Study of Progress Made in Implementing the Single Audit Concept

AFMD-84-21: Published: Mar 14, 1984. Publicly Released: Mar 16, 1984.

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A report was presented on a recent GAO study in 10 States of the implementation of Office of Management and Budget (OMB) Circular A-102, Attachment P, which was issued in an effort to implement the single audit concept in the auditing of grants to states and local governments.

GAO found that neither the circular nor related policies have clearly defined the single audit concept. OMB has assigned various cognizant agencies to oversee the implementation of the circular at the state and local levels. For a limited number of state and local governments, OMB assigned a lead cognizant agency to coordinate the single audit on behalf of other cognizant agencies. With the lack of a clear definition and common agreement on the scope of the audit and a diffusion of responsibility in the current cognizant agency system, the transition to the single audit has been slow and difficult. Relatively few audits that were completed, in process, or planned pertained to local governments; since most federal grant funds are spent by local governments in the 10 States studied, the funds were not audited in accordance with the OMB requirements. GAO found a wide diversity in the sampling methods auditors used for selecting federal grants at the local level. The study found that the cognizant agency system in most states did not: (1) designate a lead or single federal agency to be responsible for coordination of the single audit within a state; (2) facilitate the development of a plan for implementing the single audit at federal, state, and local levels of government; (3) provide uniformity within a state on the technical aspects of the audit; or (4) help develop a plan to monitor the audits performed.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: When we determine what steps the Congress has taken, we will provide updated information.

    Matter: Congress should enact legislation to clearly define what is to be achieved by the audit and, in particular, emphasize the study and evaluation of internal control systems over federal assistance, the extent and purpose of transaction testing, and the concept of building on the financial statement audit in any additional audits and evaluations of federal programs.

  2. Status: Closed - Implemented

    Comments: When we determine what steps the Congress has taken, we will provide updated information.

    Matter: Congress should enact legislation to reduce the burden on local governments by exempting from single audit requirements those receiving relatively small amounts of federal assistance.

  3. Status: Closed - Implemented

    Comments: When we determine what steps the Congress has taken, we will provide updated information.

    Matter: Congress should enact legislation to consolidate existing multiple federal financial audit requirements for state and local governments through legislatively mandated uniform financial audit requirements for all federal financial assistance programs.

 

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