Federal Issues

    Audits of Federal Funds (Single Audits) 

    Entities that receive federal funds including states, local governments, and not-for-profit organizations (NPOs), are subject to audit requirements commonly referred to as “single audits” under the Single Audit Act of 1984, as amended in 1996.  The Single Audit Act was enacted to standardize the requirements for auditing federal programs.  The Act provides that grantees are subject to one audit of all of their federal programs versus separate audits of each federal program, hence the term “single audit.”  The AICPA believes that single audits should be performed in a high-quality manner, using appropriate professional standards, and provides guidance to its members through its Governmental Audit Quality Center and through other means such as technical publications, guidance, educational courses, and conferences.

    Legislative Proposals

    112th Congress

    In November 2011, Representative James Lankford, an Oklahoma Republican, introduced the "Grant Reform and New Transparency Act" or GRANT Act, H.R. 3433.  While the primary purpose of the bill is to improve transparency in the grant application, award and reporting processes, it also calls for the Office of Management and Budget (OMB) to submit a plan for improving the single audit process.  Such a plan would have to include, among other things, a simplified single audit alternative for non-federal entities with expenditures for smaller federal awards. The legislation defines a "smaller Federal award" as $1 million or less. 

    Because the Single Audit Act currently bases its audit requirement on total federal awards expended of $500,000 or more, the AICPA is concerned that the bill’s language is inconsistent because it implies that an audit would only be required when there is one federal award greater than $1 million.  As a result, the AICPA has advocated that the bill be clarified that the simplified audit alternative be explored for recipients expending greater than $1 million in total federal awards.

    The bill was favorably reported to the full House by the Oversight and Government Reform Committee in May 2012.  The bill saw no further action in 2012.

    Earlier Legislative Proposals and Executive Branch Actions

    The federal funds provided to governments and NPOs subject to single audits have been significantly increased (by approximately $800 billion) due to the passage of the American Recovery and Reinvestment Act of 2009 (Recovery Act), which was intended to stimulate the economy and create jobs. 

    Representative Edolphus Towns, a New York Democrat,  introduced H.R. 2182 to require 0.5 percent of Recovery Act funds be allocated to conduct oversight to prevent waste, fraud and abuse.  The bill passed the House in May 2009. There was no action on the bill in the Senate, and it died with end of the 111th Congress.  It also has not been reintroduced in this Congress which began its term in January 2011.

    Additionally, President Obama issued Executive Order 13520 on Nov. 23, 2009, creating a working group of federal, state and local officials to recommend improvements that could be made to single audits, including determining whether such audits are effective in identifying improper payments and whether single audit requirements should be streamlined or eliminated where their value is minimal.  In March 2010, the Office of Management and Budget (OMB) issued government-wide guidance to the federal agencies (found at http://www.whitehouse.gov/sites/default/files/omb/assets/memoranda_2010/m10-13.pdf) on the implementation of the Executive Order. Under OMB’s guidance, which affects OMB Circular A-123, Management’s Responsibility for Internal Control, federal agencies with programs susceptible to significant improper payments are required to submit a quarterly report on any identified high-dollar overpayments to the agency’s Inspector General and the Council of Inspectors General on Integrity and Efficiency, and also make the report available to the public. Additionally, OMB continues to study the inter-relationship of single audits and the required federal agency reporting of improper payments and whether any changes are needed to single audit legislation or regulation as a result of its study.

    Copy of Legislation

    Copies of bills and all Congressional actions are available on the Library of Congress’s THOMAS website by bill number after first selecting "Try the Advanced Search" and then the correct Congress.

    AICPA Testimony

    October 25, 2007 AICPA Testimony before the Senate Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security (linked here and at Senate hearing of same day below).

    Links to Congressional Hearings

    November 19, 2009 House Oversight and Government Reform Committee hearing, Tracking the Money:  How Recovery Act Recipients Account for Their Use of Stimulus Dollars

    September 10, 2009 Senate Homeland Security and Governmental Affairs Hearing, Follow the Money: An Update on Stimulus Spending

    July 8, 2009 House Oversight and Government Reform Hearing, Tracking the Money:  Preventing Waste, Fraud and Abuse of Recovery Act Funding 

    October 25, 2007 Senate Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security Hearing, Single Audits:  Are They Helping to Safeguard Federal Funds

    Links to Other Documents

    November 20, 2009 Executive Order, Reducing Improper Payment and Eliminating Waste in Federal Programs

