Single Audit – Uniform Guidance

A single audit is a term used in reference to an entity-wide audit consisting of two main parts: an audit of the basic financial statements under Government Auditing Standards and an audit of the entity’s major federal award
programs. The audit of the major programs includes (a) gaining an understanding of and testing the internal controls and (b) testing compliance with compliance requirements over the programs. In accordance with the concept, one auditor integrates the various programs’ internal control and compliance auditing requirements with an audit of the entity’s basic financial statements.

In December 2014, the Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called "Uniform Guidance") was officially implemented by the Council on Financial Assistance Reform (COFAR). The Uniform Guidance – a "government-wide framework for grants management" – synthesizes and supersedes guidance from earlier OMB circulars.

The reforms that comprise the Uniform Guidance aim to reduce the administrative burden on award recipients and, at the same time, guard against the risk of waste and misuse of Federal funds. Among other things, the OMB's Uniform Guidance does the following:

  • Removes previous guidance that is conflicting and establishes standard language
  • Directs the focus of audits on areas that have been identified as at risk for waste, fraud and abuse
  • Lays the groundwork for Federal agencies to standardize the processing of data
  • Clarifies and updates cost reporting guidelines for award recipients

However, not all state and local governments and nonprofit organizations that receive federal awards are subject to the single audit requirements under the Uniform Guidance. Organizations that expend less than $750,000 in federal awards during a year are exempt from the requirement for that year.

Government Auditing Standards  

As a partial response to the multitude of program audit guides, the U.S. General Accounting Office (GAO) issued the Government Accounting Standards in an attempt to bring uniformity to audits of governmental organizations, programs, activities, and certain entities (including nonprofit organizations) receiving government assistance. These standards relate to scope and quality of audit efforts and to the characteristics of a professional and meaningful audit report. They address the concerns of public officials, legislators, and the general public about whether governmental funds are handled properly and in compliance with existing laws and whether governmental programs are being conducted efficiently, effectively, and economically.

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