The Single Audit Act, as amended,  established the concept of the single audit to replace multiple grant audits  with one audit of the recipient as a whole. The objectives of the Single Audit Act, as amended, are to    promote sound financial management, including effective internal  controls, with respect to federal awards administered by nonfederal  entities;    establish uniform requirements for audits of federal awards  administered by nonfederal entities;    promote the efficient and effective use of audit resources;    reduce burdens on state and local governments, Indian tribes, and    ensure that federal departments and agencies, to the maximum extent  practicable, rely upon and use audit work done pursuant to the act. Agency Uses of Single Audits

At 22 of the agencies, officials in at least one of the CFO, IG, and/or  program offices responded that they use single audits as a tool to monitor  compliance with administrative and program requirements addressed in  the OMB Circular A-133 Compliance Supplement and to monitor the  adequacy of internal controls. Those agencies that do not use the database reported that they rely on the  FAC to send them the single audit reports and that they review the hard  copy reports to obtain information on the agency’s programs instead of the  database. Briefing Section III—How Agencies Use Single Audits Agency Uses of Single Audits Review of the surveys indicated that one or more offices at 22 agencies use  single audits as a tool to monitor compliance with administrative and  program requirements and to monitor the adequacy of recipients’  compliance with internal controls. For  example, 11 agencies indicated that they use the database to identify  recipients that have incurred questioned costs, have made improper  payments, or both.
Why GAO Did This Study

The federal government awards $300 billion to state and local governments and nonprofit groups each year. The Single Audit Act promotes sound financial management, including effective internal controls, over these federal awards. Before the act, government relied on audits of individual grants to determine if the money was spent properly. The act replaced these grant audits with a single audit--one audit of an entity as a whole. GAO surveyed the 24 federal agencies subject to the Chief Financial Officers (CFO) Act and found that they have developed processes and assigned responsibilities to meet the requirements of the Single Audit Act.

What GAO Found

Agencies reported that they are using single audits to monitor compliance with administrative and programs requirements and to determine the adequacy of recipients' internal controls. One or more offices at 22 of the 24 agencies used single audits to monitor compliance with administrative and program requirements in the Circular A-133 Compliance Statement and to monitor recipients' compliance with internal controls. Eleven agencies reported that they routinely use the Federal Audit Clearinghouse database to identify recipients that incurred questionable costs or programs that have significant findings, to identify recipients with recurring findings, or to study subrecipient findings. Individuals at four agencies were unaware of the database or how to use it. Agencies that do not use the database rely on the Federal Audit Clearinghouse to send them the single audit report, which they review for information on their programs.