A Single Audit is a comprehensive audit of an organization’s financial statements and its expenditures of Federal awards.
This type of audit is mandated by the Single Audit Act of 1984 and its amendments in 1996, which established a standardized audit process for organizations that receive and expend Federal funds to administer various grant programs and initiatives.
What is a Single Audit?
A Single Audit includes two key components:
- Audit of Financial Statements: This involves examining the organization’s financial statements to ensure that they are fairly presented in accordance with Generally Accepted Auditing Standards (GAAS) and Generally Accepted Government Auditing Standards (GAGAS).
- Audit of Compliance: This involves assessing the organization’s compliance with Federal program requirements. The audit report includes an opinion on whether the organization complied, in all material respects, with the types of compliance requirements that could have a direct and material effect on each of the major programs selected for the audit. The auditor accomplishes this through evaluation of the internal controls and testing the specific compliance requirements under Federal regulations.
The Single Audit requires the preparation and presentation of the Schedule of Expenditures of Federal Awards (SEFA) to accompany the financial statements. The SEFA contains a list of all Federal awards expended during the fiscal year. It is important to note that the SEFA is created based on expenditures of Federal awards, not by the grant revenue received during the fiscal year.
Federal awarding officials use Single Audits to administer and oversee Federal awards. These audits provide valuable information about the internal control structure, compliance, and financial operations of the organizations that have received Federal funds. The Single Audit and the information it provides helps to ensure accountability and ensures that Federal funds are used appropriately and in compliance with regulations. Further, the Single Audit reduces the need for multiple Federal award audits and combines those requirements into the Single Audit.
Organizations are required to submit the Single Audit reporting package, including the data collection form, within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the organization’s fiscal year.
When is a Single Audit required?
Currently, a Single Audit is required for any organization that expends $750,000 or more in Federal awards during the organization’s fiscal year. This threshold was increased to $1,000,000 for fiscal years beginning on or after October 1, 2024. Many organizations with fiscal years ending September 30, 2025, will be the first to experience the increased threshold for the Single Audit. The SEFA will be evaluated for completeness and accuracy to verify if the organization expended the required amount of Federal funds to trigger the Single Audit. The SEFA and audit must cover the entire operations of the organization or must include all departments, agencies, and other organizational units that expended or otherwise administered Federal awards during the audit period.
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