Did you know September 23rd is National Singles Day? You are not alone, neither did we. However, we want to shed light on another 'Single' that could impact your business, and you may not even be aware of it – The Single Audit.
The Single Audit
A Single Audit is an additional compliance audit required anytime a non-federal entity spends more than $750,000 of federal funds in a fiscal year. This added level of the audit includes stringent reporting requirements your organization will need to follow. If your business received support from the federal government through the ARPA or CARES Acts, the Single Audit might apply to you. While this requirement excluded PPP funds, other government funding disbursed over the past two years, such as the Economic Injury Disaster Loan and Provider Relief Funds, were not. Therefore, if you received this money, your for-profit organization may be subject to this Single Audit requirement. Preliminary estimates show thousands of organizations will require a Single Audit for the first time due to COVID-related funding.
There is a significant difference in the amount and type of testing involved in a financial audit compared to the Single Audit. The objective of a Single Audit is to determine if an entity has complied with the direct and material compliance requirements for each of its major federal programs. It provides users with financial statements assurance related to the entity’s compliance and internal controls over compliance. As such, these must be tested in detail and reported. Federal funding agencies use Single Audits as a report card of sorts. These agencies review the single audit reports to address any problems or concerns and make broad scope changes and improvements to the federal programs.
Here to Help
It is critical to note that to perform a Single Audit, a CPA must meet additional continuing professional education requirements and independence considerations. For over 30 years, Berman Hopkins has had a team of auditors specializing in government auditing and single audits. If you think you may be subject to these Single Audit requirements or require additional clarification, we are here to help. Contact us to let us know how we can best support you.