Single audit providers step up amid massive COVID-19 funding surge
News
AICPA logo
Cart
searchSearch
search
burger
AICPA logo
  • Home
colorful abstract lines
News

Single audit providers step up amid massive COVID-19 funding surge

3 months ago · 2 min read

The numerous federal government relief programs created in response to the COVID-19 pandemic have created a huge increase in the volume of work needed from CPA practitioners who perform single audits. These engagements provide assurance to the government and the public that these funds were spent in compliance with federal program rules.

The trillions of dollars associated with federal COVID-19 relief funding put a lot more taxpayer funds into the economy. CPAs who perform single audits follow specialized guidance designed to give stakeholders comfort about whether recipients comply with federal program rules.

Also known as Office of Management and Budget (OMB) Uniform Guidance audits, single audits are rules-intensive engagements performed by CPA professionals with highly specialized knowledge. These audits are conducted in accordance with the Single Audit Act, related implementing regulation, and other guidance issued by the OMB each year in its Compliance Supplement; in 2021, the volume of new federal programs and aid to existing programs was so significant that the OMB needed to issue two addenda to the Compliance Supplement to present the complete guidance for the year.

Organizations that spend more than $750,000 of federal funds in a year are required to undergo a single audit (Paycheck Protection Program funds were not subject to single audit rules), and in a typical year that means between 34,000 and 38,000 single audits are required.

Some federal agencies and other organizations have estimated that COVID-19 funding could result in 10,000 or 20,000 additional single audits required in a given year; but no one knows for sure exactly how many more of these engagements will be performed. Many recipients of COVID-19 relief funding have never had a single audit, and the added volume is placing a big burden on the CPAs who perform these engagements. Single audits are extremely specialized services that require particularly detailed training; if they’re performed by even a highly qualified auditor who doesn’t have this specific expertise, there is a danger that audit deficiencies may occur.

These concerns are being addressed by the AICPA Governmental Audit Quality Center (GAQC), which plays a pivotal role in helping CPAs perform single audits of the highest quality. CPAs who work on these engagements are strongly encouraged to join the GAQC, which provides resources, advocacy, and updates on developments related to these audits.

The $350 billion Coronavirus State and Local Fiscal Recovery Fund (CSLFRF) program was provided to thousands of small units of local government, many of whom may lack the resources to prepare for and undergo a full single audit. Further, finding and engaging a qualified auditor to perform such an audit could be challenging for some. In response to these concerns, the GAQC worked with the Department of the Treasury, the OMB, and the National Association of State Auditors, Comptrollers and Treasurers to create a more simplistic alternative compliance examination engagement that will be less burdensome for eligible CSLFRF recipients but still uphold Treasury’s responsibility to be good stewards of federal funds. Further, practitioners performing the alternative compliance examination engagement will not need the same level of specialized expertise as would be needed to perform a single audit. Ultimately, this solution is expected to make the audit process less challenging for everyone involved.

Typically, single audits are only required for governmental entities and not-for-profit recipients of federal funds. However, certain of the new pandemic programs extended audit requirements to for-profit recipients, who, like CSLFRF recipients, may be new to single audits. The GAQC has worked collaboratively with several agencies on the nuances of these for-profit audits. For example, working with the Department of Health and Human Services, the GAQC developed guidance for audits of for-profit recipients of the Provider Relief Fund (PRF) program.

For more information on single audits, visit the GAQC site.

What did you think of this?

Every bit of feedback you provide will help us improve your experience

What did you think of this?

Every bit of feedback you provide will help us improve your experience

Related content