmaking agency was required to carry out its own audit.  The Single Audit Act of 1984 standardized audits for states, local and tribal governments. However, because each grant has its own unique requirements, no two audits are exactly the same. Think of it as a car maintenance check. The mechanic might have the same procedure to check the all the parts under the hood, but what services are performed will vary according to your car’s own individual specifications.

3. Which government office is responsible for setting the rules and regulations for federal audits?

The Office of Management and Budgetsets rules and regulations. The audits themselves are conducted by independent private accounting firms hired by auditees, like Native American tribes, state and local governments.

4. Have their been other major changes to federal audits since 1984?

Yes. 2 CFR 200, also known as the Uniform Guidance, which went into effect December 26, 2014, was meant to simplify federal rules and regulations regarding grant management and make everything more efficient. You may still run across the terms Circular A-133 or OMB A-133 audit. Those were the old guidelines which the Uniform Guidance replaced

5. Do all recipients of federal grants get audited?

There are different routes to an audit. One test is to see the entity requires a risk assessment.  Grantees who expended more than $750,000 in federal dollars in any one year are considered Type A program and will need a risk assessment to see if an audit is required. If they are under the $750,000 threshold they are considered Type B programs. Although there are circumstances where Type B programs do get audited, they do not automatically need a risk assessment.

6. What is a risk assessment? 

A risk assessment in the next stage in considering who will be audited. A determination is made to put an entity in either a high or low risk category. An entity is high risk if they have not been audited as a major program in the last two years and what the findings of their previous audits were.

7. Do only high risk Type A programs get audited?

No. Any federal grant recipient has the potential to be audited. It is also important to remember that Single Audits pertains to the federal audit requirements in Uniform Guidance.  The individual grantmaking agency may also request audits on grantees, specific awards or programs.

8. What other considerations beside financial elements do the auditors consider?

There are two types of things auditors look at. The financial part, to see if your books are in order. The second is the programmatic part – how well your program is meeting its goals and objectives.

9. Are the results of the audits made public? 

Yes. The exceptio is Native American tribes who are not required to make the audit report public, although the data collection phase will still be publicly available.

10. What are some consequences of an unsuccessful audit?

There are many negative consequences that may result from an audit with a high number of violations. They range from the grantee having to pay back disallowed costs to suspension of the grant altogether. An entity may also end up in the high-risk category, which increases the risk of additional audits. It may even impact the organization’s ability to win future awards. As “The Federal Grant Insider”  Lucy Morgan puts it, “the future of grants funding will increasingly go to organizations with clean audits.”


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