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

    Mary Foelster
    Director, Governmental Auditing and Accounting

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    AICPA Comment Letter to DOL Regarding Proposed Overtime Rule

    Comment Letter Comments in response to the DOL July 6, 2015 Notice of Proposed Rulemaking to amend the FLSA exemptions from minimum wage and overtime requirements for executive, administrative, professional, outside sales, and computer employees.
    Published on September 24, 2015

    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 August 03, 2015

    Innovation Act Support Letter - US House

    Legislative Letters Letter sent by Barry Melancon to Members of the U.S. House of Representatives in support of HR 9, the Innovation Act.
    Published on July 16, 2015

    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 June 03, 2015

    Audits of FHA-Approved Participants and Related HUD Requirements

    Article FHA proposes new rule to strengthen risk management and shift accountability for the underwriting of FHA-insured loans to the mortgage banks. It may no longer require FHA to approve loan correspondents (mortgage brokers) participating in the FHA program and HUD would no longer require FHA to submit audited financial statements or audits
    Published on June 03, 2015

    Accounting Partnership Retirement Practices

    Article In recent years, Equal Employment Opportunity Commission (EEOC) staff have been investigating and considering litigation against accounting firms organized as partnerships with a goal of requiring firm partners to be treated as “employees” for purposes of the Age Discrimination in Employment Act (ADEA). The AICPA has written the EEOC asking
    Published on June 02, 2015


    Overview 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 June 02, 2015

    Preserving the Cash Basis Method of Accounting for CPA Firms

    Overview 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 June 02, 2015

    H.R. 1, Tax Reform Act of 2014

    Article Legislative text of Chairman Camp's tax reform act of 2014.
    Published on June 02, 2015

    Interstate Taxation/Mobile Workforce Bill

    Article The AICPA is supporting legislation that would reduce the tax burden and compliance requirements related to nonresident state income tax withholding laws.
    Published on May 13, 2015

    Section 404(b) of Sarbanes-Oxley Act of 2002

    Article The Sarbanes Oxley Act requires that the management of public companies assess the effectiveness of the internal control of issuers for financial reporting.  Section 404(b) requires a publicly-held company’s auditor to attest to, and report on, management’s assessment of its internal controls. AICPA believes that all investors in public companies
    Published on May 13, 2015

    Dodd-Frank Whistleblower Rules

    Article Dodd-Frank Act Sections 922 and 748 require the Securities and Exchange Commission and Commodities Futures Trading Commission to implement rules to pay cash awards of up to 30% in settlements over $1 million to whistleblowers who voluntarily provide original information about violations of the Securities laws and Commodity Exchange Act,
    Published on May 13, 2015

    FASB Independence and Fair Value Accounting

    Article The AICPA strongly and unequivocally supports independence of the U.S. and international accounting standard setting bodies, the Financial Accounting Standards Board (FASB) in Norwalk, Connecticut, and the International Accounting Standards Board (IASB) in London.
    Published on May 01, 2015

    March 15, 2015 AICPA Letter to Senate Finance Committee Business Income Tax Reform Working Group

    Legislative Letters March 15, 2015 AICPA Letter to Senate Finance Committee Business Income Tax Reform Working Group
    Published on April 22, 2015

    Coalition Letter to SFC Business Tax Reform Working Group

    Legislative Letters In April 2015, the AICPA joined a coalition including the American Council of Engineering Companies, American Farm Bureau Federation, American Institute of Architects, American for Tax Reform, Farmers for Tax Fairness, Investment Adviser Association, and multiple law firms and bar associations in writing a letter to the Senate Finance Committee’s
    Published on April 15, 2015

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