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SINGLE AUDITS What is a "Single Audit"? State and local governments frequently receive substantial federal awards. Often, these awards are provided by several different grantor agen- cies. In the past, state and local governments were subject to the separate audit requirements of each individual grantor. As a result, a state or local government sometimes found itself forced to undergo several audits related to the federal awards it had received for a single period. Such multiple audits often resulted in a wasteful du- plication of effort, with different audit teams ex- amining and reexamining the same internal controls. Moreover, such audits were subject to a bewildering array of conflicting audit guidance provided by different grantor agencies. The fed- eral response to remedy this situation was the Single Audit Act of 1984, which was amended in 1996. Under the Single Audit Act, the multiple grant audits of the past were replaced by a single audit specifically designed to meet the needs of all fed- eral grantor agencies. Individual grantors still retain the right to have additional audit work performed; however, any additional audit work must be paid for by the grantor and must build upon the Single Audit. 24 AN ELECTED OFFICIAL'S GUIDE When are Single Audits required? The Single Audit Act of 1984, as amended, ap- plies to all governments that expend $300,000 or• more per fiscal year in federal awards.2 For this purpose, expenditures include transactions asso- ciated with grants, cost reimbursement con- tracts, cooperative agreements, and direct appropriations. Expenditures also include: • Amounts disbursed to subrecipients (pass-through grants) • The use of loan proceeds under loan and loan-guarantee programst • The receipt of property • The receipt of surplus property The receipt or use of program income • The distribution or consumption of food com- modities • The disbursement of amounts entitling an en- tity to an interest subsidy • Insurance (during the award period). Normally a Single Audit encompasses the entire government. However, governments subject to Single Audit have the option of obtaining a series of audits for just those organizational units (e.g., departments or agencies) that expended or ad- ministered federal awards during the fiscal period under audit. Moreover, in certain circumstances, governments with only one federal program have ZThe OMB periodically reviews this amount for reasonableness. It is expected that this amount will soon be raised to $500,000. TO AUDITING 25