With the various federal programs launched last year especially under the CARES Act and the recent enactment of the Consolidated Appropriations Act, more organizations will inevitably undergo a single audit. If you’re concerned about whether or not your organization will trigger a single audit, ask yourself these 4 questions before demanding your auditors to prepare for it.
Before we begin, let’s review what is a single audit? A single audit is an organization-wide audit performed by a non-federal entity that received federal awards. This is to ensure that your organization used the funds in compliance with the terms of the federal programs by looking at your financial statements, expenditures, and internal controls.
Since more entities will likely undergo single audits this 2021, it will be a busy year for in-house and outsourced auditors. If your organization doesn’t have one yet, before panicking, ask these questions first:
- Has your organization received any funding in 2020?
With COVID 19 many non-profit entities and businesses received financial assistance from the government in the forms of grants, loans, contracts, or other non-cash assistance, etc. There are considerations to take when answering this question but pinpointing if you received any relevant assistance is the first step.
- Where did the funding come from?
The second question you should ask yourself after listing down the financial help you got is to determine the source of the funding. Is it through a federal or state agency? Take note if you got funding from a pass-through entity that initially received them from the federal government.
Here is a list of programs under the CARES act that are subject to Single Audit:
- Economic Injury Disaster Loans (EIDL)
- HHS Provider Relief Fund
- Coronavirus Relief Fund (CFDA #21.019)
- Education Stabilization Fund (CFDA #84.425)
- Federal Emergency Management Agency (FEMA)
- National Endowment for the Humanities (NEH)
- Are there expenditures related to federal and/or state financial awards in 2020?
Expenditures happen when the underlying activity occurs: Expense transactions concerning grants or contracts; there is disbursement of funds passed through to sub-recipients; loan
proceeds are utilized. Note that there are nuances in the fund disbursements and spending of the financial assistance you received. We highly recommend discussing with an audit expert.
Book a FREE no-commitment consultation with us at https://calendly.com/levine-and-associates OR directly email us at info@levineandassoc.com to request a quote.
- Does the total amount of the federal assistance you spent in that year, exceed $750,000 or the state’s applicable threshold?
If the answer is YES you will likely be required to do a single audit.
After going over these questions the next thing to do is to talk with your auditor or if you don’t have one reliable, consider a FREE no-commitment consultation with a Levine and Associates’ audit expert. Book the free consultation at https://calendly.com/levine-and-associates OR directly email us at info@levineandassoc.com to request a quote.