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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 government as to the management and use of such funds by recipients such as states, cities, universities, non-profit organizations, and Indian Tribes. 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. 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 governments, and Indian tribal governments that receive and use federal financial assistance programs. 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. In 1990, OMB administratively extended the Single Audit process to non-profit organizations by issuing OMB Circular A-133, "Audits of Institutions of Higher Education and Other Non-Profit Organizations" which superseded OMB A-128. These new guides and provisions standardized the Single Audit in the United States to include all states, local governments, non-profit organizations, and institutions that receive federal funds from the US government. On December 26, 2013, OMB issued the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, which standardized compliance and audit requirements for government entities, non-profit organizations and institutions of higher education. These consolidated requirements are codified in Title 2 of the Code of Federal Regulations (CFR), part 200 with the single audit requirements in Subpart F of this section. The terms 2 CFR 200 and Uniform Guidance can be used interchangeably. 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 well as any particular provisions tied with the specific assistance. The Single Audit provides the Federal government with assurance that these recipients comply with such directives by having an independent external source (the CPA) report on such compliance. However, it only applies to state, local government, and nonprofit recipients that expend $750,000 or more of such assistance in one year. A Single Audit encompasses an examination of a recipient's financial records, financial statements, federal award transactions and expenditures, the general management of its operations, internal control systems, and federal assistance it received during the audit period (the time period of recipient operations examined in the Single Audit, which is usually covers a natural or fiscal year). The Single Audit is divided into two areas: Compliance and Financial. The compliance component of a Single Audit covers the study and understanding (planning stage) as well as the testing and evaluation (exam stage) of the recipient with respect to federal assistance usage, operations and compliance with laws and regulations. The financial component is exactly like a financial audit of a non-federal entity which includes the audit of the financial statements and accompanying notes. Depending on the recipient, the Single Audit can be simple and straightforward, or it could be complex and troublesome. This is because there are millions of federal grants awarded each year to thousands of recipients, each with its own independent way of operating. Therefore, the Single Audit differs from recipient to recipient and from federal program to program. 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. Compliance audit: Planning stage Low- or high-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: Single audits have been performed on an annual basis in prior years. The auditor's opinions on the financial statements and the Schedule of Federal Expenditures (discussed later) were unmodified. There are no material weaknesses identified. The auditor did not report a substantial doubt about the auditee's ability to continue as a going concern. None of the Federal programs had audit findings from any of the following in either of the preceding two audit periods in which they were classified as Type A programs: Internal control deficiencies that were identified as material weaknesses in the auditor's report on internal control for major programs; A modified opinion on a major program in the auditor's report on major programs; or Known or likely questioned costs that exceeded five percent of the total Federal awards expended for a Type A program during the audit period. The Uniform Guidance uses the high- and low-risk determination to regulate the dollar amoun.... Discover the Warren Ruppel popular books. 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