Does your Company need a Single Audit?

Does your Company need a Single Audit?

Businesses that spend Federal grant money for research and development or other purposes may be subject to a unique and comprehensive type of audit called a Single Audit. It is critical for these businesses to understand the consequences of their grant funding, manage their expenditures accordingly, and be prepared should a Single Audit become required.

The Single Audit Act of 1984, along with its amendments in 1996, established a standardized audit process for non-federal entities managing federal funds. A Single Audit is a comprehensive review of a non-federal entity’s financial statements and its expenditures of federal awards. This audit is crucial for ensuring accountability and transparency.

Conducted according to Generally Accepted Auditing Standards (GAAS) and the Uniform Guidance, the Single Audit includes two main components: the financial statements audit and the compliance audit.

Single Audits are essential for federal awarding officials, as they provide insights into internal controls, compliance, and the financial operations of entities receiving federal funds. They also streamline the audit process by covering multiple federal awards in one comprehensive audit, enhancing efficiency and reducing redundancy.

The Office of Management and Budget (OMB) sets the rules for Single Audits. Any non-federal entity that expends $750,000 or more in federal awards during a fiscal year is required to undergo a Single Audit. In April 2024, the Uniform Guidance was revised to increase this threshold to $1,000,000 for audits of periods beginning on or after October 1, 2024.

When the audit is complete, the business must submit the data collection form and reporting package to the Federal Audit Clearinghouse website. The deadline for the submission is nine months after the end of the audit period (i.e. September 30, 2025 for an audit of the year ended December 31, 2024).

The requirements and procedures for Single Audits can be quite complex, so please feel free to contact us with any questions that you may have.