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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Department of Labor Overtime Rule

Article The Department of Labor (DOL) announced its final rule related to overtime pay. Under the new rule, the standard salary threshold will double from $455 per week to $913 per week. This amounts to a change in an annual salary from $23,660 to an annual salary of $47,476. Further, the
Published on June 13, 2017

AICPA Financial CHOICE Act Letter May 1, 2017

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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.
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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.
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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 November 07, 2016

AICPA Letter to Chairman Brady May 20, 2016

Legislative Letters AICPA sent a letter to the House Ways and Means hearing entitle "Perspectives on the Need for Tax Reform." The letter encourages the committee not restrict the use of the cash basis method of accounting for pass-through entities.
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AICPA Letter of Support H.R. 5813, Overtime Reform and Enhancement Act (OREA) August 18, 2016

Legislative Letters AICPA supports the efforts of Rep. Kurt Schrader to reduce the burden of the Department of Labor overtime rule with H.R. 5813, OREA, which will remove the automatic threshold update and create a gradual onramp to implementation of the current threshold level.
Published on September 19, 2016

AICPA Letter of Support H. Con. Res. 140

Legislative Letters AICPA letter supporting Rep. Renacci legislation related to the federal financial statements, H. Con. Res. 140 on 9.6.16
Published on September 07, 2016

IFRS - GAAP Convergence

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 August 19, 2016

Tax Legislation and Policy

Article The Congressional and Political Affairs Team often assists the Tax Team with tax legislation and policy issues, and advocates about them to Members of Congress and other key policymakers on behalf of the profession.
Published on August 12, 2016

Letter from Senate Democrats to Department of Labor February 2016

Legislative Letters Letter of support from Senate Democrats, encouraging Secretary Lew to work swiftly in implementing the Department of Labor proposed overtime rule on February 29th, 2016.
Published on May 24, 2016

May 2016, Cash Coalition Letter to the Senate Finance Committee

Legislative Letters Cash Coalition letter to Senate Finance Committee on cash basis method of accounting 5-10-2016
Published on May 11, 2016

April 2016, Letter to Senate Finance Committee from the AICPA

Legislative Letters AICPA letter for the record to the Senate Finance Committee on hearing entitled “Navigating Business Tax Reform.” The letter encourages the committee not restrict the use of the cash basis method of accounting for pass-through entities.
Published on May 10, 2016

PPWO Letter of Support S. 2707 4.18.16

Legislative Letters Coalition letter sent in support of Senate bill S. 2707 blocking the proposed Department of Labor Overtime Rule.
Published on April 27, 2016

PPWO Letter of Support H.R. 4773 4-18-16

Legislative Letters Coalition letter sent in support of the House Bill H.R. 4773 blocking the proposed Department of Labor Overtime Rule.
Published on April 27, 2016

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