    March 13, 2009 Government Accountability Office Report, Single Audit: Opportunities Exist to Improve the Single Audit Process and Oversight

    June 2007 President's Council on Integrity and Efficiency and Executive Council on Integrity and Efficiency, Report on National Single Audit Sampling Project (report of results of Federal Single Audit Quality Study)

    Staff Contacts

    Diana Huntress Deem
    Director, Congressional and Political Affairs
    ddeem@aicpa.org
    202.434.9276

    Mary Foelster
    Director, Governmental Auditing and Accounting
    mfoelster@aicpa.org
    202.434.9259

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    Congressional and Political Affairs Advocacy

    Overview The AICPA monitors and advocates on legislative and other matters that affect the accounting profession. Working with state CPA societies and other professional organizations, the AICPA provides information to and educates federal, state and local policymakers regarding key issues.
    Published on October 20, 2014

    Preserving the Cash Basis Method of Accounting for CPA Firms

    Article The AICPA is opposed to certain provisions included in tax reform proposals that would limit the availability of the cash basis method of accounting.
    Published on September 29, 2014

    Cash Accounting Bipartisan Letter to the House of Representatives

    Legislative Letters
    Published on September 11, 2014

    Federal Legislative and Regulatory Issues

    Federal Law This page highlights the advocacy issues in which the Congressional & Political Affairs Team is advocating on behalf of the profession, and also those issues that the team has recently followed.
    Published on September 05, 2014

    Cash Accounting Senate Letter

    Legislative Letters
    Published on August 07, 2014

    XBRL

    Article Extensible Business Reporting Language (XBRL) used in financial and other reporting allows for easier access to more transparent information.  AICPA supports legislative proposals to utilize XBRL by companies, Federal agencies and recipients of Federal funds.
    Published on May 20, 2014

    Camp Letter On Cash Basis April 25, 2014

    Legislative Letters The American Institute of CPAs (AICPA) voices strong opposition to draft legislation that would limit the use of the cash method of accounting for pass-through entities and personal service corporations.
    Published on May 08, 2014

    Convergence of International and US Accounting Principles and IFRS

    Article International Financial Reporting Standards (IFRS) set by the International Accounting Standards Board (IASB) in London is a response to worldwide demand from regulators, investors, businesses, and auditing firms for a single set of high-quality, globally-accepted accounting standards.
    Published on April 17, 2014

    AICPA Letter to SEC on Proposed Regulation Crowdfunding

    Comment Letter AICPA comments on the SEC's proposed new Regulation Crowdfunding under the Securities Act of 1933 and the Securities Exchange Act of 1934 to implement the requirements of Title III of the JOBS Act as published in SEC File No. S7-09-13.
    Published on February 06, 2014

    Jan 2014 - AICPA Statement for the Record regarding Conferences and Travel

    Article AICPA provided a Statement for the Record to the Senate Homeland Security and Government Affairs Committee in  response  to the hearing held on January 14, 2014 entitled, "Examining Conference and Travel Spending Across the Federal Government."
    Published on January 28, 2014

    Cash Basis Letter to Senate Finance Committee from Associations-Jan7-2014

    Legislative Letters Cash Basis Letter to Senate Finance Committee dated Jaunary 7, 2014 from American Council of Engineering Companies, American Dental Association, American Farm Bureau Federation, American Institute of Architects, American Institute of CPAs and S Corporation Association.
    Published on January 22, 2014

    Municipal Advisors

    Issue Brief The AICPA generally supports the SEC’s proposed rules as a means to strengthen investor protections in the municipal securities market.  The AICPA is concerned, however, because the proposed rule would require that accountants performing customary and usual accounting services would be required to register as municipal advisors.
    Published on January 07, 2014

    ERISA Fiduciary Definition - Appraisers of Employee Stock Ownership Plans

    Article The AICPA believes that the U.S. DOL should implement rules that would require appraisers of ESOPs to meet minimum qualification requirements, including holding relevant credentials and training, and comply with applicable professional valuation standards.
    Published on December 30, 2013

    Take Action Legislation Affecting ESOP Appraisers

    Article The AICPA urges FVS section members to seek congressional support of legislation to fix DOL fiduciary proposal on ESOP appraisers S. 273/HR 2041.
    Published on September 18, 2013

    CPAs Count! Make Your Voice Heard on Capitol Hill.

    Overview The AICPA PAC is the profession’s political action committee. This describes frequently asked questions about the AICPA PAC.
    Published on July 30, 2013

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