single audit

Grant Funding and the Benefit of Single Audits

by Jeremy Myers, CPA

Audit Senior Manager at Atchley & Associates, LLP


Austin has a growing population of non-profit organizations who receive grant funds, which can be federal or state sourced and can come in many different sources: Grants, Loans, usages of land, and food / other commodities.  While the receipt of these funds helps organizations meet the needs of the community and reach their missions/goals, there are a number of other requirements that organizations may face.

Grant Monitoring and Reporting

Once an organization receives grant funds, they are typically subject to monitoring from the grantor.  Most grant contracts include either optional or required monitoring.  This monitoring can be performed by the granting agency or by a third party that the granting agency hires to perform monitoring.  This would be in addition to any reports required by the grantors to fill out.  Grant Reporting can range from monthly reimbursement requests, quarterly or annual performance reporting, or cost reports.

Necessary Non-Grant Funding

Many of the non-profit organizations in Austin have to review the requirements of the grant funds they receive and their own ability to meet those requirements.  These requirements may have limitations on both on a time and financial basis.  While organizations will want to receive grant funding, they have to look at the time required to fill out any reporting, keeping records of how the funds were spent, detailed records of those helped, and any necessary hiring and training of the staff to fulfill the grant’s purpose.  Also many grants do not cover some of these necessary items and the organization may not have the resources on its own to cover the costs of running programs in which the grant does not specifically allow.  Non-profits typically have to depend on public support to fill in the gaps the grants do not cover.

Requirements for Uniform Guidance Audit

If an organization who receives federal or state grant funding and expends $750,000 or more, in one year, of federal or state funding (looking at just federal or just state funds, not combined) is required to have an audit under Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements of Federal Awards, also known as Uniform Guidance.  For example, if an organization receives a $1,000,000 grant from the Department of Health and Human Services and spends $600,000 in year 1 and $400,000 in year 2 – this organization would not be required to have an audit under Uniform Guidance.  But if that same organization spends $800,000 in year 1 and $200,000 in year 2, they would meet the requirements to have an audit performed under Uniform Guidance.  The main trigger is spending the funds, not receiving the funds, which under the accrual method of accounting means that you will need to account for those expense incurred but not reimbursed during the organization’s fiscal year.  If you are unsure if the funds you have received are subject to Uniform Guidance, you should inquire to the granting agency and look for Catalog Of Federal Domestic Assistance (CFDA) numbers associated with the grant you have received.  Each grant should be tracked by their CFDA numbers as that number will be how the grant funds are presented on the Schedule of Expenditures of Federal or State Awards (SEFA or SESA).

Benefits of a Single Audit

If an organization is subject to a Uniform Guidance audit, then it would be required to go under a full financial and Uniform Guidance audit, also known as a Single Audit.  The term “Single Audit” is used to refer to the idea that an organization would only have to go through one audit versus multiple monitoring by different grantors and could meet any requirements from outside lenders.  The benefits of having a Single Audit performed are:

  • Your organization will have met the requirements of receiving federal or state funding
  • Having an objective view of your organization’s internal controls over both financial and grant programs,
  • Your organization will have audited financial statements that they can use to obtain future funding from both public sources and if necessary from financial institutions.
  • Making sure that your organization is using industry best practices across all aspects of the organization, not just grant or financial reporting
  • Grantors may choose to rely on the results of the Single Audit, the organization may save time from going through additional monitoring.
  • Since one firm can perform a Single Audit, it can be performed in conjunction with your financial audit, there is some dual purpose testing that can be performed that would bring efficiency to the entire Single Audit process.
  • Finally, all Single Audits are uploaded to the Federal Audit Clearinghouse ( and organizations fulfill the requirements of making their financial statements available to the public and to their current and future grantors.


If you have any additional questions about Single Audits or requirements under Uniform Guidance, please feel free to reach out to Jeremy Myers (

The Independent Auditor, Part I

by Frank Stover, CPA/CFF/CGMA, CFE

Audit Manager at Atchley & Associates, LLP

 The Audit

au·dit /ôdət/noun

noun: audit; plural noun: audits

Audit: an official inspection of an individual’s or organization’s accounts, typically by an independent body.

Verb: conduct an official financial examination of (an individual’s or organization’s accounts). “companies must have their accounts audited”

Synonyms, common:  inspectexaminesurvey, go through, scrutinizecheckprobe, investigate, vet, inquire into, assessverifyappraiseevaluatereview, analyzestudy.

Origin: late Middle English: from Latin auditus ‘hearing,’ from audire ‘hear,’ in medieval Latin auditus (compoti ) ‘audit (of an account),’ an audit originally being presented orally.


There are different types of audits: external, single-audit, governmental, compliance, internal, and regulatory to name a few.

Description of more common audits:

1. Third Party Verification – An independent or external audit is carried out by a neutral third party, such as a professional accounting firm which is licensed to perform audits. The financial records of an entity including ledgers, bank statementspayroll, tax information, internal financial reports, official published reports, accounts payable, and accounts receivable, will be examined, among other documents.  Further, minutes of meetings of directors, committees, and commissioners’ court, inquiry of attorneys, public databases and internet searches are some of the other techniques used to gather entity information. Standards under which audits are conducted are established by various professional bodies and governmental agencies, such as: the AICPA, SEC, GASB, FASB, OMB, and State Public Accountancy Boards.

2. A Single Audit is an engagement to perform simultaneously three (3) examinations.  They are (1) an examination of the financial statements, (2) an examination of internal controls over financial reporting and compliance, and (3) an examination of an entity’s compliance with requirements that could have a direct and material effect on each major program (in accordance with OMB Circular A-133).  The Single Audit is conducted under standards and guidelines issued by the Office of Management and Budget (OMB) generally using Circular A-133, the Governmental Accounting Standards Board, the Financial Accounting Standards Board, and depending on the source of funds perhaps the State of Texas Single Audit Circular.

A Federal or State Single Audit is required if you expended (not received) $750,000 of grant funds.  A distinction should be made that not all Federal or State funds may be grants, should you have a contract for service these monies are not subject to the Single Audit requirement.  If you are unsure, contact your designated grant(s) administrator(s).

The threshold of expenditures requirement is $750,000 for fiscal years beginning on or after January 1, 2015, for fiscal years beginning before that date the threshold requirement for expenditures is $500,000.

3. A compliance audit is a comprehensive review of an organization’s adherence to regulatory guidelines. Independent accounting, security or IT consultants evaluate the strength and thoroughness of compliance preparations. Auditors review security polices, user access controls and risk management procedures over the course of a compliance audit.

What, precisely, is examined in a compliance audit will vary depending upon whether an organization is a governmental, public or private entity, what kind of data it handles and if it transmits or stores sensitive financial data. For instance, SOX requirements mean that any electronic communication must be backed up and secured with reasonable disaster recovery infrastructure.  Entities, such as healthcare providers that store or transmit e-health records, like personal health information, are subject to HIPAA requirements. Financial services companies that transmit credit card data are subject to PCI DSS requirements. In each case, the organization must be able to demonstrate compliance by producing an audit trail, often generated by data from event log management software.

4. Internal Audit as defined by the Institute of Internal Auditors (IIA), “Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

Internal Auditors’ roles include monitoring, assessing, and analyzing organizational risk and controls; and reviewing and confirming information and compliance with policies, procedures, and laws. Working in partnership with management, internal auditors provide the board, the audit committee, and executive management assurance that risks are mitigated and that the organization’s corporate governance is strong and effective. And, when there is room for improvement, internal auditors make recommendations for enhancing processes, policies, and procedures.”

Part II. All the Do’s and Don’ts for Auditors [coming soon]