NEW YORK--(BUSINESS WIRE)--Thousands of state and local governmental agencies, nonprofits and businesses that received funding from federal pandemic relief programs are subject to audits that focus on their compliance with laws and regulations governing that money. It’s essential that leaders of such organizations understand their responsibilities for a quality audit and engage CPAs who have the appropriate specialized knowledge and experience to perform these services.
To help demystify the process, AICPA & CIMA are offering several resources to help organizations subject to “single audits” or similar compliance engagements, including a list of tips, an on-demand webinar and a primer on procuring audit services.
Single audits, performed under Office of Management and Budget Uniform Guidance regulations, are critical because they provide reasonable assurance to the federal government and the public that the organization complied with federal requirements subject to the audit.
Single audits are generally required when organizations spend $750,000 or more of federal funds in a given fiscal year. Before the pandemic, some 34,000 to 38,000 single audit engagements were performed each year, but the trillions of dollars authorized for COVID relief funding are expected to significantly increase that number. For example, the $350 billion Coronavirus State and Local Fiscal Recovery Fund program was provided to thousands of small units of local government, many of which may be inexperienced in managing federal funding and preparing for a single audit.
“We know demand for single audits and other similar types of compliance audits has risen dramatically due to the historic amounts of federal pandemic relief funding provided in response to the health and financial crises of the last several years,” said Mary Foelster, CPA, CGMA, senior director of governmental auditing and accounting for AICPA & CIMA, which together form the Association of International Certified Professional Accountants. “Many of the organizations receiving this funding have never gone through a single audit before, so we’re providing resources to help their leaders understand the process, perform their fiduciary duty and take steps to find the right firm to conduct a quality audit.”
Among the basic steps organizations should take if they’re required to undergo a single audit:
- Make sure your auditor is qualified to perform engagements of this kind. Check that they have appropriate qualifications, sufficient staff with strong technical abilities and experience auditing organizations like yours. They should also be in good standing with the AICPA’s peer review program.
- Pull together information your auditor will need. Meet with your auditor before your fiscal year-end. Identify and address problem areas in advance. Prepare a schedule of expenditures of federal awards that is complete and accurate. Provide the auditor with access to personnel, accounts, books, records, supporting documentation and other information, as needed.
- Perform any necessary steps once the single audit is complete. Take corrective action on audit findings promptly. Prepare your portion of the data collection form and ensure your organization submits its audit and reporting package on time.
More detailed information for organizations is available through the AICPA Governmental Audit Quality Center. Resources include:
- An explainer on “Selecting an Auditor”
- A brochure on “Tips for Organizations Subject to Single Audit Requirements”
- A checklist on getting ready for a single audit
- An on-demand webcast: “Preparing for Your First Single Audit”
- A FAQ on single audits
These resources and others are free and available to the public. To access them, users must register for an online AICPA account, which anyone can establish. To learn more, please visit aicpa.org/gaqc.
About the Association of International Certified Professional Accountants, and AICPA & CIMA
The Association of International Certified Professional Accountants (the Association), representing AICPA & CIMA, advances the global accounting and finance profession through its work on behalf of 689,000 AICPA and CIMA members, students and engaged professionals in 196 countries and territories. Together, we are the worldwide leader on public and management accounting issues through advocacy, support for the CPA license and specialized credentials, professional education and thought leadership. We build trust by empowering our members and engaged professionals with the knowledge and opportunities to be leaders in broadening prosperity for a more inclusive, sustainable and resilient future.
The American Institute of CPAs (AICPA), the world’s largest member association representing the CPA profession, sets ethical standards for its members and U.S. auditing standards for private companies, not-for-profit organizations, and federal, state and local governments. It also develops and grades the Uniform CPA Examination and builds the pipeline of future talent for the public accounting profession.
The Chartered Institute of Management Accountants (CIMA) is the world’s leading and largest professional body of management accountants. CIMA works closely with employers and sponsors leading-edge research, constantly updating its professional qualification and professional experience requirements to ensure it remains the employer’s choice when recruiting financially trained business leaders.
