Navigating the Single Audit in the Era of COVID-19

Ensuring your agency is prepared for the single audit is more important than ever, especially with the Coronavirus Relief Fund and many other grants awarded during this time that emphasizes transparency, performance and accountability.

In this article, we’ll cover the top single audit FAQs that grants professionals encounter and the primary objectives to keep in mind when navigating the single audit during COVID-19.

The Top Single Audit FAQs

What is the single audit?

According to Uniform Guidance 2 CFR.501(b), a non-federal entity that expends $750,000 or more during the entity’s fiscal year in federal awards must have a single audit conducted in accordance with 200.514. The only exception is when the entity elects to have a program-specific audit conducted in accordance with paragraph C of this section.

Why is it called a single audit?

Prior to 1984, each federal grant-making agency was required to perform its own audit. The Single Audit Act of 1984 standardized audits for state, local and tribal governments.

Who’s responsible for setting rules and regulations for federal audits?

The Office of Management and Budget (OMB) sets rules and regulations regarding how to conduct an audit and assist the Executive Office in meeting policy, budget, management and regulatory objectives to fulfill the agency’s statutory responsibilities. Most grant recipients (auditees) will hire independent private accounting firms to conduct the audit.

What has changed since the Single Audit Act?

• In 2013, Uniform Guidance was issued, which replaced eight circulars, including A-133.
• In 2015, grant recipients who expended over $750,000 in federal funding were required to have a single audit.
• As of 2020, the COVID-19 Executive Memorandum M-20-26 extends submission of the single audit up to six months.

Do all recipients of federal grants get audited? 

The short answer is no. If you expend more than $750,000 in fiscal year, you must have an audit on all federal awards. If you only expend from one federal award in that fiscal year, you can opt to have a program-specific audit.

What is a risk assessment?

A risk assessment is 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 considered high risk if they have not been audited as a major program in the last two years. An agency’s level of risk can also depend on the findings of previous audits.

The Objectives of a Single Audit

Now that we’ve tackled some of the most commonly asked questions surrounding the single audit, let’s review the primary objectives of the single audit so you know what to expect as you navigate your grant projects. First and foremost, it’s important to remember that communication is critical to ensuring success and minimizing the risk of audit findings.

The objectives of the single audit can be broken down into two components: The auditor’s responsibilities versus the auditee’s responsibilities.

Auditor’s Responsibilities  

• Ensure financial statements are fairly presented
• Review Schedule of Expenditures of Federal Awards (SEFA)
• Understand internal controls and test for compliance
• Follow up on prior audit findings
• Report any new findings and address compliance of prior findings

Auditee’s Responsibilities

• Arrange a single audit as stated in 2 CFR 200.509
• Prepare financial statements
• Prepare Schedule of Expenditures of Federal Awards (SEFA)
• Ensure auditor has access to needed information
• Prepare a corrective action plan and summary of prior findings
• Take corrective action on new findings according to plan

While the single audit can sound intimidating, knowing what to expect and leaning heavily on Uniform Guidance can help governments keep grant projects in compliance while maintaining accountability and transparency.

As Chief Customer Officer for eCivis, Merril Oliver leads the company’s key business strategies, product development and growth initiatives. Having served four governors, both Democratic and Republican, Merril served as the Director of the Maryland Governor’s Grants Office, where she revolutionized an enterprise approach to full lifecycle grants management during 2015-2017. Merril is a past president of the National Grants Management Association (NGMA), having served three consecutive terms (2009-2012). During her presidency, Merril launched the industry-recognized standard professional certification of Certified Grants Management Specialist (CGMS®) and participated on the credentialing exam development team as a Subject Matter Expert (SME).