By: Wes Omohundro, CPA, MBA, Manager
Non-federal entities (including nonprofit organizations) that expend $500,000 or more per year in federal awards are required to perform a Single Audit. This is a detailed financial examination of an entity typically performed on an annual basis. Single Audits are a means of providing assurance to the federal government of the proper management and application of federal funds by recipients. In addition to nonprofit organizations, recipients of federal awards include states, cities, and colleges/universities. Single Audits provide assurance that recipients comply with applicable federal and state laws and regulations. Single Audits require specific financial statements and a financial audit with respect to those operations funded by federal awards, as well as non-federal award operations. Once completed, the Single Audit must be filed with the Federal Audit Clearinghouse by the earlier of 1) 30 days after the audit report is submitted to the recipient, or 2) 9 months after the final day of the period under audit. The data collection form package is required to be electronically submitted using Federal Audit Clearinghouse’s Internet Data Entry System.
The data collection package details summarized key data elements from the single audit such as type of audit report, significant deficiencies, material weaknesses, material non-compliances, CFDA number for each program (a number assigned to federal assistance programs), amount of expenditures for each program, audit findings, questioned costs, etc. Prior to the report submission, both the auditor and auditee must certify the package using their unique signature codes received via e-mail. The purpose of the form is that it serves as the basis for developing a government-wide database on covered federal awards managed by non-federal entities. Federal agencies use the compiled data to support customized reporting, perform additional analysis, and support policy decisions.
As noted on its website, the Federal Audit Clearinghouse’s primary purposes are:
- To disseminate audit information to Federal agencies and the public.
- To support OMB oversight and assessment of Federal award audit requirements.
- To assist Federal cognizant and oversight agencies in obtaining OMB Circular A-133 data and reporting packages.
- To help auditors and auditees minimize the reporting burden of complying with Circular A-133 audit requirements.
Submitting the data collection form timely is a very important step as it directly affects the risk status of the auditee. The risk status of an auditee is important because OMB Circular A-133 has certain requirements the recipient must meet to be considered a low-risk recipient. One of those criteria is to submit the prior two years’ data collection forms by the due date. The status of a high-risk or low-risk auditee typically determines the amount of auditing that must be performed. Thus, losing the low-risk status may result in additional coverage during the single audit testing, leading to additional audit fees and time for the recipient.
Additional information regarding the data collection form may be obtained here: http://harvester.census.gov/fac.