Single Audit Relief Granted to Certain Governments with Treasury COVID-19 Funding
The AICPA Governmental Audit Quality Center (GAQC) recently issued GAQC Alert No. 439, stating that relief from single audit requirements has been granted for some small governments that have not previously been required to undergo a single audit but would have needed one due to receiving U.S. Treasury Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program funding.
The alert stated that a collaborative effort was undertaken between the Treasury, the Office of Management and Budget (OMB), the GAQC and the National Association of State Auditors, Comptrollers, and Treasurers to develop an alternative to a full single audit or program-specific audit under the Uniform Guidance for certain recipients that would be less burdensome but still uphold Treasury's responsibility to be good stewards of federal funds.
The alternative engagement that was developed is a compliance examination engagement to be performed in accordance with the AICPA Statements on Standards for Attestation Engagements (i.e., AT-C section 315, Compliance Attestation) and Government Auditing Standards. The engagement focuses on two narrowly scoped compliance requirements related to Activities Allowed and Unallowed and Allowable Cost/Cost Principles.
CSLFRF recipients that expend $750,000 or more during the recipient’s fiscal year in federal awards and who meet both criteria listed below have the option to follow the alternative CSLFRF compliance examination engagement:
- The recipient’s total CSLFRF award received directly from the Treasury or received (through states) as a non-entitlement unit of local government is at or below $10 million; and
- Other federal award funds the recipient expended (not including their CSLFRF award funds) are less than $750,000 during the recipient’s fiscal year.
In the alert, the GAQC stated that it is currently beginning the development of additional guidance in the form of a GAQC Practice Aid for practitioners performing these engagements. The Practice Aid will assist practitioners in understanding the AICPA attestation standards and what they require, as well as highlight important performance considerations and illustrative reporting.