When do Single Audits happen?
Single audits occur when a non-federal entity expends $750,000 or more in federal funds during its fiscal year. The audit is mandatory and is usually conducted annually. The purpose of a single audit is to determine if the entity complied with federal regulations, specifically concerning how it spent federal funds, and whether there are any instances of fraud or abuse in the reporting of these federal funds. Additionally, the auditor assesses the entity’s internal controls and compliance with federal program requirements. The single audit aims to ensure that federal funds are used appropriately and effectively.
When going through a single audit, you need to have financial statements, records, and documentation related to your organization’s federal award programs, including information on expenditures, compliance with regulations, and performance measures. You should also be prepared to provide detailed descriptions of your organization’s internal controls and processes. Other important documents may include grant agreements, contracts, and sub-recipient agreements. Additionally, you should have access to staff and key personnel who can answer questions and provide information as needed throughout the audit process.
A CPA can help with a Single Audit Act by providing the necessary expertise to ensure compliance with federal regulations, reviewing financial statements and records, assessing internal controls, conducting testing to identify potential issues, and providing recommendations to improve systems and processes. They can also help in preparing the Schedule of Expenditures of Federal Awards (SEFA) and completing the Single Audit Reporting Package. Their assistance can prevent costly mistakes and penalties while giving assurance that funds are being properly managed and used for their intended purposes.
